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What Is Absolute Return In ULIP Plan?

Updated On Sep 12, 2021

Absolute returns are the returns that assets have a tendency to attain over a specific time period. This is stated as a percentage of asset appreciation or depreciation. Stocks or mutual funds could be used as these assets. Absolute return, often known as total return, is the profit or loss made by a portfolio over a specified time period. It is independent of any benchmark, may be positive or negative, and bears no relationship to the market's position or actions.

The current and starting NAVs (Net Asset Values) of the ULIP determine absolute returns. These are expressed as a percentage of the NAVs when they were first established. This is one of the most efficient techniques to determine how well a ULIP performs when held for a shorter period of time. For example, if your original NAV was Rs. 100 and it climbed to Rs. 150, the ULIP's absolute return is 50%.

Absolute Return In Unit-Linked Insurance Plans (ULIPs)

Things to learn about the absolute return in the ULIP plan are given below:

  • Calculate Absolute Returns In ULIP

In a ULIP plan, positive absolute returns show profits from the time you bought the plan to the time you measure your returns. A negative absolute return in a ULIP, on the other hand, emphasizes your loss. You'll need to know the plan's current Net Asset Value (NAV) as well as its starting NAV to calculate ULIP returns.

Subtract the initial NAV from the current NAV to get the current NAV. Multiply this number by 100 and divide by the starting NAV. Your ULIP plan's absolute return will be the result.

Must Read: Which Is Better ULIP Or Term Insurance?    

  • ULIP Plan Charges

Surrender costs, fund management fees, mortality charges, policy administration charges, and other expenses may be charged by the insurance provider when you purchase a ULIP plan. These fees can reduce the amount of money you get back from your ULIP investment. The profit you get from your ULIP investment should be greater than the investment's costs. You'll lose the money if you don't.

  • Market Performance

ULIPs are products that are tied to the stock market. As a result, the funds you choose can have an impact on your results. To enjoy stable yet high returns, it may be prudent to maintain a well-balanced combination of equities and debt funds. Switching between funds to take advantage of market opportunities might also improve your profits. It also helps to check the fund's prior performance before investing in it.

  • Make Sensible Investments

You can choose from a variety of fund options with ULIP plans. You must invest in both equities and debt funds in order to make big returns. A well-thought-out asset allocation strategy can assist you in achieving higher returns. Consider investing more in equities funds if you are young and have a high-risk appetite, as they can provide larger returns at a higher risk.


ULIP insurance products might assist you in achieving a variety of objectives. They can provide good long-term profits and fit into any budget. These designs are adaptable and suitable for the majority of people. Furthermore, they provide tax* advantages that might help you save money. They also safeguard your loved ones when you are away. So don't be hesitant to invest in these plans.

Also Read: Is ULIP and SIP The Same?

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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