What is NAV in ULIPs?

Name: What is NAV in ULIPs?
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Unit Linked Insurance Plan (ULIP) invest in various market-linked instruments, such as equity, debt, or hybrid funds apart from providing life cover. Each fund unit has a specific price, called the Net Asset Value (NAV). The NAV reflects the current market value of all assets less all fund liabilities divided by the total number of fund units outstanding. So, knowledge of ULIP NAV is essential for anyone planning to make ULIP investments. show less ...Read More

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Written bySumit Narula

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Published 15th June 2026

Reviewed byPrateek Pandey

Last Modified 15th June 2026

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Key Terms: NAV vs Fund Value vs Sum Assured

The Net Asset Value in the ULIP plan includes certain terminologies that help an individual invest more efficiently. Check out the essential terms you should know before investing in a ULIP:

Term	Definition	Example
ULIP NAV	It refers to the per-unit value of the ULIP fund at a given point in time.	₹25 per unit
Units Held	It refers to the total ULIP fund units credited to your ULIP policy since the beginning.	2,000 units
Fund Value	It refers to the total units held × current NAV, reflecting your total corpus today.	2,000 units × ₹40 per unit = ₹80,000
Sum Assured	It refers to the life cover amount payable to the nominee in case of the insured’s demise. which is independent of the NAV	₹5 lakh
Death Benefit	It refers to the benefit paid to the nominee as per the ULIP’s policy terms. Depending on the plan structure, it may be the sum assured plus the fund value, or the higher of the sum assured and the fund value.	Depends on the policy structure: in a “higher of” structure, the death benefit may be ₹5 lakh; in a “sum assured plus fund value” structure, it may be ₹5.8 lakh.

How is ULIP NAV Calculated? Formula & Worked Example

Understanding the procedure to calculate the ULIP NAV will help you track your investment performance. The NAV reflects the per-unit value of the fund held by your ULIP plan , including the assets, income, expenses, and charges.

ULIP NAV Formula

ULIP NAV can be calculated easily using the given formula:
NAV = (Market Value of Fund Investments + Accrued Income + Other Current Assets − Current
Liabilities − Fund Management Charges) ÷ Total Number of Outstanding Units

In the NAV formula, the different components reflect the following meaning:

Formula Component	What it Includes
Market Value of Fund Investments	Closing price of all stocks, bonds, and government securities held by the fund on the specific trading day.
Accrued Income	Dividends received and interest earned but not yet distributed.
Other Current Assets	Cash, cash equivalents, and receivables.
Current Liabilities	Payables, pending expenses, and brokerage on recent trades
Fund Management Charges (FMC)	Deducted daily before NAV computation at the rate of ≤1.35% p.a. for equity funds, as per norms specified by the IRDAI to manage the fund performance across different assets.
Total Outstanding Units	Total units held by all investors in the fund.

Worked Example: Step-by-Step NAV Calculation

Let us understand the ULIP NAV formula with a step-by-step calculation procedure:

Scenario:

Component	Value
Market Value of Portfolio (Equity + Bonds)	₹10 crore
Accrued Income (Dividends + Interest)	₹5 lakh
Other Current Assets	₹2 lakh
Current Liabilities	₹1 lakh
Fund Management Charges	₹50,000

The steps involved to calculate the NAV in the above scenario are:

Step 1: Calculate Net Assets

Step 2: Divide Net Assets by Total Units

Step 3: Calculate NAV

Note: The fund management charges are deducted before the NAV calculation. It means that the NAV calculated includes the FMC deductions, and there is no separate FMC deduction at redemption or maturity of the ULIP policy. Therefore, the ULIP NAV reflects the overall fund performance.

How NAV Determines Your ULIP Units and Fund Value?

From the ULIP premium received, the insurance provider deducts applicable fund charges, such as the premium allocation charge and mortality charge. The remaining portion of the premium is divided by the Net Asset Value (NAV) on the allotment date to determine the total units credited to your ULIP policy.

Hence,

Units Allotted = (Premium Amount less applicable charges) ÷ NAV on Allotment Date

So, when ULIP NAV is high fewer units are purchased, while more units are purchased when NAV is low. You can easily use a free online ULIP calculator to determine how changes in NAV affect purchase of fund units.

