How to manage ULIPS ? – Tips to become a smart investor

POSTED BY Jagoinvestor ON February 16, 2009 COMMENTS (130)

I am finally back from vacation, I feel bad for not writing anything for these 11 days .. I have written a post on GOLD Breakout here , People interested in investing in GOLD may be interested. Let me talk about IRR and ULIPS today.

When we see talk about ULIPS, people generally see its returns over some years , where as its not the true indicator for its actual returns , What we need to see is called IRR.
What are ULIPS ? , read here


What is IRR ?

Actually IRR is not only related to ULIPS, its a general concept. IRR is Internal rate of Return, It means returns after adjusting all the costs and expenses. IRR alone is not a single thing we should look at, Its calculated by assuming fixed rate of return like 6 or 10%. The other things to look are its actual performance too.

What are good ULIPS in markets currently ?

Some weeks back there are was a survey and study by outlook money on best Ulips, Birla Sun Life’s ClassicLife Premier and Kotak Life’s, Long Life Wealth Plus were some top funds compared on the basis of IRR. this article talks about the best ULIPS in detail, click on this to read more.

Full article related to ULIPS can be read here

Understand , Choosing a good ULIP is just 5-10% , the main part is how your manage it . how to take care of the advantages provided by ULIP, If you just want to buy a ULIP and sleep for 10 yrs , ULIPS is not for you then . you must buy Mutual funds Instead .

Manging a ULIP is the main part , If you manage a bad ULIP very well , you can earn good returns, but you can loose money by buying Best Ulip in markets and mismanaging it .

How to manage a ULIP ?

Managing a ULIP over a long term is very simple but not easy . You have to do some simple things . Always use switch facility when you anticipate the opportunity .

When you see markets are very high and there is lot of euphoria in market , Decrease your Equity allocation and shift it to Debt . And when you see dull ness in market and everybody is too afraid in markets its the time to shift your money in Equity .

Watch this video to learn how to manage ULIPS:

How to make sure that this is done easily ?

You should find out your Equity : Debt allocation ratio which suits you , which is comfortable for your risk appetite . Once you choose it . Make sure you maintain it once it goes out of sync . So suppose you decide that your Equity:Debt ratio will always be 75:25 . and suppose after an year , you see that it has changed to 65:35 . You should shift some of your Debt part to Equity and bring it back to 75:25 .

You can read how Equity Debt rebalancing helps in long term

This way you will make sure that if Equity has gone up (because if good market performance) , you are shifting some money back to Debt (because now chances to correction is high) and vice versa .

The main advantage of ULIPS is the you can shift between Equity and Debt without any tax liabilities , If you buy Mutual funds and do it , you will pay tax every time you buy and sell it in short time frame (1 yrs) . So until you utilize Switch facility well enough in ULIPS , you are not taking best advantage from your ULIPS .

So as a general rule :

– Increase your Debt allocation once markets are too high and every body is rushing to buy shares in stock markets .
– Increase your Equity allocation after markets are down a lot and there is lot of fear among investors (this is a good time to buy cheap stocks).
– Increase your Debt if you are too confused about what will happen .

Final Note :

If you cant invest for more than 10 yrs and cant look after switch facility and cant monitor markets at broad level , You should stay away from ULIPS, the best thing for you would be to invest in PPF each year and invest in Equity Diversified Mutual funds through SIP every month and review it at least once a year .

Please dont buy ULIPS for just tax savings , dont get out of it in 3-5 yrs . there is 3 yrs locking , but even if you get out in 4th or 5th year , there are heavy penalties you have to pay to get out , which your agent never tells you , Only after 5th year there are free exits .

ULIPS are not bad products , they are only bad if you dont manage it well and buy them for wrong reasons .

130 replies on this article “How to manage ULIPS ? – Tips to become a smart investor”

  1. S Deepika says:

    Hi Manish,

    Your suggestions are very nice.
    Actually i have taken HDFC LIFE YOUNGSTAR SUPER PREMIUM OPPORTUNITY FUND at premium of Rs.60000/- last year.

    I have not renewed it as it is not performing well. please suggest what can i do? Can i surrender the policy. Now it is discontinued state.

    1. If your lock in period is over, then yes, you can give it back

  2. sulocahna says:

    Dear Mr. Manish,

    I was not sure of market ,i had ICICI policy life time super from last 10 years ,which is going to mature in next six months .presently it is maximum/equity. i have few questions
    1.can i surrender the policy or wait till maturity?
    2.whether it should be continued like that or switch to debt funds now?

