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ULIP Returns in 25 years

A 25-year ULIP policy combines insurance protection with investment opportunities in market-linked⁵ funds. When you pay your premium,... Read more a portion covers life insurance, while the remainder gets invested in equity or debt funds based on your selection. The extended duration of 25 years allows investments to grow through compounding while providing financial protection to your family. These policies offer features such as flexible fund switching, tax² benefits, and alignment with financial goals like retirement planning or education funding. In this article, we will see how ULIP returns in 25 years may impact investors and the various factors that influence their performance over time. Read less

A 25-year ULIP policy combines insurance protection with investment opportunities in .. Read more market-linked⁵ funds. When you pay your premium, a portion covers life insurance, while the remainder gets invested in equity or debt funds based on your selection. The extended duration of 25 years allows investments to grow through compounding while providing financial protection to your family. These policies offer features such as flexible fund switching, tax² benefits, and alignment with financial goals like retirement planning or education funding. In this article, we will see how ULIP returns in 25 years may impact investors and the various factors that influence their performance over time. Read less

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Invest ₹15,000/month¹ and get ₹5.3 Crore tax-free² returns (@19.87%)

All funds rated 4 or 5 stars³

Zero LTCG tax² + Life cover

Starts at ₹1,000/month

In this policy, the investment risk in investment portfolio is borne by the policyholder.

¹Illustrative returns @4%: ₹26.1 Lakh | @8%: ₹58.3 Lakh
Policy Term: 25 yrs. Past performance is not indicative of future performance. T&C apply. The linked insurance product do not offer any liquidity during the first five years of the contract. The policy holder will not be able to surrender/withdraw the monies invested in linked insurance products completely or partially till the end of the fifth year.

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₹11,99,016

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₹34.57 Lakh

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₹70.50 Lakh

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Life Cover (including Terminal Illness Cover): ₹21.7 Lakh

Accidental Death Cover: ₹10.9 Lakh

Accidental Total & Permanent Disability: ₹10.9 Lakh

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Tata AIA Premier SIP is a combination of the Tata AIA Smart SIP - Non-Participating, Unit-linked, Individual Life Insurance Savings Plan (UIN: 110L174V02) and Tata AIA Health Buddy - Non-participating, Non-Linked, Individual Health Product (UIN:110N183V01). Both Tata AIA Smart SIP and Tata AIA Health Buddy are also available for sale individually. Product option: Future Secure

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What is a 25-year ULIP policy?

A 25-year ULIP is an insurance plan with a tenure of twenty-five years, containing both life coverage and investment components. The structure works like this: when you pay the premium, one portion covers the insurance aspect; the remaining amount is invested in funds of your choice.

You can choose between equity funds, debt funds, or a mix of both, depending on your risk tolerance and financial goals. The policy structure allows for fund switching as circumstances change. After the initial five-year lock-in period, partial withdrawals become available if required. The basic structure of this scheme is to create a corpus during the policy term while keeping life cover throughout.

Tata AIA ULIP Plans

Tata AIA Premier SIP

Tata AIA Premier SIP is a combination of the Tata AIA Smart SIP, a non-participating, unit-linked, individual life insurance savings plan (UIN: 110L174V02), and Tata AIA Health Buddy, Non-participating, Non-Linked, Individual Health Product (UIN:110N183V01). Both Tata AIA Smart SIP and Tata AIA Health Buddy are also available for sale individually.

Tata AIA

Premier SIP

No Premium Allocation charges
Multi Cap Fund delivered 23.21% Returns (Benchmark: 16.65%)⁴
All funds rated 4 or 5 stars³

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Tata AIA Param Raksha Life Pro +

Tata AIA

Param Raksha Life Pro +

Multi Cap Fund delivered 23.21% Returns (Benchmark: 16.65%)⁴
All funds rated 4 or 5 stars³
Unlimited free fund switches + High life cover

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How does a 25-year ULIP work?

A 25-year ULIP policy combines protection with investment opportunities. A part of the premium goes toward funding life insurance for a safety net, while the remaining amount is invested in market-linked⁵ investments through equity, debt, or both. Over a long-term perspective, ULIP returns in the last 25 years may help achieve reasonable growth.

