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

How Have ULIPs Evolved?

Published On Jan 18, 2022 10:00 AM By InsuranceDekho

ULIPs give investors more flexibility than typical insurance products. It offers certain new aspects, such as strong returns, shorter tenures, and tax benefits, in addition to the combined benefits of insurance and investment.

ULIPs have evolved over time. Over the years, the Indian investment market has undergone numerous changes. Since its inception a decade ago, ULIPs, like any other investment product, have changed over time.

The current ULIPs on the market are superior and have more advanced features. However, the policy's structure has undergone significant changes. Let's take a closer look at how ULIPs have evolved.

How Have ULIPs Evolved?

Below are a few things you must know regarding the evolution of ULIP:

Before 2010

Due to exorbitant front-load taxes and other charges, ULIP Investment's popularity waned after it was introduced to the market. Furthermore, the plan was widely misrepresented as a three-year investment strategy.

Customers were given incorrect information about the lock-in period and were told that they would have to pay premiums for a maximum of three years. In fact, for good ULIP profits, long-term investment in ULIPs is required.

When investors realized that the majority of the premiums paid were used for additional costs and the net fund value was substantially lower, the popularity of ULIPs declined.

Between 2010 And 2015

After uncovering that ULIPs were already being mis-sold throughout the nation and that investors were being scammed out of crores of rupees, the Insurance Regulatory and Development Authority of India (IRDAI) developed some guidelines. The main purpose of stricter regulations was to increase investment returns.

As a result, some ULIP costs were capped in September 2010, the lock-in period was extended to five years, and the minimum protection cover was increased to ten times the annual premium paid.

From 2015 Onwards

The fees linked with ULIPs experienced significant adjustments in 2015. Providers began capping mortality and fund management fees in order to make the product more appealing to the target market.

ULIPs Today

ULIPs are popular now due to their strong long-term returns, despite a difficult start. In reality, the product is being redesigned to be more cost-effective. Investors are becoming more knowledgeable about ULIPs and are beginning to invest in them in substantial amounts. Along with the tax advantages of ULIPs, the capital accumulated over time through ULIPs can be used for long-term goals such as retirement planning.

ULIP Tax Benefits

Section 80C of the Income Tax Act of 1961 allows you to deduct the amount you invest in a ULIP. It allows for a maximum deduction of INR 1.50 lakh. Furthermore, when the policy matures, the amount you get is tax-free under Section 10 of the Internal Revenue Code (10D).

ULIP Calculator

Because there are so many items on the market, customers frequently make poor decisions when choosing the correct product for them. Using a ULIP calculator, on the other hand, is a great approach to finding the proper ULIP.

A ULIP calculator is a web-based tool that allows you to compute premiums as well as to measure ULIP returns. The returns are calculated using the premium amount as input. You can also compare ULIPs based on their ULIP returns and premiums.


Providing increased value to clients is the first and most important goal of every product progression, regardless of industry. It is a continuous transformation process that enables one to take full advantage of changing circumstances and client demands. Financial products, like any other market commodity, have evolved over time from simple savings instruments to more sophisticated wealth and asset creation vehicles.

Also read: Who Should Purchase A ULIP

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
  • 50 Lacs+ happy customers