Top ULIP Investment Trends to Watch in 2026

Written by : Knowledge Centre Team

2025-07-21

2775 Views

12 minutes read

Introducing BSE 500 Enhanced Value 50 Fund with Promise4Wealth

50 High-Potential Companies, One Smart Decision

Name is required Name should be Valid

Mobile Number is required Mobile Number should be Valid

Email is required Email should be Valid

DOB is required DOB should be Valid

Annual Income*

< 3 3-5 5-7 7-10 > 10

Annual Income is required

I agree that even if my contact number is registered with NDNC / NCPR, I would still want the Company to contact me on the given number and email id for the clarifications/product information sought by me and agree that I have read and understood the Privacy Policy and agree to abide by the same.

Please tick to proceed further.

Thank you for your interest in our product. Our financial expert will connect with you shortly to help you choose the best plan.

Whether you invest or not, you must have heard of Unit Linked Insurance Plans or ULIP. These unique investment-cum insurance products have come a long way in India. Before getting into trends and updates, let us have a look at what a ULIP actually is.

Key Takeaways

ULIPs offer dual benefits: a life insurance cover and market-linked investment.
Return of Mortality Charges (ROMC) ensures that mortality costs deducted during the policy term are refunded at maturity, improving returns.
Tax advantages include deductions under Section 80C and tax-free maturity under Section 10(10D), if specific conditions are met.
ULIPs offer high flexibility through fund switches, premium redirection, and partial withdrawals after the 5-year lock-in period

What is a ULIP?

In a ULIP, a part of the premium is utilised for a life cover, while the other part is invested in various market funds chosen as per your risk appetite and investment horizon. ULIPs are unique not just in their structure but also in terms of returns. On one hand, you have the security of a life cover, which will provide for a payout in the event of your death. At the same time, you can also grow your wealth with steady returns from your investments.

Trends in ULIPs

As an investment option, ULIPs have faced a rollercoaster of a journey. Here’s a look at the major ULIP trends from the past year.

1. ROMC ULIPs

One of the main concerns with ULIP investments earlier was that the life insurance cover would eat into one’s investment returns. This concern was addressed by insurers offering a return of mortality charges. Mortality charges are basically the charges that your insurer deducts for providing you the life cover. A lot of insurers have begun a practice wherein the total amounts of mortality charges deducted are added back to the fund value upon maturity.

What are mortality charges in ULIP?

2. Exemption from LTCG tax

In Budget 2018, a Long Term Capital Gains Tax was introduced on stocks and equity funds. ULIPs, being insurance tools, were spared from this tax only under specific conditions. The proceeds do not incur tax if the annual ULIP premiums are within Rupees 2,50,000 and satisfy Section 10(10D) of the Income Tax Act. This gave them an edge over mutual funds, ELSS, and a lot of other investment options. This, coupled with ROMC, only gave ULIPs an edge not just as tax-saving instruments, but also as investments offering good returns.

3. Income Tax Benefits

The tax benefits are available under Section 80C of the Income Tax Act. As per Section 80C, individuals get a maximum exemption of Rupees 1,50,000. Also, the maturity benefits are tax-free. The benefit is applicable if the death benefit is at least 10 times the annual premium. If the condition is not met, the tax benefits fall to 10% of the assured sum.

Get a Personalised ULIP Plan for Wealth Creation & Protection

Full Name* Please enter correct name Please enter the Full name

Mobile Number* Please enter valid mobile number Please enter Mobile Number

Email* Please enter valid email Please enter Email

...Read more Consent is required

4 Reasons to Invest in ULIPs

ULIPs are more flexible and more promising. Especially if you are a new investor, they can be a great place to begin with the right balance of potential returns and safety of investments.

A ULIP offers you the best of both worlds- investment and insurance. It eliminates the need for handling two different instruments at once.
It is very easy to switch and redirect your investments with a ULIP. You can switch them almost anytime you feel like your chosen fund is not performing well or is too risky or too safe.
Although ULIP investments are ideally long-term investments, you can exercise partial withdrawals when you are in urgent need of funds. This only adds to the flexibility of ULIPs.
They are great for long term financial goals like education, buying a house, marriage, etc.

Did You Know?

Starting April 1, 2026, any ULIP policy with annual premiums over ₹2.5 lakh will be subject to tax on the returns earned.

Source: Upstox

Conclusion

ULIPs have evolved. What once seemed like a complex, charge-heavy product is now a streamlined, investor-friendly option. It offers protection, returns, and tax savings under one umbrella. ULIPs give you the flexibility to switch funds, enjoy long-term growth, and stay protected. So, if you are aiming for long-term goals like your child’s education or a dream home, it might be time to give ULIPs a serious look.