For instance, if yearly investment is ₹80,000 with 40% allocated to debt funds and 60% in equity funds, it may increase to approximately ₹58.48 Lakh after a period of 25 years at an average return of 8% against total investment of ₹20 Lakh. This shows the potential that ULIPs have in accumulating corpus for the fulfilment of long-term financial goals.

Note: These figures are illustrative and could be different depending on market performance and returns from the fund.

Our funds have consistently outperformed benchmarks

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Debt
Hybrid

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Why choose a 25-year ULIP policy?

Let’s see some reasons why you could consider a ULIP for 25 years:

Insurance with Investments: The policy covers your family financially, as well as allows your contributions to be invested in market-linked⁵ investments.
Long-Term Wealth Building: The 25-year period helps in compounding, where returns generate additional returns over time, subject to market conditions.
Fund Switching Flexibility: The allocation of funds can be changed depending on market conditions or life stage changes without incurring any tax implications. This feature provides adaptability to changing financial circumstances.
Tax Benefits: The premium paid is deductible under Section 80C up to ₹1.5 Lakh, and the maturity proceeds are exempt from tax2 under Section 10(10D), provided all conditions prevailing and applicable tax laws are duly complied with.
Goal Alignment: These policies can support various financial objectives such as education funding, retirement planning, or wealth accumulation. ULIPs also provide NRIs with opportunities to maintain India-based investments.

Factors that affect ULIP performance over 25 years

Below are some factors that may affect ULIP performance:

01

Market Movements

Fund values fluctuate with the markets. Equity funds respond to uptrends and downtrends in the stock market, while debt funds are impacted by interest rates. A 25-year tenure exposes one to multiple market cycles.
02

Fund Selection

Your decision between equity, debt, or balanced funds involves the potential for returns. While most equity funds carry higher growth potential with increased volatility, most debt funds generally provide more stable but moderate returns.
03

Policy Charges

ULIPs charge for premium allocation, fund management, policy administration, and mortality cover. The charges typically range from 1.5% to 3% per annum, which lowers the net returns over the investment period.
04

Premium Consistency

Regular premiums ensure the continuity of the funds' accumulation. Non-payment may lead to policy lapse or revival charges, thereby breaking investment growth.
05

Economic Conditions

Fund performance can be impacted by inflation, interest rates, and even changes in regulations. Economic growth supports performance for equity funds, while debt funds may perform during stable interest rate environments.
06

Switching Decisions

Rebalancing between funds at the right time may help optimise returns. However, too switching frequently or at inappropriate times may affect the overall performance. In general, rebalancing based on life stage is viewed as an effective strategy.

Invest more, get more!

Invest ₹5,000/month

You get

₹56 Lakh

You invest ₹5,000/month

Invest ₹10,000/month

You get

₹1.13 Crore

You invest ₹10,000/month

Invest ₹15,000/month

You get

₹1.69 Crore

You invest ₹15,000/month

Invest ₹20,000/month

You get

₹2.27 Crore

You invest ₹20,000/month

Plan now

Amounts are based on a 20-year-old non-smoker male, with a 20-year premium payment term and a 30-year policy term, Tata AIA Premier SIP Future Secure plan option with 100% invested in Tata AIA Multi Cap Fund at 8% Rate of Return. Returns at 4% for investment of ₹5000/month, ₹10,000/month, ₹15,000/month and ₹20,000/month are 24 Lakh, 49 Lakh, 73 Lakh and 98 Lakh respectively.

How are 25-year ULIP policy returns calculated?

Let's see how 25-year ULIP policy return rates are calculated

Step 1: Identify what portion of your premium is invested after deducting insurance and administrative charges. These charges typically lessen over time.

Step 2: Your funds are used to purchase units at the prevailing NAV, which varies each day according to the performance of the fund.

Step 3: Account for the total units accumulated over 25 years in case regular premium payments are made. Every payment buys units at the prevailing NAV.

Step 4: At maturity, multiply your total units by the final NAV to get the value of the fund. For instance, 8,000 units at ₹75 NAV = ₹6,00,000.

Step 5: Calculate the average annual return by using CAGR = [(Final Value ÷ Total Investment)^(1/25)] - 1.

Step 6: Remember, actual returns depend on fund performance, market conditions, charges, and any withdrawals or switches. Returns are not guaranteed.

