Term Insurance vs Endowment/ULIP
Same premium budget, two paths: a cheap term plan plus investing the rest, or one bundled endowment/ULIP policy. We simulate both to maturity.
Term + Invest wins by $622,736
Investing the premium difference at 12% outgrows the endowment/ULIP's 5.5% by enough to more than make up for term insurance's lower payout at death — while also leaving you with real cover.
Maturity value over time
How this verdict is calculated
Both paths spend the same total premium every year. Term + invest spends a small slice on a term premium for real cover, then invests everything left over from the budget in the market. Endowment / ULIP puts the entire budget into the policy, growing at your assumed net-of-charges return instead. We compare the maturity value of both after the full horizon.
Common questions
Bundling is exactly the problem, not the benefit. The insurance portion inside these plans is far more expensive per rupee of cover than a term plan, and the investment portion typically returns less than investing the same money directly — you end up with a mediocre version of both instead of a good version of either.