ULIP Policy

How To Determine the Investment Returns Of A ULIP Policy?


coverage and invests a portion of the premium in the stock market or other investment avenues. As an investor, it’s essential to keep track of the investment returns of your ULIP policy to make informed decisions. The investment returns of ULIP plans can be determined through a few key metrics, such as the Net Asset Value (NAV), the fund’s performance, and the charges involved.

In this guide, we will delve deeper into these metrics and provide you with a step-by-step process to determine the investment returns of your ulip policy.

How to Calculate ULIP Return on Investment?

If you’ve invested in a Unit Linked Insurance Plan (ULIP), a positive return indicates that you have earned profits from the date of purchase until the date you measured your returns. Conversely, a negative return signifies that you have incurred a loss. Therefore, calculate your ULIP returns to assess its performance and make informed investment decisions. Positive returns in ULIPs indicate a successful investment, while negative returns signal a need to re-evaluate your investment strategy.

  1. Firstly, to calculate the returns on your ULIP investment, you’ll need to be familiar with the current Net Asset Value (NAV) of your ULIP policy and its initial NAV at the time of purchase.
  2. Once you have these numbers, you can determine your ULIP’s returns by following these steps:
  • Begin by subtracting the initial NAV from the current NAV.
  • Next, divide this result by the initial NAV and multiply it by 100.
  • The outcome of this calculation will represent the return from your ULIP investment.

To put it simply, you can use this formula to determine the return of your ULIP:

(Current NAV of ULIP – Initial NAV of ULIP) / Initial NAV of ULIP x 100)

For example, if you have invested in a ULIP plan with an initial NAV of 50 and a current NAV of 75.

 Using the above-provided formula, you can calculate the return as follows:

(75 – 50) / 50 x 100 = 50%

Therefore, ULIP investment has generated a 50% return.

ULIP calculator is a practical way to assess investment returns, calculate premium amounts, and analyse various investment scenarios. With the Tata AIA ULIP plan calculator, you can know you ULIP returns in a matter of minutes.

Difference Between Standard Return and Compounded Return

A ULIP has two types of returns: Standard returns and CAGR returns.

  • Standard returns represent the return earned from one point in time to another over a specific period.
  • CAGR returns represent the annual growth rate of your ULIP investment.
  • Standard returns show the overall return earned over a while; they do not provide information on the profit or loss of each year.
  • On the other hand, CAGR returns help determine the profit or loss of each year and allow insurance companies to calculate the performance of a ULIP fund using either of the two metrics.

Factors influencing your ULIP plan

Various factors, such as plan charges and market performance, can influence the returns from a ULIP investment. For example, ULIP plans may include charges like surrender fees, fund management fees, mortality charges, and policy administration charges that can reduce your returns. To avoid losses, the returns you earn should exceed the charges incurred.

In addition, as ULIPs are linked to the market, the choice of funds can impact returns. Maintaining a balanced mix of equity and debt funds is recommended to achieve stable and high returns. Switching between funds to take advantage of market opportunities and researching past performance before investing can also help maximise returns.

In case you have particular investment objectives and are willing to undertake specific risks, consider the Tata ULIP plan. This plan is highly flexible regarding the various fund types available, such as equity, debt, and balanced funds. In addition, the extensive range of investment options empowers you to create a more varied portfolio that matches your investment goals.


Determining your ULIP policy investment returns is crucial to making informed investment decisions. The Net Asset Value (NAV), the fund’s performance, and the charges involved are critical metrics for tracking your ULIP investment returns. By understanding the difference between standard returns and CAGR returns, you can gain insight into the profit or loss of each year of your ULIP investment.

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