How Much Wealth Can You Create from ULIP in 10 years?

Buy a life insurance plan in a few clicks

Now you can buy life insurance plans completely online right here.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.

  • Kotak E-Invest Plan

    Kotak e-Invest is a comprehensive Unit Linked Life Insurance Plan that can be customized as per your goals and needs - be it protection; investment; financial security for child or retirement planning.

  • Icon for Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and insurance cover against any eventuality.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.


How Much Wealth Can You Create from ULIP in 10 years?

  • 7th Feb 2022
  • 678

How Much Wealth Can You Create from ULIP in 10 years?


ULIPs have provided an average return of 10%-12% p.a. in the past. Going by the past records, you can expect a moderately high return from these investments. Keep reading to know more.


The benefits of a ULIP are not restricted to high returns. In addition to this, you can enjoy a life cover, tax exemptions and many more. Here are the major benefits of a ULIP.

Benefits of Investing in ULIPs

1.Dual Advantage

Investing in ULIPs gives you the dual advantage of a life cover and investment returns.

a) Life Cover:

Usually, the life cover provided is 10 times the annual premium. This amount is payable to the nominee in case of the policyholder’s demise during the policy term.

b)High Returns:

The major portion of the premium is invested, primarily in equity markets. This helps in generating higher returns. Historically, ULIPs have grown at 10%-12% p.a. on an average.

2.Tax Benefits:

a) Premium:

The amount paid by you as a premium is exempt from tax up to Rs. 1.50 lakhs per year.

b)Maturity Value:

  • The maturity value of ULIPs purchased before 1st February 2021, is exempt from tax under Section 10(10D) of the of the Income Tax Act, 1961.
  • The maturity value of ULIPs purchased after 1st February 2021, attracts 10% LTCG tax if the gains are above Rs. 1 lakh.

3. Flexibility to Switch Funds

Since the returns of a ULIP are linked to the market, most ULIPs provide free fund switch options. As a result, you can change your exposure according to the market movements and your requirements.

4. Long-Term Investments

A lock-in period of 5 years is applicable on ULIP investments. Hence, by default, ULIPs are for the long term. In fact, experts advise that an investment period of 10-20 years is ideal for ULIPs.

What are the Charges for ULIP Investment?

Generally, you will find 6 types of charges associated with ULIPs.

1.Premium Allocation Charges

The initial expenses incurred by the insurance company for underwriting, documentation, policy issuing, etc. This amount is charged upfront from the first premium. On average, the charges are approx. 1.5%-4% of the premium.

2.Mortality charges

In order to provide the life cover, ULIPs deduct a mortality charge from the premiums paid by you. Usually, this charge is calculated on every Rs. 1,000 of the life covers. This depends on your age, health risk and the mortality table.

3. Fund Management Charges

As per the IRDAI, ULIPs cannot charge more than 1.50% of the fund value towards the fund management charges. This includes the salary of experts and other professionals who manage your investment.

4.Policy Administration Charges

A monthly charge is levied on your account for administration purposes, like record-keeping, paperwork etc. For this purpose, the proportionate units are sold. The amount can either be fixed or variable as per the insurer’s policy.

5.Surrender Charges

A surrender charge is levied, if you surrender your policy within the lock-in period of 5 years.

Switch Charges

The insurer provides some free fund switches within a specified time fram. If your switches exceed this, you may be charged a pre-defined amount.

Example: Wealth creation from ULIP in 10 Years

Assuming the expected rate of return to be 10% (after charging all the expenses) and you pay a premium of Rs. 60,000 annually, your final corpus can look like this,


Opening Investment

Invested Premium


Closing Investment


₹ -

₹ 60,000.00

₹ 6,000.00

₹ 66,000.00


₹ 66,000.00

₹ 60,000.00

₹ 12,600.00

₹ 138,600.00


₹ 138,600.00

₹ 60,000.00

₹ 19,860.00

₹ 218,460.00


₹ 218,460.00

₹ 60,000.00

₹ 27,846.00

₹ 306,306.00


₹ 306,306.00

₹ 60,000.00

₹ 36,630.60

₹ 402,936.60


₹ 402,936.60

₹ 60,000.00

₹ 46,293.66

₹ 509,230.26


₹ 509,230.26

₹ 60,000.00

₹ 56,923.03

₹ 626,153.29


₹ 626,153.29

₹ 60,000.00

₹ 68,615.33

₹ 754,768.61


₹ 754,768.61

₹ 60,000.00

₹ 81,476.86

₹ 896,245.48


₹ 896,245.48

₹ 60,000.00

₹ 95,624.55

₹ 1,051,870.02

The frequency of compounding is a determining factor to calculate the returns. If you pay a monthly premium of Rs. 5,000 instead, your final corpus will be ₹ 1,204,255/-.

- A Consumer Education Initiative series by Kotak Life

Also read

  • Important Questions You Must Ask Yourself When Buying a ULIP Plan

    Before buying a ULIP policy, there are a couple of questions you need to ask yourself such as what is ULIP, how does it work, when can the investment ...

    Read more
  • What are Some of the Safest Investment Options in India?

    Like any investment schemes, even ULIPs have myths associated with them. Here are 4 ULIP myths you should know for better investment opportunity.

    Read more
  • Why Do You Need A ULIP Plan?

    As a whole, ULIP benefits make it a fantastic long-term investment option for you and your loved ones by providing dual benefit of life insurance cove...

    Read more

Related Plans

  • Kotak Group Shield

    Kotak Group Shield

    Kotak Group Shield Plan covers your customers' loans and savings and protects the well-being of your customers and their family members in the event o...

    Know more
  • Kotak Platinum

    Kotak Platinum

    Kotak Platinum is an investment plan with an unmatched combination of three investment strategies and flexibilities for complete control over your inv...

    Know more
  • Kotak Assured Return Employee Benefit Plan

    Kotak Assured Return Employee Benefit Plan

    Kotak Assured Return Employee Benefit Plan is an insurance plan designed for Employers /Trusts, Employer – Employee groups who wants experts to mana...

    Know more
  • Kotak Fortune Maximiser

    Kotak Fortune Maximiser

    Kotak Fortune Maximiser is a limited pay participating endowment plan, which can be customized as per your requirement to help you achieve your life g...

    Know more