Claim Settlement Ratio of 99.02%~


  • World's First Music Video Created Retired Senior Citizens

  • Apne life goals ki guaranteed1 hona Ye Bhi Sahi Hai

  • Fulfill your Life Goals with Bajaj Allianz Life Goal Assure

  • Here's a Comprehensive Tool To Plan Your Child's Future

  • There is lot to remember in Life, Set renewal premium payments to Auto Pay

  • Get Life Cover worth Rs.1 Crore at Rs.20 per day2 – Bajaj Allianz Life Smart Protect Goal

  • Get your Life Goals Done with Bajaj Allianz Life Smart Assist – BINA MILEY MIL-KAR

  • Paying your Renewal Premium is Quick and Easy!

  • Know the right amount of Insurance you need in just a few steps!

  • Avail Term Insurance Tax Benefits under Section 80D

  • Know how to invest money during the covid-19 pandemic!


Thanks for sharing your details, A Sales representative from
Bajaj Allianz Life will contact you shortly.

Dear Customer, we request you to connect with us in our next business working hours, (Monday to Saturday 24*6) Thank you, Have a great day ahead


Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business


Please refer to BALIC Privacy Policy

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

Strong Long Term Fund Performance Track Record**

One Of The Most Trusted Brands#

How To Invest Money

Tax Benefits~ On Online ULIP Plans

Please enter a Name
Please enter a Mobile No.
Please check the box to proceed
WS_LIGuideHome_Banner_EN 307 38983691 WS_LIGuideHome_Banner_HI 307 38983695
WS_LIGuideHome_Banner_Mob_EN 307 38983693 WS_LIGuideHome_Banner_Mob_HI 307 38983677
Please Select Language

**, #, T&C Apply | BJAZ-WB-EC-02755/21

**, #, T&C Apply | BJAZ-WB-EC-02755/21

How To Invest Money With ULIPs


April 23, 2020

By : Bajaj Allianz Life

Over the years, unit linked insurance plans (ULIPs) have evolved as one of the effective and popular protection, investment and tax-saving products for Indian investors. After numerous changes and multiple upgrades, today’s New Age ULIPs are one of the preferred wealth generation tools available in India.

Whether it’s building your start-up, buying a house, going for a foreign holiday or saving for retirement, ULIPs allow you to customize your investment plan according to your life goals, investment horizon and risk appetite.

Another unique benefit of ULIP investment is that investors have the choice to select ULIP funds on their own and decide how the portfolio performs. Using techniques such as switching and premium redirection, they can effectively optimize ULIP returns and reach their life goals with ease.

In this article, you will get some tips on how to invest money in ULIPs to get optimum returns and learn about important details such as:

  • How is the premium invested in multiple funds?
  • How NAV is calculated and fund value is generated?
  • Tax benefits of ULIP investment.

You can always leave the fund switching work to the ULIP’s fund manager, in case you are not comfortable with it. You can also consult a subject matter expert who can help you with the same.


Where does my ULIP premium go?


When you invest in a ULIP plan, the premiums you pay are invested in variety of funds opted by you as available within the respective product after relevant deductions have been made. These ULIP plans also provide you with a Life Cover Let’s understand this with an example.

Assume that you are paying a monthly ULIP premium of Rs. 100. Out of this Rs. 100, Rs. 5 is deducted as ULIP charges and Rs. 35 is invested for insurance cover. The remaining Rs. 60 (Rs. 100 – (5 + 35) = Rs. 60) is invested on various funds as selected by the investor. When this amount is pooled together from all other investors, it is called a Unit Fund.

Typically, insurance companies provide investors with the option to choose from funds available with the product or from investment strategies wherein few strategies allow investors to manage his/her own funds or let the insurer manages funds as per the needs of the investor.


What is NAV and how is it calculated?


The Net Asset Value or NAV of a fund is the price per unit of a fund. ULIP NAV of a fund is dependent on the performance of the debt and equity markets. ULIP returns or fund value is calculated on the basis of NAV of the ULIP fund. According to IRDAI, it’s mandatory for fund houses to declare the net asset value (NAV) of a fund on a daily basis.