Premium-to-Units: Step-by-Step Illustration

Let us understand the allocation of units from the premium paid by the investor with the following example:

Step	Calculation	Amount
Annual Premium Payment	As Entered by the Insured	₹1 lakh
Deduct Premium Allocation Charge (2%)	₹1,00,000 × 2% = ₹2,000	−₹2,000
Deduct Mortality Charge	Depends on the Age, Policy Year, and Sum Assured	−₹800
Net Investible Premium	₹1,00,000 − ₹2,000 − ₹800	₹97,200
NAV on Allotment Date	Current NAV of the Chosen Fund	₹25.00 per unit
Units Allotted	₹97,200 ÷ ₹25.00	3,888 units
Fund Value (after 2 years, NAV = ₹32)	3,888 × ₹32	₹1,24,416

Note: The above example is illustrative and has been simplified. In real world scenarios, applicable charges will vary from one ULIP policy to another.

The above illustration shows that a higher NAV on redemption increases the total fund value over time, even if the number of units remains constant.

Axis Max Life’s Smart Wealth Plan offers zero premium allocation charge. It means that your entire premium (after mortality charges) gets invested, resulting in more units being allocated and helping maximise your long-term fund value.

What Affects ULIP NAV? Key Drivers

The ULIP NAV changes every day when markets are open. This is because the ULIP portfolio assets change in value every day the markets are open. It is essential to understand these factors to track your investment plans fund performance over time.

Check out the main factors affecting the ULIP NAV:

Factor	Impact on NAV	Direction
Stock Market Movement (Equity Funds)	If the Nifty/Sensex rises, the equity fund NAV rises in proportion. Moreover, it falls when markets decline.	Fluctuate up or down with the market.
Bond or Government Securities Price Movement (Debt Funds)	Rising interest rates lead to falling bond prices, thereby reducing the NAV. On the other hand, falling interest rates lead to an increase in NAV.	Inversely Proportional to the Interest Rates
Dividends Received by Fund	The total dividend income earned by the fund is added to the total assets, thereby increasing the NAV.	Upward Pressure
Fund Management Charge (FMC)	It is charged daily before the NAV calculation, slightly reducing the overall fund value over the long-term investment.	Slight Downward Drag Daily
New Premiums or Unit Redemptions	New investments or withdrawals change the number of units, but the total assets adjust proportionally.	NAV Remains Unchanged
Market Holidays or Non-Trading Days	NAV is not calculated or declared on weekends and public holidays.	No NAV Declaration on Non-Trading Days

High NAV vs Low NAV: The Most Common ULIP Myth — Debunked

Usually, first-time investors assume that a high NAV means that the fund is costly, while a low NAV means an affordable fund. However, this is one of the biggest misconceptions held by investors in ULIP.

The Myth: 'Low NAV = Cheaper ULIP Fund'

Let us debunk this myth by understanding the NAV effect on two funds with different NAVs, where one may be an older fund and the other may be a newer fund.

Here is a detailed analysis of both funds:

Particulars	Fund A (Mature Fund)	Fund B (New Fund)
Current NAV	₹80 per unit	₹12 per unit
Investment Amount	₹1 lakh	₹1 lakh
Units Alloted	1,250	8,333

Now, let us assume that both funds grow at 15% in one year as follows:

Outcome	Fund A	Fund B
New NAV	₹92	₹13.80
Investment Value	₹1,15,000	₹1,15,000
Profit Earned	₹15,000 (15%)	₹15,000 (15%)

The above example shows that even though Fund A has a much higher NAV than Fund B, both delivered the same return because the final investment value depends on the growth rate, not the NAV level alone. It happens because the number of units received by the investor adjusts automatically, making your final worth depend on the growth rate, not NAV.

NAV is simply the per-unit value of the fund, not a measure of affordability or future performance. In simple terms, a high NAV may reflect the fund’s age and past movement, but it does not automatically mean the fund is better. A low NAV may simply mean the fund is newer. Fund selection should be based on performance consistency, benchmark comparison, risk profile, and suitability.

Thus, while choosing a ULIP fund, you must focus on consistent historical returns, fund management, and long-term growth potential, rather than just chasing the NAV. One way to do this is using an investment calculator to determine which ULIP fund and plan suits your unique needs.