How to maximise your ULIP returns in 25 years?

Let's see how to maximise ULIP returns in 25 years.

The Right Fund Mix: Your equity and debt allocation should be decided by factoring in your age, risk appetite, and financial goals. While younger investors can take a higher equity exposure, those nearing their goals may take a greater exposure to debt.
Monitor Performance: Review your fund's performance annually and compare it with appropriate benchmarks. If performance does not align with your financial goals, consider switching funds accordingly.
Minimise Charges: Some policies have low expense ratios and minimal charges. Even small differences in charges, like 0.5% every year, can make a significant difference over 25 years.
Stay Committed: Maintain regular premium payments and avoid early policy surrender. Remaining invested for the complete term provides the opportunity to benefit from market recoveries and long-term compounding effects.
Plan Strategic Switches: You can consider shifting your fund allocation on a gradual basis from equity-based to debt funds as you near your gaols so that market risk doesn't affect the accumulated corpus too much. However, reacting to short-term volatility and frequently switching funds should be avoided.
Align with Goals: Your ULIP investment should align with your financial goals: retirement, education, or wealth creation. This will help you stay focused and keep the discipline required throughout the entire tenure of investment.

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Conclusion

A 25-year ULIP policy can be a practical way to combine long-term investing with life insurance protection. Its extended duration allows your funds to benefit from compounding while offering flexibility through fund switching and goal-based planning. Since ULIPs are market-linked, returns depend on fund performance and economic conditions over the years. Evaluating your risk preference, reviewing your fund choices regularly, and staying invested for the full term can help enhance your overall experience. With the right approach, ULIPs can support long-term financial goals while maintaining essential life cover.

What is the average return on ULIP?

There is no fixed average return for ULIPs, as it depends on fund selection, market performance, and applicable charges. While equity funds ensure growth possibilities with increased volatility, debt funds are stable, though the returns may be moderate.

Can I withdraw my ULIP investment before 25 years?

Partial withdrawals are generally allowed after the completion of 5 years. The amount to be withdrawn would depend upon the policy terms and the value of the fund at the time of withdrawal.

How will market conditions affect ULIP returns after 25 years?

Market movements directly influence the NAV of the underlying funds. A long-term duration of 25 years may help moderate the impact of short-term market fluctuations, though it does not eliminate market-related risks.

Are 25-year ULIP returns adequate for very long-term goals?

Whether the returns from ULIP are adequate for long-term goals depends on the premium, choice of fund, risk appetite, and goals to be achieved. An individual should compare the projected outcomes with their financial needs.

Is it safe to rely on ULIP returns of last 25 years for planning?

Historic performance can be used for reference, but it should not be the sole basis of financial planning. The returns may vary because market and economic conditions change.

What is the maximum return of ULIP in the last 25 years?

There is no fixed maximum return, as the performance of a fund varies with time periods and market cycles. Over some market cycles, equity-oriented ULIPs could show long-term growth, although their returns are not guaranteed.

Would an investment in a ULIP be guaranteed to yield these returns over 25 years?

Most ULIPs don't guarantee returns because they are market-linked⁵ products. Final returns depend on the performance of the fund and applicable charges throughout the investment period.

Are there any tax implications on the returns generated by ULIPs over 25 years?

Tax² implication is related to policy structure and the tax regulations prevailing at the time. Maturity benefits are exempt from tax in some cases if certain conditions are satisfied. Consulting a tax advisor is recommended for specific circumstances.

Are there any bonuses or additional benefits for investors who maintain their ULIP investments for the entire 25-year term?

Some Unit Linked Insurance Plans for 25 years may offer loyalty additions or bonus units for long-term policyholders. These features vary by product and insurer and are not standard across all ULIP plans.

10.

Can I adjust my asset allocation within the ULIP to manage risk over 25 years?

ULIPs generally provide fund switching options, allowing you to reallocate between equity and debt funds. This flexibility enables risk management as your financial goals or market conditions change over the investment period.