    1. 1. You can now wait till maturity

      2. As markets are now rising, its better to keep holding I suppose!

      1. SULOCHANA says:


  3. ram says:

    dear sir,
    i had bought a hdfc unit linked endowment 2 on 2009 the premium is 15000 i have paid 5 premiums now the total value is 85000rs can i close it please reply

    1. No , you cant close it before 3 yrs !

  4. George says:


    I think the best investment for the common man is FD.

    I invested in Unit Gain Plus. After surrendering it after 10 years. I compared it with my FD to see the huge loss study the table below.

    Premium Date…………………Amount……………………..Duration……………..Fixed Deposit return @9%

    25/06/2005…………………… 30,000………………………..128 Months………………77,521.61
    19/06/2006……………………..30.000………………………..116 Months………………70,920.13
    26/06/2007……………………..30,000………………………..104 Months………………64,880.81
    28/06/2010…………………….60,000…………………………..68 Months……………….99,354.25
    Total ……………………………1,50,000………………………………………………………………3,12,676.80

    The amount I realized on surrendering it on 21-2-2016 is 2,54,086.25

    58,590.55 loss compared to FD

    Of-course I don’t deny the benefit of life coverage

    My advice never go for ULIP.
    I would like know your expert advice on this.


    1. Yes, FD is better compared to the ULIP you had, but what about Mutual funds ?

      Or do you know what is the real return you get from FD ? I mean after adjusting tax and inflation?

  5. Deepika says:

    Hi Manish,
    My max life fast track super plan( balanced fund) has started 10 days before with premium of 50000. Premium paying term is 5 years and maturity 10 years. I have already started thinking of asking for refund as I am confuse about returns. I want atleast 10% returns after 5 years. please suggest me should I continue or not with this plan.

  6. Siddharth says:

    Dear Manish,

    I have invested in HDFC unit linked endowment plus plan since 2007 yearly premium is 10000, So total invested 90000 and fund value is 110000 till date. 50% fund in balanced managed fund, 25% equity managed fund and 25% growth fund. Now what should I do? till date i never switching between funds. Should i invest further in this plan or stop paying further premiums or switch between funds and wait for market correction. I am much confuse.


    1. Hi ashok kumar

      I think you should make it paid up or surrender the policy.


      1. Dear Sir,
        Thanks for your advice.Can you suggest me which policy of icici prulife is the best option for switching since I want to switch this policy.How much penalty would I face if I surrender this policy now.

        1. In ULIP you can switch between the funds, not inter product

  8. MADHU says:

    Dear Manish,
    Kindly advise me if I should continue the ICICI Pru elite life after the first premium payment. The second is due now. I was sold this policy when I had gone for advice on putting money in the stock market for my son’s future. Does it make more sense to put money in mutual funds directly instead continuing the policy and paying the four premiums due ( 2 lakhs each).
    Thanks in advance,

    1. I suggest stop paying the premium, but redeem the money from this ULIP after the lock in period is over

  9. Peeyush says:

    Hi Manish,

    I have bought HDFC Life Progrowth plus ULIP last year in September 2014. Till now I have invested 100000/- and there is due payment this coming september for 2nd installment. I did not know about fund switch facility and now I am learning it. I have kept 80:20 ratio in Balance and Opportunities fund. Does this sound correct? Previously I kept all my money in Balance fund and there was no growth. Are these options same as Equity and Debt options that you have stated in your post? I do not see this options in my fund switch.


    1. Its not compulsory that you will have all options. Keep more in equity only if you are looking at long term investment

  10. Rama says:

    Dear Manish, Please advise me on ULIP. I have policy in AVIVA. My ULIP policy was Aviva Life Plus which a Balanced Fund. I have paid for 6 years each 15k per year. I have paid a total amount of 90k till now. I have units of 1500 and where the NAV is Rs.53.06. I am not interested to invest this any more. Now I am loss of 10K. Please advise me whether i need to keep this or get out from this 10K loss. I am in dialama whether to continue or not. I am in worry how to recover my total paid amount. Please advise.

    1. If I were you, I would have got out of this and restarted things 🙂

  11. murali says:

    Hi Sir,

    Your articles is eye opening for me.

    I have bought icici pru life Wealth Builder – Maximiser V in Dec 2014 for which I have paid Rs. 50,000 as first perimium and need to be contined for next 4 years.
    Lockin period is for 5 years and the policy is for 10 years
    But fund value is keep on reducing and at present my fund value reduced it to 45,000 from 50K.
    I’m confused whether to contiune on this plan and stay invest it for 5 years or should i cancel this plan now itself ?
    thanks in advance.

    1. Better stop paying any premiums now

  12. Sujatha S says:

    Hi Manish,
    my wealth builder 2 policy has started just yesterday with premium of 120000 Icici prudential. this is 5 year premium payment and maturity 10 years. I have already started thinking of asking for refund as I have been through ulip terms on several sites. Your write up is very informative. please suggest if I can take the plunge or just don’t pay after this at all. Then what will happen?