What You Should Compare When Evaluating ULIP Funds?

Choosing the ULIP fund based on your financial preferences requires a careful evaluation of the following factors to make an informed decision:

CAGR (Compound Annual Growth Rate): You must check the returns over 1,3, 5, and 10 years to analyse the fund’s consistency.
Benchmark Comparison: Analyse the fund’s performance in relation to its benchmark index, such as Nifty 50 or BSE Sensex. A fund outperforming its benchmark reflects strong fund management.
Fund Manager’s Track Record: Check the various factors related to the track record of the fund manager, such as experience, past performance, and investment philosophy.
Volatility (Standard Deviation): It reflects the fluctuations experienced by the NAV. Lower fluctuations reflect the stable performance of the fund.
Sharpe Ratio: Measures the risk-adjusted returns. A higher value indicates better returns for the level of risk taken.
Expense Ratio or FMC: A lower expense ratio and FMC help you improve the overall returns over time, particularly in long-term investments.

Axis Max Life publishes historical NAV data and detailed performance reports for all ULIP funds. You can view live NAVs and compare the performance of equity, balanced, and debt funds on the Axis Max Life website to make an informed decision when choosing a ULIP plan. This in fact holds true for all market-linked investment plans, not just ULIP funds offered by Life Insurance Companies in India.

ULIP NAV vs Mutual Fund NAV: Key Differences

The Net Asset Value in the ULIP plan and mutual fund represent the per-unit value of investment. However, they differ significantly across several parameters:

Features	ULIP NAV	Mutual Fund NAV
Regulatory Body	Insurance Regulatory and Development Authority of India (Insurance Regulator)	Securities and Exchange Board of India (Securities Regulator)
Declaration Frequency	Daily on Working Days	Daily on Working Days
Where to Find NAV	Insurer’s Website or Consumer Portal	AMFI Website and Fund House Website
Life Cover Cost	Mortality Charge is Deducted Separately	No Life Cover is Applicable in Mutual Funds
FMC or Expense Ratio	FMC ≤ 1.35% p.a. (IRDAI cap, equity funds)	TER: 0.5–2.25% (SEBI regulated, varies by category)
Cut-Off Time for NAV	3:00 PM (same-day NAV for premiums received before)	3:00 PM (same-day NAV for applications before cut-off)
Tax on Redemption	May be tax-free under Section 10(10D), subject to applicable conditions. For ULIPs issued on or after 1 February 2021, the exemption may not apply if the aggregate annual premium across such ULIPs exceeds ₹2.5 lakh.	LTCG at 12.5% or STCG at 20% on Equity Funds as per Budget 2024
Can You Switch Funds Tax-Free?	Yes, switching funds in the ULIP plan has zero tax.	No, switching between mutual funds triggers capital gains tax.
Lock-in Period	Mandatory 5-year lock-in Period	Open-ended: No lock-in (except ELSS for 3 years)

NAV Allotment Date & Cut-off Time Rules

Many new investors in the ULIP plan get confused about the day of NAV applicability, particularly while paying premiums online or offline. Here is a simple analysis to make you understand the exact working of the allotment date and cut-off times:

Transaction Type	Received By Insurer Before 3:00 PM	Received after 3:00 PM / on a holiday
New Premium (Online)	Same day's closing NAV applied	Next business day's NAV applied
New Premium (Offline/Branch)	Same day's closing NAV (if cheque cleared)	Next business day's NAV is applied
Fund Switch Request	Same day's NAV for both buy and sell	Next business day's NAV is applied
Partial Withdrawal Request	Same day's NAV (units redeemed at today's price)	Next business day's NAV is applied
Surrender / Maturity	As per policy terms and processing timeline	NAV on date of processing

Understanding these timelines will help the investors pay a premium at the correct time.For NAV applicability, the key point is whether the valid transaction is received before the cut-off time. Paying before the cut-off may allow same-day closing NAV, but it does not guarantee a lower NAV because the closing NAV is known only after market movement is reflected.

Moreover, payments made after 3:00 PM or on non-business days will be processed using the next business day’s NAV. This means that if you want to make purchases on dips, you need to make ULIP investments before the cutoff time for the specific day.

How to Check Your ULIP NAV?

