Compare & Buy Car, Bike and Health Insurance Online - InsuranceDekho
Claim, renew, manage & moreLogin

A Detailed Comparison Of ULIP Endowment Plans

The Unit Linked Insurance Plan (ULIP) is a financial product that combines insurance and investment into one package. The cost of a ULIP premium is split into two parts. One component is used to provide life insurance, while the other is invested in bonds, equities, or mutual funds. The sum insured determines the premium for life insurance; the larger the sum insured, the higher the premium. Units in stocks, bonds, and hybrid funds make up the investment fund. Market conditions determine the value of such funds/assets. The original sum insured, or the net asset worth of all units (whichever is greater), or both, is usually the sum insured.A regular life insurance policy, an endowment plan promises a lump sum amount/payout following the policyholder's surviving period or death. An endowment plan, in addition to providing life insurance, can help you save money throughout the term of your investment. The money saved is given to the named beneficiary or nominee when the policy matures. Profit-generating and non-profit-generating endowment plans are the two categories of endowment plans. Life insurance, savings, retirement, pension, education, money-back, and other types of endowment programmes are available.

A Detailed Comparison Of ULIP Endowment Plans

How Do ULIPs and Endowment Plans Differ?

ULIPs and Endowment Plans differ in the following ways:

1. Period of Lock-in

Assureds normally impose a five-year lock-in period on ULIPs because they are insurance products. Before the lock-in period ends, investors will be unable to redeem their holdings. A lock-in time is not required for most endowment plans, with the exception of ELSS funds, which have a three-year lock-in period.

2. Taxation

LTCG (long-term capital gains) and STCG (short-term capital gains) taxes of 10% and 15% (with relevant surcharge and cess) are imposed on equity funds, depending on the holding period. The LTCG tax on debt mutual funds is 20% (plus the applicable surcharge and cess) after indexation, however the STCG tax is set by the investor's tax bracket. ULIP taxation: Under Section 10(10D) of the Income Tax Act of 1961, ULIP returns are tax-free.

3. R.O.I. (Return on Investment)

ULIP returns can be variable because they invest in equities, debt, or a combination of the two. Depending on the sort of scheme adopted, mutual fund returns range from low to high. In mutual funds, there is no assurance of a minimum return.

4. Charges

You will be charged a competent management fee as well as operating charges when you join in Endowment plans, which will be listed as an index fund. As a penalty for withdrawing from a fund, many charge an excessive fee. When it comes to ULIPs, there are price allocation fees, wealth management fees, management fees, death fees, and other expenditures.


It provides both investment and life coverage, an endowment policy, like a unit-linked insurance plan, is one of the most popular life insurance policies in India (ULIP). You get life insurance as well as money saved for your or your child's future when you invest in an endowment policy. The money covered (the sum assured) is handed to the policyholder's family or representative when he or she dies. If the policyholder lives to the end of the term of the policy, he will receive the whole amount of vesting as well as any bonus on the money deposited. It can also be used to deduct taxes under the Income Tax Act's Sections 80C and 10D.

Also read- Are Endowment Plans Preferable Than Fixed Deposits?

LIC Endowment Plan: What You Should Know

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

Popularly Opted Term Insurance Sum Assured

People Also Read

Must BuyMust Buy

Why to Buy Life Insurance Policy Online from InsuranceDekho

  • Tax benefit upto 1,50,000*
  • Claim support everyday 10AM-7PM
  • 80 Lacs+ happy customers