How to Track the Performance of a ULIP


ULIP has been one of the popular instruments which provide dual benefits of investments

and insurance. The policyholder has the opportunity of investing in different funds to

increase their wealth and get life insurance cover for their loved ones. Usually, when you

invest in a ULIP plan, a fund manager overlooks the policy and makes decisions on your

behalf. However, you have the option of managing the fund by yourself. If you do opt to

manage the policy by yourself, here is how you can track the ULIP performance.

Keep an eye on the market

How do stock market investors manage to stay in profit despite all the fluctuations? They

always follow the market movements. Staying up to date with the constant market

movement provides them with an opportunity to maximise their profits at the right

moment. Similarly, when you manage your ULIP policy, it is essential that you keep an eye

on how the market is, as it impacts your investment. This in turn will impact your returns as


Switch the funds

In a ULIP, investments are made in two types of funds: equity and debt. In equity funds,

investment is made in stocks of companies that are market listed. They are high-risk, high-

return funds. In debt funds, investment is made in government funds and securities,

corporate funds, liquid and cash markets. They are low-risk, low-medium-return funds. One

of the ULIP benefits is that you can switch your investments between funds. If you have

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invested more in equity than debt, you can reallocate more towards debt with the help of

switching. This would help you in getting steady returns without high risk factor. Similarly, if

your risk appetite is high, you can switch your investments to equity funds.

Select the correct funds

As mentioned above, your ULIP policy offers you investment in equity and debt funds.

Based on your risk appetite, you can opt for either fund. However, it is imperative for you to

know which fund would be most suitable. If you have a higher risk appetite and want to gain

great returns in a shorter duration, you can go for equity funds. They offer high returns;

however, the risk exposure of these funds is very high. This could impact your investment

and your returns.

Your other option is investing in a debt fund. If you have a low-risk appetite and want steady

returns for a long duration, debt funds are the best option. This fund has a low-risk factor,

which means less exposure to risk. This safeguards your investment and returns. You have

the option to invest in both the funds at the same time. This will ensure you get good

returns without much risk exposure. Do keep in mind to invest in funds that match your life


Complete the lock-in period

The ULIP plan has a lock-in period of 5 years. Most of the insurers require you to pay

premiums for the policy during this lock-in period. In the initial period of the premium

payment, your insurer will levy charges for the policy; these will be deducted from your

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premium. Once you complete the lock-in period, you are eligible for partial withdrawals

from your funds. These withdrawals are done for immediate expenses or to fulfil life goals of

the policyholder.

However, it is always advised not to surrender your ULIP before the end of the lock-in

period. This is because if you surrender the policy before or during the lock-in period ends,

you will not get the sum assured or returns on your investment. Even if you pay premiums

on time and surrender it during lock-in period, you will not be able to access your funds

before the period ends. You will not be able to make partial withdrawal during the lock-in

period as well. Once the period ends, partial withdrawals are charged by the insurer. Also,

the amount withdrawn is restored to your sum assured after a certain period.

When you decide on managing your ULIP plan by yourself, these are a few things that can

help you track the performance of your ULIP efficiently. To know more about such factors

and other ULIP benefits, you can get in touch with your insurance advisor.

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