    1. You can cancel the policy within 15 days of receiving the policy. If it’s already over, then your first premium is already paid. Check the policy document on what it says about stopping the premium payment after first premium.


      1. Sujatha says:

        Thanks for the response

      2. venkatesh says:

        Hello Manish,

        Thank you for your detailed information about investing in ULIPs. As you said, I just invested in HDFC young star super ULIP for the sake of tax savings after started my career way back in May 2010. Now I have completed 5 years of yearly premium and still paying monthly premiums and would like to continue for entire duration of 10 years. As of now, 98.87 % invested in Growth Fund II and 1.13% invested in Balanced managed fund II. This fund allocation is done by agent. I didn’t aware of this fund allocation. Now I am thinking to switch the fund allocation. My yearly premium is 30000 and paying 2500 in monthly payments.I invested 1,55,000 till date and the fund value as of now is 1,89,600. can you suggest me that shall I stay with this growth fund and balanced with this same percentage or I should allocate more % to balance fund? And shall I also allocate my fund to other new funds like Equity managed fund, Opportunities fund, Liquid fund, stable managed fund, secure managed fund etc.?

        Thank you in advance.


        1. Venkat

          I suggest stay with the growth option only as you are going to continue for more than 5 yrs more !

    2. I think you are eligible for free look up period yet. Better give it back

  13. Poornima says:

    Dear Manish,
    Thank you for your posts. There are really very informative and helpful. After following your posts, me and my husband had made investmentes in debts rather than in Equity. Now we have a Term plan anf PPF running and an RD from past 2 years. We have two daughters and wanted to invest in Sukanya samriddi account for them, by then we were told about ICICI maximer fund plan with lesser lock in period (5years). We want the policy term for another 15 years. Bank ppl also told that switching over the funds and management will be taken care by the bank. The charges are 18% spread across 10 years. and 14% returns is what they claim as per current market status. We want minimum risk and good returns for our investement. Please suggest if the plan is fine for us? Thank you so much in advance

    1. I think its a ULIP and not suggested if the costs are so high

  14. Ameet says:

    Hello, Manish,
    I have bought HDFC Wealth Builder (Vantage fund) in Feb 2010 for which I paid Rs. 2,50,000/- each year for 3 years (7,50,000/-)
    lockin period was for 5 years and the policy is for 10 years
    The present value of the policy is 10,50,000/-
    Pls. suggest as to, I should continue with the policy or should I exit……….taking into consideration high monthly policy charges even after 5 yrs (ie around 900/-) and present market
    Highly appreciate your suggestions

    1. I think you can sell it off and come out of it !

      1. Ameet says:

        Thankx Manish,
        Where should I reinvest the money for better returns?
        Investment period between 2 to 5 yrs.
        Motive good returns

        1. Mutual funds are good alternatives . But not 100% secure !

  15. Vijay says:

    Hello Manish,
    I took two HDFC Life Progrowth plus policy(ULIP ) from HDFC on 2014 for 10 years (lock period 5 years). 25000 INR per year.So total in a year 50000 INR. As on date, i have paid 1 lakh (2014&2015).I don’t know about share market as i new in the field.Basically i had taken the above policy for high return as well as tax benefit.
    1)So please advise whether i have to monitor my fund/share to get good return.
    2) Do i have to stop making payment now onwards
    3) Shall i continue until 5 years(lock periods) to withdraw only
    4) Shall i continue for entire 10 years


    1. I think there would be a lock in period . So you cant withdraw before that, but I guess you can stop making payments and let it grow. Read the fine prints !


  16. Ashish says:

    What is your suggestion. Should I stopped it or continue?

    1. Hi Ashish

      What is it regarding ?

  17. Ashish says:


    Till date I have invested 192000 and now current value is 190,736.09 . But in this investment first year primium 36000 is not invested in the market. Then we can say 156000 is invested in market.

  18. Ashish says:

    Hi Manish

    I have taken Kotak Smart Advantage- Kotak Dynamic Floor Fund in Oct-2009.
    I am paying monthly 3000. Now I want your suggestion ,should I continue with this plan or shift it to any other plan like Kotak dynamic growth fund or stop it.


    1. What is the CAGR return till date ?

  19. Chandan says:

    just another question..
    there are following options available
    Liquid Fund II 0 % %
    Stable Managed Fund II 0 % %
    Defensive Managed Fund II 0 % %
    Balanced Managed Fund II 0 % %
    Equity Managed Fund II 100 % %
    Growth Fund II 0 % %
    Secure Managed Fund II

    which one should i choose?

