Strategies for Managing Mortality Charges in ULIPs: Maximizing Returns while Minimizing Costs

Are you looking to make the most out of Unit Linked Insurance plans? ULIP is a popular investment option in insurance plans that offers the dual benefits of investment plan and insurance coverage. However, one aspect which is crucial and worries some of the investors is mortality charges. These charges are deducted for covering life insurance but it might take away your investment gains if not managed properly. In this blog we will explore some simple and effective strategies for managing mortality charges in ULIP, this helps in maximising the investment and minimises the cost.

Strategies for Managing Mortality Charges in ULIPs
Strategies for Managing Mortality Charges in ULIPs

Strategies for managing mortality charges in ULIP

  • Understanding mortality charges

Before discussing strategies it’s important to understand what mortality charges are? These charges are associated with providing life insurance coverage in the ULIP plan. The charges are different and based on the factors like age, sum assured, and policy terms. It is important to note down that the younger you are the lesser your mortality charges in ULIP.

  • Choose a long term policy terms

One way to manage the mortality charges is to choose a policy which is for a longer term. Longers generally have lower mortality charges, as the risk is spread over the time period of the policy period. While, the short term insurance might have quick returns, but often comes with higher mortality charges, that impacts the overall returns.

  • Choose a sufficient sum assured levels

Sum assured plays an important role in calculating the mortality charges. It is the amount which your beneficiaries will receive if anything unexpected happens to you. It is also important to have sufficient coverage, choosing an insurance plan with a high sum assured level can inflate higher mortality charges. Gather your financial needs and choose a sum assured amount that is sufficient with any higher charges.

  • Regularly review and adjust investment allocation

ULIPS offer flexibility of choosing between various investment funds, like equity, debt, or balanced funds. The allocation of these funds affects the mortality charges indirectly. For example, equity funds have higher potential returns as compared to other types of investments and they also have higher risks associated with them. Regularly review your investment allocations, and adjust them based on your risk appetite, investment horizon, and the current market conditions. By optimising the investment, you can offset the mortality charges on your returns.

  • Consider partial withdrawals wisely

In ULIPs you can withdraw partially after a specific lock-in period. While it might feel tempting to withdraw funds whenever the need arises, keep in mind only one thing: withdrawals might affect the sum assured amount and the mortality charges also. Calculate the implications of partial withdrawals on the overall policy and consider alternative sources of funds before tapping into ULIP.


It is important to manage mortality charges for maximising the results on the ULIPs fund. By choosing an appropriate ULIP plan with longer policy terms, choosing appropriate sum assured levels, regularly reviewing and adjusting the investment allocation, and considering partial withdrawals wisely, you can choose a balance between life insurance coverage and investment growth. Remember, ULIPs are long-term instruments, and prudent management can go a long way in achieving your financial goals. Always consult with a financial advisor to tailor strategies that align with your specific needs and circumstances. With the right approach, you can make your ULIP investment work harder for you while safeguarding your financial future.

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