There are multiple investment instruments available in the market. Some investment products not only serve the purpose of investing but also are a great insurance and tax saving facility. 

To name a few trending investment instruments in India, here’s a list –

  • Mutual Funds
  • ULIPs (Unit Linked Insurance Plans)
  • PF (Pension Fund)
  • PPF (Public Provident Fund)

However, in this article, we will be discussing ULIP vs PPF, which we believe will further help you to make a better investment decision.

What Is A ULIP?

A Unit Linked Insurance Plan is nothing but an investment plan that allows you to benefit from both – a life insurance coverage as well as market investments of your choice. In this, a part of the premium you pay is utilised towards life cover; while the remaining is invested in funds of your choice (depending on your risk appetite).

What Is PPF?

Public Provident Fund (PPF) is a government scheme that was launched in the year 1968. It is one of the most reliable savings instruments in India. It offers attractive interest rates and returns that are fully tax exempted. You can start investing an amount between a minimum of INR 500 and a maximum of INR 150000 in a single financial year.


The table below compares the two investment plans  ULIP and PPF based on certain factors.





It mainly focuses on insurance and building your wealth over time.

It acts more like a post-retirement income.


The minimum lock-in period is five years.

However, according to the IRDAI regulations, if you discontinue the policy before the lock-in period is over, you will have to pay surrender charges (between INR 1000 and INR 3000) depending on the premiums you paid.

There is a mandatory lock-in period of fifteen years. However, you would be eligible for partial withdrawals from the seventh year.


The amount you invest depends on the ULIP plan you choose.

A minimum investment of INR 500 and a maximum of INR 1.5 lakh can be made towards PPF in a single financial year.


  • Premium allocation charges

  • Mortality charges

  • Administration charges

  • Fund management charges

There are only one-time account opening charges of INR 100.


The premium amount of up to INR 1.5 lakh is non-taxable under Section 80C of the Income Tax Act, 1961.

In PPF, the amount invested in a single financial year is tax exempted under Section 80C of the Income Tax Act.


Partial withdrawal is allowed after the completion of the lock-in period.

Partial withdrawal is allowed after completing seven years, and complete withdrawal can be made only after 15 years.


It depends on the kind of funds you have chosen to invest – equity or debt funds.

There is no risk involved as the Central Government backs it.

To Sum It Up!

Although unit linked insurance plans involve some risk, they have high returns on investment. Moreover, unlike PPF, ULIP benefits also include life insurance coverage facility along with investment – all under a single plan. We believe that with the help of the above table, you now know the difference between ULIPs and PPF investments. If you are still confused, you can seek professional guidance from a financial advisor before making a final decision. 

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