ULIP NAVs are published by individual insurance providers. You can follow the given steps to check your Axis Max Life ULIP NAV:

Method	Steps	Frequency
Insurer Website	Visit the Axis Max Life official website → Go to Fund Performance / NAV section	Daily (post market close)
Customer Portal or Application	Log in to the Axis Max Life customer portal → My Policy → Fund Value	Daily
SMS or WhatsApp	Send your policy number via registered SMS/WhatsApp to the insurer’s number.	On Demand
Annual Statement	Insurer shares annual fund account statement with NAV history.	Annually
Customer Care	Call Axis Max Life toll-free number to get the required details.	Business Hours

Axis Max Life ULIP Fund Options

Currently Axis Max Life offers a number of equity, debt and hybrid funds to policyholders. These funds are only available through applicable ULIP offerings and can cater to risk appetite and financial needs of a wide variety of individuals. Some popular ULIP Funds currently by Axis Max Life to its policyholders include:

Axis Max Life UL Life High Growth Fund
Axis Max Life UL Life Diversified Equity Fund
Axis Max Life UL Life Growth Super Fund
Axis Max Life Nifty Smallcap Quality Index Fund
Axis Max Life Midcap Momentum Index Fund
Axis Max Life Smart Innovation Fund
Axis Max Life India Consumption Opportunities Fund

To check the complete list and view updated NAV of each fund, please click here.

Frequently Asked Questions

What is ULIP NAV?

ULIP NAV (Net Asset Value) refers to the per-unit market value of a ULIP fund on any given business day. The formula used to calculate NAV looks like this:

NAV = (Total Market Value of Fund Assets + Accrued Income − Liabilities − Fund Management Charges) ÷ Total Outstanding Units

Your overall ULIP fund value is derived by multiplying the number of units you hold by the current NAV. Insurers are required to declare NAV at the end of each day when the market is open. This transparency in tracking the performance of your investment over time.

How is NAV calculated in ULIP?

NAV in a ULIP is calculated by adding the market value of investments, accrued income, and current assets, subtracting liabilities and fund management charges, and dividing the result by total outstanding units. Since FMC is deducted before publishing, the NAV you see is already net of expenses. This value is updated every business day after market closing, reflecting the latest fund performance accurately.

How many units will I get in ULIP?

The number of units you receive in a ULIP depends on your net investible premium and the NAV on the allotment date. The below formula is used for this calculation:

Units Allotted = Net Investible Premium ÷ NAV

After deducting charges like premium allocation charges and mortality, the remaining amount is invested. For exan, ₹97,200 invested at ₹25 NAV gives 3,888 units.

Is a high NAV good or bad in ULIP?

A high or low ULIP fund NAV is not inherently good or bad. Net Asset Value simply indicates how much the fund has grown over time as all funds start with a NAV of ₹10. Investors often assume lower NAV means a cheaper investment, which is a misconception.

Instead of wondering about NAV, it is more important to consider the fund’s performance versus its benchmark over a pre-determined time period. So, a high or low NAV does not actually matter when you are making an investment.

What does NAV mean in ULIP?

NAV meaning in ULIP stands for Net Asset Value, which is the price of a single unit of your ULIP fund at a specific time. When you invest, your premium is converted into units based on the prevailing NAV. As market conditions change, NAV fluctuates, directly impacting your fund value. It acts as a daily indicator of your investment’s performance and helps you track growth.

How does ULIP NAV affect my returns?

ULIP returns are influenced by the NAV at which you invest and the NAV at which you exit. A lower entry NAV allows you to accumulate more units, while a higher exit NAV increases your final fund value. For example, if your buy ULIP fund units at ₹20 and redeem these units at ₹50, it can yield significant gains. Therefore, the growth rate of NAV over time determines your actual investment returns.

When is ULIP NAV declared?

ULIP NAV is declared at the end of every trading day, typically from Monday to Friday, excluding market holidays. It is calculated based on the closing prices of underlying securities at end of the trading session at 3:30 PM. As per regulatory guidelines, insurers must publish NAV on their official platforms within a stipulated time. This daily update ensures investors have access to updated fund valuation so that the fund performance can be checked accurately by the policyholder.

Can ULIP NAV go below ₹10?

