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Is ULIP Better Than PPF?

Updated On Aug 21, 2021

Are you looking forward to making a worthwhile investment? Have you been confused between ULIP and PPF? If so, know that both the investment options are beneficial in their own way. However, to make the better choice out of the two, it is important to understand the differences between the both in the first place. 

What is ULIP?

A ULIP or Unit Linked Insurance Policy is a scheme that offers investment as well as life insurance. When a policyholder invests in a ULIP, a part of its premium is used to provide life cover. The remaining amount is invested in money making funds such as equity, debt or hybrid as chosen by the policyholder. The lock-in period for ULIPs is limited to 5 years. Moreover, what’s best is that ULIPs also offer tax savings benefits. 

What is a Public Provident Fund?

Launched in 1968, PPF is a savings scheme introduced by the government of India. PPF is considered one of the most preferred and stable saving instruments. PPF can be opened at all public and private sector banks. PPF can be opened online and linked directly to your salary account. The investment tenure is 15 years. However, it can be extended for 5 more years. The minimum one can invest is Rs. 500 or more. Only up to Rs. 1.5 Lakh can be invested. 

Also read - Difference Between Ulip And Mutual Funds 

Differences Between ULIP and PPF

Below mentioned are the differences between ULIP and PPF:





Investment + Insurance


Lock-in Period

5 years

15 years 


Partial; after 5 years

Partial; after 7th year


Market linked; depend on investment fund & style

Fixed returns; decided by the government

Tax Benefits 

As per Sec 80C 

As per Sec 80C 

ULIP or PPF - Which is Better?

Now that you are aware of the differences between ULIP and PPF, make sure you choose the best possible investment option for yourself. As far as the better one between the two is concerned, know that it is something that totally would depend on your basic requirements and expectations. 

If you are interested in securing yourself with investment as well as insurance, go for ULIP without giving it a second thought. If you want just the investment, go for PPF. Similarly, if you are willing to take a risk and gain returns based on the market conditions, choose ULIP. However, if you want fixed returns and do not want to end up being dependent on market conditions, choose PPF right away! In both the cases, you will get to reap tax benefits under Section 80C of the Income Tax Act, 1961. 

At Last 

No matter which one you choose between ULIP and PPF, make sure you read the policy documents carefully to make an informed selection. If still in confusion, feel free to get in touch with one of our InsuranceDekho experts and get all your doubts clarified right away!

You may also like to read - Which is better ULIP or term insurance?

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.


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