I am planning to invest for 10 years. Is a ULIP a good option for this time horizon, or should I consider other alternatives?
ULIPs are often marketed as long-term investment products, combining insurance with market-linked returns. But when looking at a 10-year investment horizon, many investors wonder if ULIPs can actually deliver competitive returns after charges while also serving as an insurance cover. A closer look at real experiences can help understand whether ULIPs suit a 10-year goal.
credits : ULIP Returns in 10 Years – Know the Key Factors
ULIP for 10 year period :
How ULIP Returns Performed Over 10 Years in 2025
My colleague had invested in a ULIP a decade ago and completed the 10-year term in 2025. He noticed that in the first few years, a significant portion of his premium went towards policy administration and mortality charges. However, as the years went by, the impact of these charges reduced, and the returns started to stabilize. At the end of 10 years, his ULIP generated moderate returns, but slightly lower compared to mutual funds invested for the same period.
Liquidity Concerns with ULIP During a 10-Year Period
A friend who had invested in a ULIP faced challenges when he needed money midway, as the product had a strict 5-year lock-in period. Even after the lock-in, partial withdrawals were limited and came with conditions. This made the investment less liquid compared to mutual funds or other options, which allow easier redemption. For someone targeting a 10-year horizon, the limited flexibility became a drawback.
Insurance and Investment Mix in a 10-Year ULIP Plan
The insurance component in ULIP reduced the actual investment value over the years. I felt that while the dual benefit of protection and investment looked attractive at first, for a pure 10-year wealth-building plan, a separate term insurance plus mutual fund combination might have been more cost-effective.
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