    1. You have to choose depending on your age, risk taking ability .

  20. Chandan says:

    Hello Manish,
    I have taken HDFC Life Policy – Unit Linked Endowment Plus II on 30-04-2009 and paid 10k per month till 30/12/2012 and then converted to paid up as i had few problems.. The fund value was 4.3 lakhs as on 12/9/2014. Now i wanted to surrender the plan as i thought it was just not beneficial (for which i went for a pure term plan with single premium). Now, when i inquired surrender charges, HDFC folks told me i need to pay atleast 34000 as surrender charges. Since i had some funds, i wanted to pay up till 5 years (by making the policy in-force) so i paid 2.4 l to convert it to in-force this month 10/12/2014. the fund allocation is as per “Equity Managed Fund II”.
    As of now since april 2009, i have paid the premium for 68 months and yet, my fund value is only 6.4 l => i have incurred a loss of 40000.
    My query to you is
    1) should i opt for fund switching to “growth fund” and wait for another year for th e losses to break even?
    2) should i continue paying till another year with same fund allocation?
    3) what is the best i can do to minimize my losses (or convert profit).

    Thanks in advance for your wonderful feedback so far..

    1. I would say transfer it to DEBT fund option as of now and pay for next 1 yr and then withdraw the full amount !

      1. Chandan says:

        Hello Manish,
        Thank you for your reply.
        I didnt understand why you are suggesting to switch to “Debt” fund option? What will happen if i convert it to “Growth” fund option?

        1. I believe its already in Growth option by default . I suggested to shift it to DEBT because its safe in that way , the money after this point does not DECREASE . If you understand how equity works and are betting on it in near future, only then continue with equity option !


          1. Chandan says:

            Thank you Manish for your quick response.. I would do so accordingly.

  21. Anirban Roy says:

    Hi Manish,
    I am 25 years old and have started my investment for the last 2 years.I have a lic endowment policy(Jeevan anand) of 6lakhs and a lic term insurance of 50lakhs.

    After reading your posts and comments for the last 3 days it seems that i have done a mistake by investing in HDFC SL pro growth super II(invested amount 55k annually).
    I have paid the first premium only and the next premium is due in December.
    I have planned to start investing in SIP soon. Other than the ULIP I don’t have any investment in equity.
    Do you recommend me to terminate my ULIP policy and invest the amount through SIP.In that case can you please suggest some good SIP for me.

    Thanks for all your posts which have helped me understand at least this much.

    1. Yes, we suggest stop your ULIP payments and take the money once it matures !

  22. gireesh says:

    Hi Manish,

    One of my uncle had taken Life time super pension policy in 2007. He had paid up premium worth Rs.80000/- till 2012.
    He has asked me to manage this ULIP policy as I had some knowledge about the fund management. When I took the policy the fund value was Rs.67000/-. I have been managing it since June 2013 and the fund value right now is Rs.1,18000/-.
    My uncle is keen on withdrawing the policy. Shall I ask him to stay invested in this policy or close asap?

    1. If its too tough to manage, I would choose to redeem and buy something more easy to manage.


      1. gireesh says:

        Thanks for your advice Manish.

  23. Sachin says:

    Hi Manish,

    I had invested in HDFC ULIP (Endowment Suvidha Plus) almost 5 yrs ago. I invested 3 lacs and I am still in a big loss with amount hovering around 2.6 lacs. I switched over from growth fund to more debt based funds almost a year ago. I believe the markets were not high at that time. It is a 10 year fund with a lockin of 3 years which is already over.

    What would be a good advice, so that I can atleast recoup back the 3 lacs rather than facing any financial losses. The markets are high now and I believe it is not a good time to shift to equity now. Please advice.


    1. Its surely not a good time to shift to equity now .. I mean the markets have run high now from last 1 yr . So it was a better time to invest in equity one year back .

      I think you should just surrender the policy now and restart your investment plan !

  24. Dwipen says:

    Manish….I am looking for a Pension plan but through, I have been taken through one plan from Aviva named “Life Unit Linked Balanced Fund” which is showing all big figures after 15-20 yrs… I would need your expert advise on the same, as this is Unit Linked based plan, so bit skepticle… pls advise whether this plan is good or you would recommend something else. End goal is to either get a Lumpsum amount when I am 60 yrs (current age 40 yrs) or use that fund in Annuity to get monthy pension…thanks in advance

  25. mayank says:

    Hi Manish,
    I have taken a Reliance Super InvestAssure Plus Plan by paying a premium of 25000 in 15/12/2008 .I have paid 3 installments of 25000 premium till now.
    right now my fund value is 54,600.As i had not paid the premium from last 2 years,therefore my policy will expire on 15/12/2013

    Please suggest whether I should pay the premium for the policy or to surrender and get the current fund value.



