ULIP Plan Comparison India

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Comparing ULIPs in India can help you choose an appropriate plan that can enable you to meet your financial goals. ULIP is a type of insurance scheme that provides not only life insurance but also market-linked returns. Therefore, you can ensure your family remains financially secure after your demise. As ULIP plans vary in terms of funds, costs, flexibility, profitability, and other aspects, a comparison becomes crucial before investing. show less ...Read More

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Written bySumit Narula

Investment Writer

Published 30th July 2026

Reviewed byPrateek Pandey

Last Modified 30th July 2026

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Why ULIP Plan Comparison Requires a Framework, Not a Ranked List?

There is no single ULIP that suits all investors. You need to compare ULIP plans in India based on certain factors, including your financial objectives, risk appetite, investment horizon, and insurance requirements, before making an investment decision.

You should not base your investment choice on the rankings of ULIP plans. Instead, compare them based on a defined set of criteria that cover many factors. These factors include fund selection, past performance, fees, flexibility, life coverage, lock-in period, tax advantages, and the insurer's strength.

The Criteria ULIP Comparison Framework

For ULIP plan comparison, use a systematic list of criteria. Here are some of the key aspects based on which ULIPs in India can be compared:

● Fund Management Charge (FMC)

Fund Management Charge (FMC) is an annual charge deducted for the management of ULIP funds. As the charge directly influences returns over time, comparing the FMC across various ULIP funds can be useful.

● Premium Allocation Charge

The premium allocation charge is the amount subtracted from your premium before it is invested in the funds. Generally, the lower the allocation charge, the better it is for wealth creation through ULIPs.

● Number and Categories of Available Funds

One of the key considerations in choosing an ideal ULIP is its wide range of investment options such as equity, debt, and hybrid funds. Comparing the available funds and their categories can help you make an informed choice that aligns with your investment strategy and risk profile.

● Loyalty Additions and Return of Mortality Charges (ROMC)

Some ULIP plans offer benefits such as loyalty additions and return of mortality charges (ROMC) to policyholders after certain milestones or at maturity, depending on the policy terms and conditions. Such benefits need to be considered when comparing ULIPs.

● Fund Switch Facility

The fund switch facility in ULIPs helps transfer funds between equity, debt, and hybrid funds in response to changes in investment goals or the financial environment.

Reading a Benefit Illustration - The Most Underused Comparison Tool

The ULIP Benefit Illustration (BI) is one of the most valuable yet largely neglected tools for comparing ULIP plans. As per the rules laid down by IRDAI, a BI provides year-wise projections of allocation to premiums, applicable charges, fund value, surrender value, death benefit, and yield at return rates of 4% and 8%.

Going through the BI will make you realise how charges affect returns, help you compare various ULIPs more effectively, and ensure that the ULIP plan meets your needs.

5 ULIP Comparison Mistakes to Avoid

It is essential to consider factors beyond return figures when comparing ULIP schemes. Avoiding the following common traps will help you choose the right ULIP scheme and make an informed decision:

● Comparing Funds Across Plans at Different Assumed Return Rates

It is advisable to compare ULIP schemes' illustrations assuming the same return rate, as recommended by IRDAI. Comparing schemes under different return assumptions may paint an inaccurate picture of their performance.

● Choosing Based on Loyalty Additions Without Netting them Against FMC

Even though loyalty additions increase the scheme's final maturity amount, this factor cannot be compared on its own. It should be compared with Fund Management Charges (FMC) and other policy-related charges.

● Buying the Plan with the Highest Recent Fund Return

The latest performance of funds may not predict future performance. Rather than choosing a ULIP solely because of past performance, consider the stability of that performance and its compatibility with your investment approach.

● Comparing Too Many Plans Simultaneously Without Shortlisting

Comparing too many ULIPs at once can be confusing. You need to first select a few plans according to your financial objectives, risk level, funds, fees, and other factors. Shortlist one or more plans and then look for more plans to shortlist a few more of them. This way, you can end up choosing the right plan(s) for you.

Conclusion

A proper comparison of ULIP plans will enable you to choose a scheme that suits your financial objectives and insurance requirements. Rather than focusing on expected returns, you need to look into issues such as fund choices, fees, fund switching, and fund performance.

After investing in the scheme, review the portfolio from time to time, switch between funds when required, and stay invested for the long term.

Frequently Asked Questions (FAQs)

How do I compare ULIP plans in India?

ULIP plans in India can be compared by analysing various aspects, such as the number of funds available, the fund's past performance, policy charges, policy flexibility, the amount of life coverage, and the policy's features.

Analyse benefit illustrations using the same rate-of-return assumption and use a ULIP calculator as well.

What is the best ULIP plan in India?

There is no single best ULIP plan suitable for everyone in India. Every investor has different financial goals, risk appetite, premium outflow, and investment time horizon. You should not rely on the returns offered by a particular plan; instead, analyse all the parameters that help you choose the right plan for the investor's future goals.

Which factors should I compare when choosing a ULIP plan?

For comparison of ULIPs, consider factors such as fund choices, past performance, policy costs, ease of switching funds, life insurance cover, and the mandatory five-year lock-in period. Moreover, other aspects to consider include ULIP tax benefits, insurer credibility, and other policy-related features.

What is a Fund Management Charge (FMC) in ULIP and why is it important?

The Fund Management Charge (FMC) is the charge levied by the insurance company for managing the fund invested in ULIPs. This charge is expressed as a percentage of the fund's Net Asset Value (NAV) and is adjusted using the fund's daily NAV. Even though FMC is charged gradually, it affects the overall gains from the ULIP investment.

What is ROMC (Return of Mortality Charges) in a ULIP?

Return of Mortality Charges (ROMC) is a special offer available in certain ULIP schemes, whereby the insurer reimburses all mortality charges paid during the policy period and increases the maturity amount of the fund by including them.

This encourages disciplined investment and improves the maturity amount, provided the policyholder remains with the plan until maturity and pays all premiums on time.

ARN: Jul26/Bg/23SN2

Sources:

https://www.sbilife.co.in/ulip-plans

https://www.etmoney.com/learn/mutual-funds/mutual-funds-vs-ulips/

https://www.kotak.bank.in/en/stories-in-focus/mutual-funds/mutual-fund-vs-ulip.html

https://www.psuconnect.in/financial/how-to-compare-the-best-ulip-plans-in-india-without-getting-confused

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ULIP Plan Comparison India

₹10k/Month invested since 2006
is now worth ₹3.92 Cr^7

Avail ₹10 NAV

23.9%^7 Past Returns

NFO CLOSES IN
Closes 9^th August

06

DAYS

:

01

HRS

:

34

MINS

:

23

SECS

Axis Max Life Investment Plans

Why ULIP Plan Comparison Requires a Framework, Not a Ranked List?