Which is better: ULIP or Mutual Fund?

Mutual funds offer higher flexibility and lower costs. ULIPs are suitable only for long-term investors (10+ years) who value the bundled insurance and tax-free switching between funds.

Is ULIP tax free in 2026?

Yes, maturity proceeds are tax-free under Section 10(10D) if the total annual premium across all ULIPs is ₹2.5 Lakh or less. For higher premiums, they are taxed like equity mutual funds.

What are the hidden charges in ULIP?

ULIPs typically include Premium Allocation Charges, Policy Administration Charges, Fund Management Charges (capped at 1.35%), and Mortality Charges based on age.

ULIP vs Mutual Fund Comparator

Compare ULIPs with Mutual Funds after accounting for all charges, taxes, and insurance costs.

Quick Summary: ULIP vs Mutual Fund Comparator

ULIPs offer a tax-free maturity under Section 10(10D) if the annual premium is below ₹2.5 Lakh. However, they carry premium allocation and mortality charges. Mutual Funds (plus a term plan) often outperform ULIPs due to lower costs, despite the 12.5% LTCG tax on equity gains over ₹1.25 Lakh.

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Regulatory Disclaimer

Last verified May 2026

Statutory Disclosure

Nature:Calculator platform and is NOT a SEBI-registered Investment Adviser. All calculations are indicative.

Risk:"Investments in securities market are subject to market risks. Read all related documents carefully before investing."

Consult a SEBI-registered IA or CA for personalised advice.

9 out of 10 traders in F&O incurred net losses (SEBI 2023). Tax estimates based on IT Act 2025. Trezoriq is not liable for financial decisions based on results.