Yes, ULIP NAV can fall below its initial face value of ₹10 if market conditions negatively impact the fund’s underlying assets. During major market downturns, such as the sub-prime crisis of 2008 or the COVID-19 crash in 2020, NAVs of most funds dropped significantly. However, recovery is not guaranteed. ULIP NAVs may rise to previous level or fall further, depending on the performance of the selected fund and market conditions.

What is the difference between ULIP NAV and ULIP fund value?

ULIP NAV represents the per-unit price of the fund, while the fund value is the total worth of your investment. Fund Value is calculated as: Units Held × Current NAV. For example, if you hold 5,000 units and the NAV is ₹35, your fund value becomes ₹1.75 lakh. In simple terms, NAV shows the unit price, whereas fund value reflects your total accumulated corpus.

Is ULIP NAV and Sum Assured the same thing?

No, ULIP NAV and Sum Assured are completely different concepts. NAV determines the value of your investment portion, while Sum Assured refers to the guaranteed life cover provided by the policy. In case of the policyholder’s death, the nominee receives the higher of the Sum Assured or the fund value. NAV impacts investment growth, whereas Sum Assured ensures financial protection.

How is ULIP NAV different from mutual fund NAV?

While both ULIP NAV and mutual fund NAV represent per-unit values, they differ in structure and benefits. ULIPs are regulated by IRDAI and include life cover, whereas mutual funds are governed by SEBI and focus solely on investments. ULIP NAV is published by insurers, while mutual fund NAV is available on AMFI. Additionally, ULIP maturity is tax-free, and fund switches are tax-exempt.

How to check ULIP NAV online?

You can check ULIP NAV through multiple convenient methods. One way is to visit your insurer’s official website and check the NAV or fund performance section of the website. Alternatively, you can log in to your customer portal and view your policy details under the fund value section. You can also request NAV via SMS, WhatsApp, or customer care. Unlike mutual funds, ULIP NAVs are published individually by insurers.

What cut-off time applies for ULIP NAV allotment?

ULIP NAV allotment follows a standard cut-off time of 3:00 PM on working days. If your premium payment is received before this time, the same day’s NAV is applied. Payments made after 3:00 PM or on holidays are processed using the next business day’s NAV. This rule applies to premium payments, fund switches, and withdrawals, making timing an important factor.

Does FMC affect ULIP NAV?

Yes, the Fund Management Charge (FMC) directly impacts ULIP NAV. It is deducted daily from the fund’s assets before NAV is calculated, meaning the NAV you see is already net of this charge. According to regulations, FMC is capped at 1.35% annually for equity funds. Over time, lower FMC can help improve returns, while higher charges may slightly reduce NAV growth.

How is the ULIP fund value calculated from NAV?

ULIP fund value can be calculated by multiplying the current NAV of the fund with the total number of units. Units of a fund are accumulated over time through premium payments, while deductions like withdrawals or charges may reduce the number of fund units. As NAV increases due to market performance and you continue investing, your overall fund value grows. This impact of long-term compounding plays a key role in long-term wealth creation through ULIPs.

ARN: May26/Bg/25J

Sources:

https://premium.capitalmind.in/2006/01/ulip-navs-where/

https://es.scribd.com/document/535513619/ULIP-SIIP

https://www.wintwealth.com/blog/what-is-unit-linked-insurance-plan-ulip-meaning-ulip-full-form/

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Age of Male Applicant	Premium Amount for Rs. 75 lakh Term Plan		Premium Amount for Rs. 1 crore Term Plan		Premium Amount for Rs. 1.5 crore Term Plan		Premium Amount for Rs. 2 crore Term Plan
Age of Male Applicant	Smoker	Non-Smoker	Smoker	Non-Smoker	Smoker	Non-Smoker	Smoker	Non-Smoker
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55 Years (PPT: 30 years)	13,121/Month Total Premium: 44.73 lakh	7,289/Month Total Premium: 24.85 lakh	15,303/Month Total Premium: 52.17 lakh	8,502/Month Total Premium: 28.98 lakh	22,955/Month Total Premium: 78.25 lakh	12,753/Month Total Premium: 43.47 lakh	30,006/Month Total Premium: 102.29 lakh	16,670/Month Total Premium: 56.83 lakh
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