NAV of a ULIP plan is calculated by deducting total debt of the fund from total assets and dividing it by the number of outstanding units.

The formula is: Net Asset Value (NAV) = (Assets – Liabilities) / (Number of Outstanding units)

Let’s illustrate this with an example.

Assume that the total value of assets for a ABC fund is 50 Crores and is divided into 2 Crore units/ shares so that retail investors can invest in the fund. There are various operational costs of ABC funds such as administration charges, fund allocation charges, management fees, insurance claims etc. These are the liabilities of the fund. Assume this liability or costs amount to Rs. 2 crores per annum. In this case, NAV of the ULIP fund will be calculated as follows.

NAV of ABC ULIP plan = (Rs. 50 – 2 Crores) / Rs. 2 Crores = Rs. 48 crore/ 2 crores = Rs. 24

In this case, the NAV of ABC ULIP fund is Rs. 24 as on date of calculation


How is ULIP fund value calculated?


Before we explain how fund value is calculated, it’s important to understand that the value of a ULIP fund fluctuates with time depending on prevailing market conditions. It’s important to understand how fund value is calculated when you invest in ULIPs since total fund value is what you receive on the maturity of the ULIP plan.

Fund value of a ULIP can be easily calculated by multiplying the NAV on the particular day by the number of units in your account. For example, if you hold 1,000 units of a particular fund and the prevailing NAV on that day is Rs. 18, the fund value of your ULIP plan is Rs. 18,000 (1000 x 18). As the NAV fluctuates, so does the fund value.


Tax benefits of ULIP investment


Apart from being one of the preferred investment instruments to generate wealth and achieve your life goals, they offer a very effective method to save taxes. Some of these benefits include:

  • Section 80C deductions: Premiums paid are eligible for tax deductions up to Rs. 1.5 lakh per annum under Section 80C of the Income Tax Act 1961, subject to provisions stated therein.
  • Tax exemption on maturity benefit: ULIP tax benefits are offered on maturity too. The maturity amount plus any bonus amount is tax free according to section 10 (10D) of the Income Tax Act 1961. Here too the conditions are similar to those for availing tax deductions u/s 80C. For ULIP plans purchased after April 1, 2012, the annual premium should be less than or equal to 10 per cent of the sum assured for the entire term. For ULIP plans purchased before April 1, 2012, the annual premium should be less than or equal to 20 per cent of the sum assured for the entire term. In case there is a payout due to demise of the policy holder during the policy period, the death benefit is tax free too.
  • Capital gains tax: Union Budget 2018 introduced the Long Term Capital Gains (LTCG) tax under which LTCG of over Rs 1 lakh in equity investments and equity mutual funds will be taxable at 10 per cent, without indexation benefits. ULIP plans allow you to invest in equity funds, but do not attract LTCG tax. New age ULIPs are convenient, transparent, value-packed and reliable investment products to help you achieve your life goals. If you dream of your own start-up in the future or a world tour to fascinating destinations or want to live a comfortable retirement life, new age ULIPs can be customized according to your life goals, investment horizon and risk appetite. Take a step towards your life goals today.

Bajaj Allianz Life Videos


Bajaj Allianz Life | Children's Day

Contact Us

Bajaj Allianz Life Insurance Company Ltd.

Bajaj Allianz House, Airport Road, Yerawada, Pune - 411 006, Maharashtra

Tel No: 020-66026773

Fax No: 020-66026789

Branch Visit Timings:

Monday to Friday - 9:00 AM to 3:30 PM

Saturday - 9:00 AM to 1:00 PM

Customer Care Helpline:


Monday to Sunday: 9:00 AM to 7:00 PM (IST)

NRI Services Helpline

24/7 (All week days)

Sales Enquiry Helpline:


Monday to Saturday: 9:00 AM to 7:00 PM (IST)

For NRI: +91-20-35125850 (Call charges apply)

Monday to Saturday: 9:00 AM to 7:00 PM (IST)

Find Us Online

#Survey conducted by brand equity – Nielsen in March 2020

~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

**Past performance is not indicative of future performance.

The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information.