    1. Better surrender it . But what is the lock in period ?

      1. mayank says:

        3 years

        1. In that case, I dont think there will be any surrender charges nor any tax implications

  26. LG says:

    Dear Sir,

    Kindly enlighten me on the following.

    I had booked a HDFC Standard Life Endowment Plus II Policy with Balanced Managed Funds for my son while he was 23 years old and the annual premium I pay for this is Rs.50,000/- p.a. and the term is 30 years. He has so far paid a premium of Rs.2,50,000/- till date and the fund value as of today stands at Rs.2,45,000/-. Is this a safe policy for a term of 30 years? Moreover, I do not know much about this ULIP neither the switches but I do keep a regular tab on the fund value from time to time. Can you please guide me as I am a retired mother and it is only because the bankers at HDFC put a rosy picture before me that I thought I could invest in this Policy.

    1. Its not for you . first, its not a safe product . Next its a volatile thing linked to stock market . Get out of it ;

  27. siva says:

    Hi Manish,
    I have taken a Reliance Life Total Investment Plan Series -1 single premium ULIP with the funds of Life Energy, Life Mid cap and Infrastructure by paying a single premium 25000 in 05/06/2008 as per that day’s NAV 13.2 avg for all funds. Today when I notice these above funds the fund value is just 17,500.

    Please suggest whether I should go for fund switch to at least get the amount invested or to surrender and get the current fund value.



    1. I would say better get out of the fund now

  28. Chetan Ambi says:

    Yes Manish.. I am following KISS – Keep It Simple Stupid :)..

  29. Chetan Ambi says:

    Currently I don’t have ULIPS in my portfolio. Just simple products like MF’s, PPF, EPF, FD, RD etc. I find it difficult to understand ULIPS. In future if I understand them I will think of buying ULIPS that time.

    btw, nice article on ULIPS Manish..

    1. Thanks Chetan ..

      Keep it simple 🙂

  30. Hari says:

    Hi Manish,
    ULIPs don’t disclose the portfolio. could you please cover in some post.


    1. Thats the issue .. there is no transparancy !

  31. Siva says:

    Hi Manish,

    I have read a lot about ULIP’s in this forum, and all are good. My observation is ULIP’s are good for long term (If i am not wrong). Also, i checked with some insurers as below and would request you to guide in choosing one.

    1) ICICI Pinnacle
    2) HDFC ProGrowth Super
    3) Aviva Wealth Builder


  32. Mayank Pandya says:


    Can u plz suggest best funds in HDFC life Insurance to switch currently i am getting huge loss by investing 100% in growth fund. I have a decrement of 40 K ruppees compairing my investmenet made in this policy .Policy name is Unti Link Endowment Plus 2..

    1. You mean mutual funds ?

      You can go with HDFC Prudence or HDFC Equity

  33. Kannan says:

    Hi Manish

    I had taken a ICICI prudential ULIP way back in Dec, 2006 with a monthly premium of 3000/- for a 10 L cover and a 42 yr premium paying term. I had it fully in the maximizer fund. I never ever used any switching option and I also realize that I dont have the appetite for the same. Now, the total investment is ~2, 12,000/- and I’m told I’ll get the entire fund value back if I withdraw. Could you kindly let me know in simple terms, how do I calculate the return on this investment? Also, i want to exit this ULIP now as I hear mortality charges etc.. go up as you are further in to the policy. Your thoughts please

  34. Swetank Saroj says:

    Hi Manish,

    I do not know whether this is the proper section to mention my details or questions.
    Request you to guide me accordingly.

    I own the below mentioned ULIPs:
    1. MetLife Smart Plus
    2. Birla Sunlife DreamPlan (Children’s Dream Plan)
    3. ICICI Health Saver
    4. Kotak Super Platinum Advantage (Unit Linked Endowment Plan)

    Out of the above 4 only I can understant my Metlife policy (may be I paid more attention and may be its really simple); this is the only plan which is in profit till date.

    By profit I mean I just calculate the return in absolute term means what I paid and what the present fund value; e.g; if I paid 1000 (in total) till date and the value is 1200, profit of 200. I know this is the worst method of calculation; the best way is to check the actual or net yield and compare it with other MFs.

    I have used the switching facility only for my Metlife policy, other policy have different kind of exposure either balanced or a mix of equity and debt; hence never used the switch facility.

    I need to understand my policies in depth, what you suggest, posting the details on forum or giving a call to respective companies and ask for an advisory visit?

