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In this policy, the investment risk in the investment portfolio is borne by the policyholder.
Kotak e-Invest
Features
Ref. No. KLI/22-23/E-BB/492
A 15-year ULIP policy allows you to invest in market-linked funds while providing life coverage to secure your family’s future. ULIP returns in 15 years benefit from market growth and the power of compounding, which can significantly enhance your savings. With added features like flexibility, tax benefits, and partial withdrawals, a ULIP is a versatile choice for achieving financial goals.
A 15-year ULIP policy is a unique financial product that combines investment opportunities with life insurance coverage.
Over the course of 15 years, you get to invest in a variety of market-linked funds, such as equity, debt, or balanced funds. The investment portion of your premium is managed by professional fund managers based on market performance. You can use the ULIP returns in 15 years and accumulated corpus to achieve your financial goals. For instance, you can invest in a ULIP retirement plan to live comfortably post-retirement.
On the insurance side, the policy provides life coverage, ensuring that your family is financially secure in case of an unforeseen event. As the policyholder, you can customize the policy’s features, such as the sum assured amount, premium payment frequency, and more.
Now that you understand the dual benefits of ULIP plans, let’s examine how ULIP works.
ULIP returns in 15 years are achieved through the allocation of a portion of your premium to provide life insurance protection while the remaining funds are invested in your selected investment options.
ULIPs typically offer a range of options, including various equity and debt funds. You also have the flexibility to create a customized investment portfolio by diversifying your investments between these fund types, aligning with your individual risk tolerance. The ULIP returns in 15 years are contingent on the performance of the specific fund or funds you have chosen.
The decision to invest in ULIPs for a 15-year horizon can be a strategic one, offering a multitude of benefits that extend well beyond financial security.
A 15-year ULIP allows you to benefit from market growth by investing in equity, debt, or balanced funds. As your money grows based on how well the market performs, you can get higher ULIP returns in 15 years than traditional savings plans.
When you invest in ULIPs, you can switch between funds (like equity to debt) based on market conditions or your goals. You can also adjust your premium allocation to match your risk appetite over time. For instance, if you are willing to take higher risks, you can allocate a greater percentage of your investment to equity for high ULIP returns in 15 years.
As already discussed, ULIPs provide life insurance coverage alongside investment benefits. This ensures that your family is financially protected in case of an unfortunate event while your money continues to grow. Your family members can use the sum assured amount to maintain their standard of living and plan for the future.
ULIPs are great for building wealth over the long term because of the power of compounding. When your ULIP returns in 15 years are reinvested, they generate even more returns, helping your investment grow faster. This compounding effect can significantly boost your savings, especially if you stay invested in high-performing funds.
ULIPs are eligible for tax savings under Section 80C of the Income Tax Act. You can avail a deduction of up to ₹1,50,000 for the ULIP premium paid and reduce your taxable income.
Further, under Section 10(10D), no tax will be paid when you receive ULIP funds during partial withdrawal, surrender, or maturity. This exemption will be available only if the premium does not exceed 10% of the sum assured amount. For ULIPs issued on or after 1 February 2021, an additional condition has been provided: the yearly premium should not exceed ₹2,50,000.
ULIPs allow partial withdrawals after the mandatory 5-year lock-in period, which can be a lifesaver in emergencies. This feature gives you access to your money when you need it most, like for medical expenses or other urgent needs, without completely ending your policy.
The ULIP returns in 15 years are calculated based on the Net Asset Value (NAV) of the funds in which your premiums are invested.
The formula to calculate absolute returns is:
ULIP Returns= [(Current NAV - Initial NAV) / Initial NAV] × 100.
You can also calculate the annual growth rate of your funds or the Compound Annual Growth Rate (CAGR) as follows:
CAGR of a 15-year ULIP = {[(Current NAV/ Initial NAV) ^ (1 / 15)] - 1} x 100
Here, NAV represents the per-unit market value of the fund at any given time.
It is important to note here that ULIP returns in 15 years depend on the type of funds you choose (equity, debt, or balanced) and how well those funds perform in the market. ULIPs also involve certain charges, such as fund management fees and policy administration fees. These are deducted before calculating returns.
ULIP returns also depend on the duration for which the funds are invested. Long-term investment in ULIPs, such as for 15 years, benefits from compounding. This means that your returns are reinvested to generate additional growth.
Investing in ULIPs for 15 years can be a smart financial decision, provided you carefully select the right ULIP, manage your funds wisely, and stay invested for the long term. However, it is essential to understand the nuances of ULIPs, including charges and fund selection, to make informed decisions. Over the years, ULIPs have evolved to become more investor-friendly, and with prudent planning, they can help you achieve your long-term financial goals while providing financial security for your loved ones.
1
The returns from a ULIP over 15 years depend on the type of funds you choose (equity, debt, or balanced) and market performance. For instance, equity-focused ULIPs can provide higher returns than debt funds due to higher risk.
2
ULIP returns are calculated based on the Net Asset Value (NAV) of your invested funds. The formula is:
(Current NAV - Initial NAV) / Initial NAV × 100
3
ULIP returns are not guaranteed, as they depend on market-linked investments. However, some plans offer features like capital protection or minimum assured benefits that provide a safety net.
4
Market performance plays a critical role in determining ULIP returns since they are linked to equity and debt markets. Consistent growth in the market can boost returns. On the other hand, volatility may result in fluctuations.
5
If you surrender a ULIP before 15 years, you may face surrender charges and lose out on the potential for long-term compounding. Additionally, surrendering early may lead to lower returns as market cycles and growth opportunities are cut short.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
In this policy, the investment risk in the investment portfolio is borne by the policyholder.
Kotak e-Invest
Features
Ref. No. KLI/22-23/E-BB/521
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
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