Glossary

Market Sentiment: The overall mood or tone of investors in the market, driven by news or emotions, influences buying and selling.
ULIP Schemes: A financial product combining life insurance and market-linked investments with tax benefits.
Portfolio: A mix of financial assets like stocks, bonds, and funds owned by an individual to grow wealth or manage risk.
Equity: An ownership share in a company, often purchased as stocks, offering growth potential but with higher market risk.
Debt Funds: Investments primarily in fixed-income securities like government or corporate bonds, ideal for stable, low-risk returns.

FAQs

The fund value of ULIP refers to the total premium value invested in various funds. The formula to calculate it is as follows:

Fund Value = Total Number of units under a policy x Net Asset Value

Since ULIP has a 5-year lock-in period, you are eligible for a tax deduction on the premium only if you have paid it for 5 consecutive years.

Yes! According to Section 112A of the Income Tax Act, if you hold a ULIP with a premium of less than ₹2.5 lakhs for more than a year, you will have to pay 12.5% tax on the profits during withdrawal. This will come under the head Income from Capital Gains. However, you can get an exemption of up to ₹1.25 lakhs annually under Long Term Capital Gains.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

What Makes a Retirement Plan the Best Option?

ULIP Tax Benefits Explained: Save Tax Under 80C

What Is the Structure of a ULIP? Clearly Explained.

ULIP Structure Explained: Funds, Charges & How It Works

Recent Blogs

When Is the Right Time to Invest in ULIPs?

30 July '26

903 Views

8 minute read

When is the right time to invest in ULIP? Learn how timing, goals, and market conditions impact returns and why starting early can maximise long-term benefits.

Ulip

10 ULIP Charges Explained: Allocation, FMC & Hidden Costs

30 July '26

1021 Views

6 minute read

Learn about ULIP charges including allocation, fund management & policy fees. Know how costs impact your returns.

Ulip

What Is Panic Selling In Market Downturns Thum Desktop

What Is Panic Selling? Meaning, Impact & How to Avoid It

30 July '26

1265 Views

11 minute read

What is panic selling? Learn its meaning, why investors panic during market crashes, its impact on returns & how to avoid costly mistakes.

Ulip

Benefits of Buying Online ULIPs Over Offline Plans

29 July '26

4898 Views

9 minute read

Learn why buying ULIPs online can be better than offline, including lower costs, easy comparison, transparency, faster processing and greater convenience.

Ulip

ULIP Partial Withdrawal After 5 Years: Rules, Tax & Limits

29 July '26

3922 Views

6 minute read

Not every ULIP policyholder knows the rules around partial withdrawals. A clear breakdown of how it works, withdrawal limits & tax impact in India today.

Ulip

What Is SIP? Benefits, Features & SIP vs ULIP Comparison

29 July '26

3899 Views

10 minute read

Understand what SIP is, its advantages, and how it compares to ULIPs for long-term investment and wealth creation.

Ulip

ULIP Withdrawal After 5 Years: Rules, Limits & How It Works

29 July '26

2116 Views

6 minute read

ULIP withdrawals come with specific rules & conditions. Learn how withdrawals work, lock-in periods, and tax implications in India to manage your funds effectively and avoid penalties.

Ulip

What Are Market-Linked Returns in ULIPs? Meaning & Growth

29 July '26

1275 Views

5 minute read

What are market-linked returns in ULIP? Learn how investment performance impacts returns and how you can benefit from long-term growth.

Ulip

Plan Long-Term Financial Goals with a ULIP Investment Plan

29 July '26

901 Views

Learn how a ULIP investment plan helps plan long-term financial goals through disciplined investing, market-linked growth, flexibility and life cover.

Ulip

Unit Linked Insurance Plans - Top Selling Plans

Canara HSBC Life Insurance offers online ULIP plans that blend life insurance protection with investment growth, helping you build wealth while securing your family's future.

Wealth Today, Protection Always

Promise4Growth Plus

Life Cover up to 100 Years
13 Fund Options
Fund Switching Option
Waiver Of Premium

Secure Your Future with Confidence

SecureInvest

Life Cover up to 100× Annual Premium
12 Fund Choices
Automated Portfolio Strategies
Maturity Booster

Invest Smart, Live Smart

Wealth Edge:

Flexible Premium Options
Multiple Fund Allocations
Systematic Withdrawals
Premium Waiver Benefit

Popular Searches

New Fund Launched with Promise4Wealth

Reinstate Your Lapsed Policy

Mandatory KYC Update as per PML Rules 2005

We Stand with Families Affected by the Ahemdabad Plane Crash