    In term of their annual payments, I do not have any problem, its a very small amount for me. If I had not left smoking, my smoking cost would have been more than the cost of these ULIPS. SO I can still assume for the rest of the time that the premiums are my smoking expenses.


    1. Swetank

      I request you to open thread for discussion on our forum . The best conversations happen there and we can talk at length ! 🙂 –

  35. abhinav says:

    really very very good article. very well written indeed.
    I seriously got to know about ULIPS now.

    Finally, I would like to know that if I want to get my money invested in safest fund as well as i cant check out the status of the market again n again as you already said, which would be the best fund.

    I read about funds and considering for “bond fund” to switch in.
    please guide.

    1. Abhinav

      In that case better invest in an INDEX FUND .


  36. Manish says:

    Hello Manish,

    I read out all your given information related to ULIP product’s,It’s a really very good and very help full to new investor who doesn’t know about Market.

    1. Manish

      Thanks 🙂 . Keep reading and spreading your knowledge to others

  37. Nava says:

    Thanks for the valuable information about ULIP.
    I am having ICICI Life time Super Pension ULIP(without insurance option). I have completed my 3 years period. Now is the due for the 4th annual premium.

    My question here are,
    Is it possible to pay the premium halfyearly or quartely from 4th year. .?
    Is it possible to pay partial amount as we like instead of full premium from 4th year onwards..?
    Is top up possible at any point of time or only along with the premium..?

    1. Nava

      These are all product specific questions , your policy documents will have all this info . Did you have a look in it ?


      1. Nava says:

        Thanks for your reply.
        At present I am a NRI, documents are in home.
        I will go through it while I visit Inida.

        1. Nava says:

          Thanks for your advise to use switch option.
          I am going to follow the below mentioned strategy for switching the fund between equity & debt. Please review and advise.

          1) If the Nifty is above 50EMA then I am going to have the equity:debt ratio as 90:10.
          2) If the Nifty is below 50EMA and above 200EMA then I am going to have the equity:debt ratio as 50:50.
          3) If the Nifty is below 200EMA then I am going to have the equity:debt ratio as 10:90.

          1. Nava

            Have you tested this on past data ?


          1. Nava says:

            Thanks for your quick reply. I have not tested it. But visually looked into the chart for the past few years.
            I will check it with the actual data and let you know the result.
            Is it Ok to check with past three years data..?
            If you have anyother simple strategy to decide the switching criteria..could you pl. share..?
            I will be usefull to compare the results with my planned strategy..

            1. Nava

              Yes 3 yrs looks good as it has ups and downs both . Use PE nifty as a measure to switch, you can see the post on nifty PE for this .

  38. vishnu says:

    Today, is the first time I have entered to your web site, and I already 3 articles.
    It is worth going through this site for any commoner. Good Post. If I would have come across this some 4 years back, i wouldnt have taken a ULIP. 🙁 Atleast now I know that my policy can be managed.:) . One info I would like to know, As per DTC ULIPS are exempt from 80C. So, what would be the status of a policy taken a year back (I mean suppose last year I took a policy just for 80C and now I cant discontinue and not even claim on 80C)

    1. Vishnu

      Thanks , good to know that you are liking the website and what you learn from it .

      ULIPs are still under DTC , just that the limit would be 50k .


  39. sanoj says:

    Hi Manish,

    Can u update us regarding the new ulip policy terms and some new ulip plans for wealth creation in long terms.


    1. Sanoj

      yes , will do that soon 🙂


  40. pravin says:

    Dear Sir,

    I like to invest in lic ulip plan market plus 1 pls tell me can i take this police

    1. Pravin

      better read more on ULIP;s , Its not suitable for general investor .


  41. piyush says:

    i”m submit 1500rs quaterly in a LIC and after 3 year it is mature and now i don”t know how to get money back . the agent from which i take this policy is died now tell me what can i do now plzzz

    1. Is your policy maturing after 3 yrs ? or do you want to surrender it after 3 yrs, its not clear . Contact an LIC office to find out what you have to do for this .


  42. hayat shaikh says:

    it was a good explanation given

  43. ronak kumawat says:

    manish ji,

    plz tell me that ULIP is gud 4 investment cum insurance … i want 2 do insurance .. plz suggest me what i have do .?
    which company & product ?
    right now my age is 22 ..

    1. Ronak

      Go through ULIP and Insurance articles on this blog and you will get good idea of what to do 🙂 .

      In short get a term insurance and buy MF 🙂

      Call me Manish .


  44. smithjohn1948 says:

    “If you just want to buy a ULIP and sleep for 10 yrs , ULIPS is not for you..”

    i agree, but i have a question based on my real personal experience with ULIP. In may 2008 i bought Aviva LifeBond5 and invested 100% in Index Fund. in only my first policy year (may 2009) i got 21% return (after deducting premium allocation + policy administration + mortality + fund management charges) on my actual investment minus all these charges. And i didn’t performed any switch option (4 free per policy year). i just paid quarterly premiums and sat back.

    please explain how it is possible when you says ulips only effective when performed switch option.

