ULIP Calculator
InsuranceA ULIP bundles life cover with a market-linked investment, but a stack of charges quietly eats into returns. See what your fund is really worth after those charges — and how far it lags a no-charge investment.
In short: A ULIP calculator estimates the maturity value of a Unit Linked Insurance Plan after premium-allocation, policy-administration, fund-management and mortality charges are deducted, so you can compare the after-charge return with a plain mutual fund.
Your inputs
Your inputs
- Annual premium
- ₹1,00,000
- Policy term
- 15 yrs
- Expected fund return
- 10%
- Total annual charges
- 2%
Results
Maturity value
₹29,32,428
Net of charges
Total premiums paid
₹15,00,000
Est. charges drag
₹5,62,545
Vs a no-charge fund
Net CAGR
4.57%
On total premiums
After-charges vs no-charge growth
How ULIP charges pull the fund below a comparable no-charge investment.
Year-wise fund value
| Year | Premiums paid | Fund value |
|---|---|---|
| 1 | ₹1,00,000 | ₹1,08,000 |
| 2 | ₹2,00,000 | ₹2,24,640 |
| 3 | ₹3,00,000 | ₹3,50,611 |
| 4 | ₹4,00,000 | ₹4,86,660 |
| 5 | ₹5,00,000 | ₹6,33,593 |
| 6 | ₹6,00,000 | ₹7,92,280 |
| 7 | ₹7,00,000 | ₹9,63,663 |
| 8 | ₹8,00,000 | ₹11,48,756 |
| 9 | ₹9,00,000 | ₹13,48,656 |
| 10 | ₹10,00,000 | ₹15,64,549 |
Premiums modelled as an annual annuity-due compounding at the net (after-charge) return.
How the ULIP Calculator works
Formula
- Premium
- Annual premium paid into the ULIP
- Expected return
- Gross fund return before charges
- Total charges
- Allocation + admin + fund-management + mortality, as % of fund
- Net return
- Expected return minus total charges
Step-by-step calculation
Worked with the default values.
- 1
Net return after charges
10% − 2%
= 8% p.a.
- 2
Maturity value (net of charges)
Annual premiums grown at the net return
= ₹29,32,428
- 3
Charges drag
₹34,94,973 − ₹29,32,428
= ₹5,62,545
- 4
Net CAGR on premiums
CAGR(₹15,00,000 → ₹29,32,428, 15 yrs)
= 4.57%
How it works
- Each annual premium is added to the fund and grown at the net return — your gross expected return minus total charges.
- A parallel no-charge projection grows the same premiums at the full expected return, so the gap shows the cost of charges.
- The difference between the two at maturity is the charges drag; the net CAGR reveals the true return on your premiums.
Examples
₹1,00,000/year for 15 years, 10% gross return, 2% charges
Net return of 8% grows premiums to roughly ₹29 lakh — around ₹4–5 lakh less than a no-charge fund.
₹2,00,000/year for 20 years, 12% gross return, 2.5% charges
Net return of 9.5% builds a corpus far below the same fund without the charge drag.
Understanding the ULIP Calculator
What a ULIP really is
A Unit Linked Insurance Plan (ULIP) is a hybrid product that packages life insurance with a market-linked investment. Each premium is split: a portion buys life cover, and the remainder is invested in funds of your choice — equity, debt or balanced. The value of your holding is tracked in units, much like a mutual fund.
The appeal is convenience: one product for protection and investment, with tax benefits under Section 80C. But that convenience comes at a cost that is easy to overlook.
The charges that create the drag
ULIPs deduct several layers of charges before your money compounds:
- Premium-allocation charge — taken off the top of each premium, so less than 100% is invested, especially in the early years.
- Policy-administration charge — a recurring fee for running the policy.
- Fund-management charge (FMC) — capped by IRDAI at 1.35% a year, deducted from the fund.
- Mortality charge — the cost of the life cover, which rises with age.
This calculator rolls these into a single approximate annual figure and grows your premiums at the net return (gross expected return minus charges). It runs a parallel no-charge projection so the gap at maturity — the charges drag — is explicit. A 2% annual charge on a 10% gross return quietly turns into an 8% net return, and over 15–20 years that difference compounds into lakhs.
Lock-in and liquidity
Every ULIP carries a five-year lock-in. You cannot withdraw during this period, and if you stop paying, the money moves to a discontinuance fund earning minimal returns until the lock-in ends. This enforces discipline but limits flexibility.
Taxation after 2021
For policies issued on or after 1 February 2021, maturity proceeds are tax-free under Section 10(10D) only if the total annual premium is ₹2.5 lakh or less. Above that, the gains are taxed as capital gains, aligning high-premium ULIPs with equity mutual funds.
The bottom line
For most investors, term insurance plus a low-cost mutual fund delivers more cover and better net returns than a ULIP, precisely because the charge stack and modest life cover eat into growth. Use this calculator to quantify that trade-off before committing.
Pros
- Combines life cover and market-linked investment in a single product.
- Fund switches let you move between equity and debt without a fresh tax event.
- Premiums qualify for Section 80C deduction, and maturity can be tax-free within limits.
- The five-year lock-in enforces a disciplined, medium-term holding period.
Cons
- Multiple charges — allocation, admin, FMC and mortality — drag down net returns.
- Life cover is usually modest compared with an equivalently priced term plan.
- The five-year lock-in and discontinuance rules limit liquidity and flexibility.
- Gains are taxable when annual premium exceeds ₹2.5 lakh for post-2021 policies.
Tips
- 1Compare the after-charge maturity value here against a term plan plus a mutual fund.
- 2Prefer ULIPs with low or nil premium-allocation charges and the lowest FMC.
- 3Keep annual premium at or below ₹2.5 lakh to retain tax-free maturity on post-2021 policies.
- 4Stay invested beyond the five-year lock-in so front-loaded charges have time to be diluted.
- 5Use fund switches to de-risk into debt as you approach your goal.
Frequently asked questions
Everything you need to know about the ULIP Calculator.
What is a ULIP?
What charges does a ULIP carry?
What is the lock-in period for a ULIP?
Are ULIP returns guaranteed?
How are ULIPs taxed after the 2021 rules?
Is a ULIP better than term insurance plus a mutual fund?
Can I switch funds within a ULIP?
What are mortality charges in a ULIP?
What tax deduction do ULIP premiums qualify for?
Should I surrender a ULIP that is underperforming?
Methodology & sources
How the ULIP Calculator is calculated, and where the underlying rules come from.
How we calculate it
Every result is produced by a single, shared and tested financial-formula library used across the whole site — so the maths is consistent from one calculator to the next. Figures are estimates based on the inputs you enter and standard assumptions (such as regular compounding and constant rates); real-world outcomes vary with taxes, fees and changing rates. All calculations run in your browser — nothing you type is stored or sent to a server.
Editorial policy & disclaimer. FinCalcHub provides free educational tools and estimates — not personalised financial, tax or investment advice. Verify important decisions with a qualified professional. Read our editorial approach, disclaimer and privacy policy.
Last reviewed for accuracy on .
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