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A dual plan with life cover-cum-investment, Unit-Linked Insurance Plan helps one grow and protect their wealth. Thus, it can be said that they are long term goal-oriented investments. A small amount of the premium paid goes to insure the policyholder’s life, while the rest of the money is invested in funds.


In Unit-Linked Insurance Plans (ULIP), the investments made are liable to risks related to the capital markets. This risk is solely borne by the investor. You should, therefore, make your investment choices after speculating on your risk appetite and investment needs.

Further, before investing in ULIPs, be aware of your future needs for financial assistance.

What is ULIP NAV?

In ULIPs, a part of the premiums you pay is invested in various funds as per your investment goals. In a ULIP, NAV stands for Net Asset Value. Here, the NAV in ULIP funds is basically the value of the assets of your fund minus its liabilities. The NAV may also be known as the ‘book value'.

To understand Net Asset Value better, it is significant that we understand the working of unit funds. For ULIP investments, funds from various investors are put together to form one large sum of investment which is then invested in various instruments in the market. To accredit the company to divide the fund returns among investors, the total investment is then divided into various small units with a specific face value by the fund manager.

The formula used to calculate the NAV is as follows:

NAV = (Value of Current Assets + Market Value of Investments Held) - (Value of Current Liabilities & Provisions) / Total number of outstanding units on the date (before redemption/creation of units)

How is ULIP NAV Calculated?

Knowing what ULIP NAV is and learning the NAV calculation procedure makes it easier for investors to track the value of their funds and to redirect and switch their premiums when the fund is not performing as per expectations.

Let us have a look at how to calculate ULIP NAV.

Step 1: Select a valuation date for the calculations that suit your needs best.

Step 2: Calculate your fund securities using the following formula.

ULIP NAV Calculations

Step 3: Subtract outstanding liabilities of funds. Fund liabilities are the amounts borrowed by the funds to make extra investments to pay for outstanding loans. It can be calculated as follows.

ULIP NAV Calculations

Step 4: Now, divide the outstanding shares in your funds. This calculation will result in the Net Asset Value, or, in other words, the value of your shares in the fund. You can multiply the NAV by the shares you own if you have multiple shares in a fund.

ULIP NAV Calculations

To understand this better and learn NAV calculation in ULIPs, let us take an example. An insurance company named XYZ insurance provided ULIP plans to two customers, Mr. A and Mr. B. Now, Mr. A decided to pay ₹40,000 whereas Mr.B decided to pay just ₹30,000. After deducting fund management charges, let us assume that Mr. A’s invested amount is ₹39,600 and Mr. B’s invested amount is ₹29,500. Meaning, the sum amount available to be invested in other market funds is ₹69,100. This value is known as the Net Investment Value.

Now, let’s assume that the fund manager created fund units with a face value of ₹10. Based on this, Mr. A will hold ₹39,600/₹10 = 3,960 units and Mr. B will hold ₹29,500/₹10 = 2,950 units. Hence, within the fund, the total units will be 6,910.

On the first day after investment, the NAV of ULIP fund will be ₹69,100 divided by the total number of units, that is 6,910, which leaves us with ₹10.

Let us assume that after investment, the fund’s value has increased to ₹1 lakh due to profits. The new ULIP NAV will have to be calculated by dividing the profit by fund units, which is 6,910. The fund units will remain unchanged even after making a profit until you buy more units with the next premium instalment. Now, the new value of each unit in the fund:



= ₹14.47


So, the net worth of Mr. A’s units is the fund units multiplied by the new value, which is:


= 3,960 x ₹14.47

= ₹57,301

Hence, Mr. A’s total profit is ₹17,701. Similarly, Mr. B’s total profit is ₹13,186.

Bottom Line

Investments, in the long run, can make a significant difference to your investment portfolio. For your long term goals, there are various Bajaj Allianz Life ULIP Plans available on Bajaj Markets. With equity and debt or combinations of both, you have the flexibility to choose the fund that aligns with your investment goals. The Unit-Linked Insurance Plans on Bajaj Markets offers you a variety of products that suit your goals. Be it your child’s education plans or retirement plans, investment options like the Bajaj Allianz Life ULIP will help you identify a plan that fits your long-term needs.

With complete transparency, you shall know what charges you are paying for and what funds are being utilised. Browse through the ULIP Plans available on Bajaj Markets and choose a policy that suits your needs best!

FAQs on ULIP NAV Calculation

What is the formula used for NAV calculation?

The NAV calculation formula is as follows:

NAV = (Value of Current Assets + Market Value of Investments Held) - (Value of Current Liabilities & Provisions) / Total number of outstanding units on the valuation date (before redemption/creation of units)

What is meant by 'Unit' in Unit-Linked Insurance Plans?

The individual parts that a Unit-Linked Insurance Plan is divided into is termed as a unit.

How much of the premium I pay is used in purchasing fund units?

As it's commonly known, the entire premium sum is not utilised for purchasing units. Though the insurer does not charge any allocation fees, there will be other charges associated, differing for every product. Such charges will be deducted from the premium paid and the rest will be used for purchasing units.

How can I know my risk appetite regarding my ULIP investment?

To get an idea regarding your risk appetite and receive ULIP investment suggestions, you can make use of our online ULIP risk calculator with ease! 

How can I buy a ULIP plan online on Bajaj Markets?

To purchase a Unit-Linked Insurance Plan online on Bajaj Markets:

  • Go to the ‘ULIP’ section on Bajaj Markets

  • Select the ULIP you wish to invest in

  • Fill in the application form with the necessary details

  • Review the terms of the policy

  • Pay the premium online

  • Your ULIP policy document will be sent to your registered email ID

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