    Another my question is:
    they say Equity is beneficial only for long term, in other words eventually stock market goes up over any span of time.

    my question is “if i stay invested in Index fund for my next 10 policy years and do not switch on all 10 years, shouldn’t i get high returns?” as the stock market will go way too up by 2018.

    1. smithjohn

      The reason you got 21% return is because the market performed very well and even after deducting all the charges and all you got good return , but ask what would have been return if you didnt invest in ULIP and actually invested in some Equity MF or pure index fundf, it would have been much much more than 21% , may be 50%+ .

      So what happened in your case is a specific case, if you dont utilize the switch facility than the result would be same as mutual funds ,infact less than that because then you pay higher charges also . Are you understanding ? doubts ?


  45. Amol says:

    Recently I heared about LIC Wealth Plus policy, the premium should be paid for only 3 years, and after that they will be giving the returns on highest NAV till maturity. Will this policy be beneficial?

    I am a regular reader of your blog, and came to know that ULIPs are not the best pick, but when I came to know about this policy, and the hype of policy, I couldnot resist myself from asking the Qs.

    1. Amol

      Highest NAV thing is another thing which is mis sold most of the times, I am not sure of LIC policy but you can read this one :


      1. prabeesh says:

        I made mistake by buying ULIP from Bajaj alliance ,the policy name is Capital Unit Gain. I have already completed 3 year payment and the next due date is around the corner.
        I choose bond and liquid in 80-20 ratio and no equity . The term of policy is 49 years and sum assured is 6.25 lakh.

        Now i have some idea about this switching in ulips and market movement as i am following your blog and markets for about 6 months now.

        My question is,I am fine with continuing the 25K yearly premium. I checked with bajaj and they confirmed that the surrender value is linked to term of policy and currently it will be 56%.

        Is it worth continuing as surrender even after 15 years will be high, as its linked to term of policy which is 49 years.

        Is there any way to get profit out of this ULIP?

        1. Prabeesh

          First thing you should check with Bajaj is how are they going to restructure the ULIP as per new mandate from IRDA . I am not sure if it will help you much as you have already paid much of the commissions 🙂 . but still ask them

          One thing which must be stopping you from getting out of this is “losses” you are making . Just think for a moment , does continuing this policy and getting bad returns because you cant handle is not equally bad and in a way you are loosing your money , Getting 44% absolute loss right now is much better than paying premium for 20 yrs and then getting very bad returns which you could have made some other way ..


  46. jagmint says:

    Hi Manish,

    Really grateful for the information provided.

    I am very late, only after getting some info from my friend recently, i began searching internet for saving my money invested in ULIPs.

    I have taken ICICI Prudential Life Time Super Pension ULIP Policy on 12/07/2007, paying 834 Rs monthly (yearly 10000). The fund name is Flexi Growth, 100%. (Flexi growth has high risk and high returns)

    Another from HDFC Standard life, Policy name: UNIT LINKED YOUNG STAR, taken on 11/09/07, monthly premium 1500 Rs. The fund name is Defensive Managed Fund.

    I want my money to grow not diminish. only after 5 years the surrender value is 100%. After 3rd year its 96%, 4th year 98%. for ICICI.
    For HDFC i don’t know the surrender value

    Till now i haven’t made any switches among different funds. just paid premium and kept quiet. I don’t know anything about switching funds, and knowledge about market, but i am willing to learn.

    My question is should i stay in this ULIP or should opt out. I don’t want any scheme just protection of my money, And low risk investment.
    If i have to opt out how much money will i lose.

    I request your advice here.
    Thank You

    1. Jagmint

      You have got into unsuitable products in that case 🙂 . ULIPs are advanced products and you need knowledge of switching , market movement etc to make best use of those ULIP’s else you are better buying plain mutual funds and term insurance which i would prefer for anyone .

      Read :

      Its not the matter of “ready to learn” . Even I am ready to learn a lot of things in life, that does not mean i have to study them , there is an option of not learning it and not taking care of it. you should have good interest in some field also .


  47. suresh says:

    hi ,
    I suresh planing to take ulips, So can u tell me abt the ulips,and in ulips which shall i take ,i ahve read article but i confused abt the ulips .. so please suggest me what to take in ulips like only equity ,or only debit,or both equity+debit.. which one is useful and how to mange that for long term.
    And also when i take the ulips which website is good to see abt the markets so that i can make any correction at that time..
    plz tell me and i am kindly waiting for u reply

    1. manish says:


      ULIP’s are complicated products and have high costs associated with it . So its better you dont take it unless you understand how to manage it well .