The linked insurance product do not offer any liquidity during the first five years of the contract. The policy holder will not be able to surrender/withdraw the monies invested in linked insurance products completely or partially till the end of the fifth year.
Tata AIA Premier SIP is a combination of the Tata AIA Smart SIP, a non-participating, unit-linked, individual life insurance savings plan (UIN: 110L174V02), and Tata AIA Health Buddy, Non-participating, Non-Linked, Individual Health Product (UIN:110N183V01). Both Tata AIA Smart SIP and Tata AIA Health Buddy are also available for sale individually.
Tata AIA Param Raksha Life Pro + advertisement is designed for combination of benefits of following individual and separate products named (1) Tata AIA Smart Sampoorna Raksha Supreme Unit Linked, Non-Participating Individual Life Insurance Plan (UIN: 110L179V02) and (2) Tata AIA Health Buddy, Non-Participating, Non-Linked, Individual Health Product (UIN: 110N183V01). These products are also available for sale individually without the combination offered/suggested.
¹Illustration shows a monthly premium of ₹15,000 for Tata AIA Premier SIP for a 30-year-old male, standard life, premium payment term: 10 years, policy term: 25 years with 100% investment in Tata AIA Multi Cap Fund in Future Secure plan option. 4% and 8% are assumed rates of return. 19.87% is the 5-year return of Nifty 500 Index as of October'25. Maturity amount: ₹26,13,038 at 4% returns, ₹58,35,021 at 8% returns and ₹ 5,39,67,689 at 19.87% returns. The fund value calculation is done by projecting the past returns of Nifty 500 Index after adjusting for all expenses in Tata AIA Premier SIP. The above values have been calculated assuming 19.87% p.a. gross investment returns, which is the past 5-year return of Nifty 500 Index as of October'25.
²No Goods and Service Tax shall be applicable on Individual life insurance products as per prevailing laws. Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfillment of conditions stipulated therein. The Tax-Free income is subject to conditions specified under section 10(10D) and other applicable provisions of the Income Tax Act,1961. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere on this site. Please consult your own tax consultant to know the tax benefits available to you.
³All funds open for new business which have completed 5 years since inception are rated 4 star or 5 star by Morningstar as of August 2025.
©2025 Morningstar. All rights reserved. The Morningstar name is a registered trademark of Morningstar, Inc. in India and other jurisdictions. The information contained here: (1) includes the proprietary information of Morningstar, Inc. and its affiliates, including, without limitation, Morningstar India Private Limited (“Morningstar”); (2) may not be copied, redistributed or used, by any means, in whole or in part, without the prior, written consent of Morningstar; (3) is not warranted to be complete, accurate or timely; and (4) may be drawn from data published on various dates and procured from various sources and (5) shall not be construed as an offer to buy or sell any security or other investment vehicle. Neither Morningstar, Inc. nor any of its affiliates (including, without limitation, Morningstar) nor any of their officers, directors, employees, associates or agents shall be responsible or liable for any trading decisions, damages or other losses resulting directly or indirectly from the information.
⁴5-year computed NAV for Multi Cap Fund as of November 2025. Other funds are also available. Benchmark of this fund is S&P BSE 200.
⁵Market-linked returns are subject to market risks and terms & conditions of the product. The assumed rate of returns or illustrated amount may not be guaranteed and depends on market fluctuations
Linked Life Insurance products are different from traditional insurance products and are subject to risk factors.
The premium paid in Linked Life Insurance policies is subject to investment risks associated with capital markets and publicly available index. The NAV of the units may go up or down based on the performance of Fund and factors influencing the capital market/publicly available index and the insured is responsible for his/her decisions.
Tata AIA Life Insurance Company Limited is only the name of the Insurance Company & Tata AIA Smart Sampoorna Raksha Supreme, Tata AIA Smart SIP are only the names of the Unit Linked Life Insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns.
Please know the associated risks and the applicable charges, from your insurance agent or the Intermediary or policy document issued by the insurance company.
The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.
Past performance is not indicative of future performance.
If your policy offers variable benefits, then the illustrations on this page will show two different rates of assumed future investment returns. Currently the gross investment returns are stipulated as 4% p.a. and 8% p.a. These assumed rates of return are not guaranteed, and these are not the upper or lower limits of what you might get back, as the value of your policy is dependent on a number of factors including actual future investment performance.
For more details on risk factors, terms and conditions please read Sales Brochure carefully before concluding a sale. Insurance cover is available under this product.
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