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This can be understood easily with the help of an example.
November 03, 2025
Let us take a ULIP launched by ABC Life. This is how its NAV is typically calculated.
ABC Life ULIP has total holdings as on date of Rs 11 lakhs
Less: Related Expenses Rs. 1 lakh
Net Asset Value Rs. 10 lakhs
No. of units Rs. 1 lakh
NAV per unit Rs. 10
There is some misconception with regards the NAV. Investors perceive a higher NAV as being 'expensive' and may choose to give the investment a miss. They may settle for an investment with a lower NAV because it's 'inexpensive'.
As we have seen the NAV is merely the book value of the ULIP/ mutual fund's investments minus expenses. It is not inflated nor is it misrepresentative. It represents the fair price of its assets should the mutual fund liquidate all its investments on that day. Investors need not be concerned about the price being too high or low. Therefore, a higher or lower NAV holds no significance and should not be the basis for identifying the right ULIP / mutual fund.
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Francis Rodrigues
Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.
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In unit linked policies, the investment risk in the investment portfolio is borne by the policyholder. The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender/withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year.
Life Insurance Coverage is available in this product. The unit linked insurance products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender/withdraw the monies invested in unit linked insurance products completely or partially till the end of fifth year. Unit Linked Funds are subject to market risks and there is no assurance or guarantee that the objective of the investment fund will be achieved. The premium shall be adjusted on the due date even if it has been received on advance.
Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. The name of the company, name of the brand and name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your insurance agent or the intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.
** The returns mentioned is the 5-year benchmark return percentage of NIFTY India Consumption Index data as of 31st Oct, 2025, and is not indicative returns of India Consumption Advantage Fund (ULIF08421/11/25InCnsmAdFd101)
18. Save 46,800 on taxes if the insurance premium amount is Rs.1.5 lakh per annum and you are a Regular Individual, Fall under 30% income tax slab having taxable income less than Rs. 50 lakh and Opt for Old tax regime.