  48. karthik says:

    Hi Manish,
    I had taken a LIC ULIS scheme in 2006 by paying 20,000 . I further paid a sum of 20,000 in the year 2007.. Since my locking period was of 3 years .. I opted for the refund of the entire units and amounts …Instead of getting the total principal and bonus (around 40,000+) I only got about 20,000. The logic given was that its a part payment and the money which was being locked since 2006 is given to me in 2009 and the amount paid in 2007 would be provided only next year 2010 . Is this true that for every installment paid the locking period is 3 years… I think all this belong to one single policy or account and as such the locking period should apply from the start of the account till 3 years….

    Please help and suggest


    1. manish says:

      If its a ULIP . then its not true .

      In ulips the lockin period is 3 yrs from the start of first premium . Check your policy document . thats the source of truth . dont list to agent or any official .


  49. Ajay says:

    I had bought a ICICI Prudential ULIP. I have paid 3 premiums, so am done with the lock-in period. I plan to stop further premiums and invest the same amount as SIP. When I contacted the ICICI customer care, I got to know that there is an option of stopping the premium but the insurance coverage continues for which the mortality charges get deducted from the existing units. Is it worthy to go for the continuance of the insurance coverage or stop the ULIP.

    1. manish says:

      you could have stopped the premium any time you wanted , even before 3 yrs . Not an issue . Its accepted . 3 yrs lock in period just says that your money will be locked for atleast 3 yrs . thats all .

      So now the question of continuing it . So the thing is how well are you managing it ? Are you using switch facility efficiently , Do you have the expertise ? Do you want more than 15% over long term ? If answers to all these are no ! . then it does not makes much sense to continue .. you will do better in Mutual funds then , given you consistenly invest and do your portfolio rebalancing once in a year or two year .


      1. Ajay says:

        Thanks Manish for the quick response.

  50. Manish Chauhan says:


    Well .. it would be great to exit , if you dont understand the product. Its like marriage .. do you want to compromise with some one who you dont even understand and cant enjoy with or would you like to divorce and look for other opportunity ..

    As its said .. If Chemistry is missing , Arithmatic will never work


    Personally I had nothing personal with ULIPS , Its mostly agents and the people who mis-sell to people without understanding their needs. If you give ULIP to me .. I can beat Mutual funds by hugh margin , because I have interest , knowledge of markets and time for that .

    Its not true for everyone and thats totally fine :0


    1. Rayudu says:

      1 year back i had taken HDFC unit linked endowment plus2 plan.It is having different fund options(balanced,defensive,equity,growth). My fund option was 100 % equity fund(60% – 90% in equity + 10- 40% in debt).
      With the help of Switch option how i can maintain the equity as 80% and debt as 20%?

      1. Rayadu

        The fund options will have their own predefined ratios in equity or debt , for this customised ratio you might have to talk to your fund .


  51. aalawanthar says:

    Manish, Gud presentation by u for ulips product, ur correct there is so many charges thats r not revealed by the advisor but now IDBIFORTIS LIFEINSURANCE AND KOTAK LIFE INSURANCE both r having a gud fund name Aggressive Asset Allocation fund in IDBI and Dynamic floor fund in KOTAK it will switches automatically depend upon the market.

  52. NKanani says:

    Thanks Manish, I realized this just yesterday – when I calculated the parameters and checked the current valuation of my ULIP. I have completed 2 years in the ULIP, now I am confused whether is it better to exit after 3.5 years [using Top Up, to ensure that there is no charge for surrender value] or whether it is wise to manage it until end [i.e., 10 years].

  53. Anonymous says:

    Well, there're explanations on the web – see How to Calculate Returns on Investments – scroll down for the example.

  54. Manish Chauhan says:


    Thanks for the information , but still its too high level and I dont understand the meaning for it , Can you put it in simple wrods .


  55. Anonymous says:

    From the Excel Help:

    Returns the internal rate of return for a schedule of cash flows that is not necessarily periodic. To calculate the internal rate of return for a series of periodic cash flows, use the IRR function.

    XIRR is closely related to XNPV, the net present value function. The rate of return calculated by XIRR is the interest rate corresponding to XNPV = 0.

  56. Manish Chauhan says:


    Thanks for the information . I didnt know about this . Can you please put more info about XIRR ?

  57. income.portfolio says:


    the biggest benefit of IRR is that it incorporates time factor (in addition to expenses).

    Plus IRR is good only for “fixed” time based regular input/outputs.

    For “irregular” time based inputs or outputs XIRR is a better measure.

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