Bandhan Life: ULIP Plan Guide

Quick Overview

Bandhan Life Insurance Limited is a private life insurer headquartered in Mumbai, India. Formerly known as Aegon Life Insurance Company, it was rebranded after its acquisition by Bandhan Financial Holdings in February 2024. The company offers a range of digital-first life insurance products, including term insurance and savings plans, designed to provide financial protection and support long-term financial planning.

Bandhan Life offers ULIPs such as iInvest that combine life insurance with market-linked investments. These plans allow policyholders to invest in equity, debt, or balanced funds based on their risk appetite while maintaining life insurance protection.

Bandhan Life Insurance leverages advanced technology to make life insurance more accessible and user-friendly. The solutions offered align with the needs of a digitally connected generation seeking simple and convenient financial protection.

This guide walks you through Bandhan Life ULIP plans, their features, charges, projected returns, performance metrics, and how they compare with term insurance plus Systematic Investment Plans (SIPs) for long-term financial planning.

Bandhan Life Insurance: Performance Metrics

Metrics/Values	Average FY 22-25	Industry Average	Insight
Claim Settlement Ratio (CSR)	99.59%	98.66%	The insurer maintains a very high CSR above the industry average, indicating consistent claim servicing and reliable settlement performance.
Amount Settlement Ratio (ASR)	97.56%	94.83%	ASR is higher than the industry average, suggesting strong reliability in paying the claimed amounts.
Annual Business Volume (in Cr)	₹121	₹3,411 cr	Business volume is significantly smaller than industry peers, indicating a relatively limited operational scale.
Amount Paid in Death Claims (in Cr)	₹96.7	₹195.05	The total amount paid in death claims is lower than the industry average, reflecting the insurer’s relatively smaller scale of operations.
Volume of Complaints per 10,000 claims	39.67	17.67	Complaints are higher than the industry average, reflecting scope for improvement in customer grievance handling.
Solvency Ratio	2.66x	2.04x	The solvency ratio is above both regulatory requirements and the industry average, indicating strong financial stability.

Note: The above metrics reflect the overall performance of Bandhan Life Insurance and are not limited to its ULIP portfolio.

ULIP Plans Offered by Bandhan Life

Plan	Fund Options	Features	Ideal For
iInvest Advantage	9 segregatedFunds with 2 portfolio strategies	Life covers up to 20× annual premium, no policy administration charges and loyalty additions available from the end of the 15th policy year and every 5th year thereafter.	Suitable for long-term investors and young professionals who want to build wealth while maintaining life insurance protection.
iInvest II	9 segregatedFunds with 2 portfolio strategies	The plan offers up to 20x life cover, market-linked funds with flexible allocation/switching, mortality charges returned at maturity, and loyalty additions in later years.	Suitable for people who want flexible investment options along with life insurance protection.
iInvest Ultima	9 funds with 2 portfolio strategies	Offers life cover up to 20x annual premium, loyalty additions from year 10, and returns mortality and allocation charges by year 15, subject to policy conditions.	Suitable for investors comfortable with market risk and long-term investing, as ULIPs have a 5-year lock-in and most benefits begin only after years 10 or 15.
ULIP Plus	9 segregatedFunds with 5 portfolio strategies	Life covers up to 50x the annual premium, loyalty additions from the 7th year, up to 3x mortality charges returned from the 11th policy year onward, and multiple investment strategies.	Suitable for investors seeking higher life cover and potential long-term investment growth.

Premiums for Bandhan Life ULIP Plans

Parameter	iInvest Advantage	iInvest II	ULIP Plus
Annual Premium	₹1,00,000	₹1,00,000	₹1,00,000
Premium Payment Term	10 years	10 years	10 years
Sum Assured	₹10 lakh	₹10 lakh	₹30 lakh
Policy Term	20 years	20 years	25 years
Projected Value at 8% Gross Return	₹26,51,467	₹27,20,913	₹34,66,326
Projected Value at 4% Gross Return	₹14,62,165	₹15,11,570	₹16,76,661

Note: Projected values are illustrative for a 35-year-old. Actual returns are not guaranteed and depend on market performance. The figures listed are taken from the iInvest Advantage Brochure, iInvest II Brochure, and ULIP Plus Brochure.

Drawbacks of Buying a Bandhan Life ULIP Plan

Limited Life Cover: Bandhan Life ULIP plans like iInvest Advantage and iInvest II offer life cover up to 20x the annual premium. Even with this multiplier, ULIPs typically provide lower protection than a standalone term plan for the same budget.
Multiple Charges Reduce Investment Returns: ULIPs include charges for fund management, mortality, and premium allocation. These deductions reduce the amount invested and can affect long-term compounding, especially in the initial years.
Mandatory Lock-in Period: ULIPs have a 5-year lock-in under IRDAI rules. If discontinued before the 5-year lock-in ends, the money is transferred to the Discontinued Policy Fund and becomes payable after the lock-in period, as per policy and regulatory terms.
Limited Investment Choice and Tax Conditions: Investments are restricted to the insurer’s funds. Maturity is tax-free only if the premium stays within 10% of the sum assured and annual premiums remain within prescribed limits. For policies issued after February 2021 with annual premiums above ₹2.5 lakh, maturity proceeds become taxable, but your death benefit remains exempt.

Note: Some ULIPs, such as Bandhan Life iInvest Advantage, highlight zero premium allocation charges. While this can be beneficial, it reflects only part of the cost structure. Other charges, such as mortality charges, fund management charges, and policy administration fees, may still apply, so the overall cost of the ULIP should be evaluated carefully.

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ULIP vs Term Insurance: Which is Better?

The difference between ULIP and term insurance lies in their purpose. ULIPs combine life insurance with market-linked investments, while term insurance focuses purely on providing higher life cover at a lower cost.

Check out the Infographic to have a clearer understanding.

Numerical Illustration:

Let’s take an example of a 30-year-old who invests ₹20,000 per month:

If they opt for a ULIP, they invest ₹20,000 per month for 20 years to build wealth while maintaining life cover.
If invested separately, they invest ₹12,000 per year for a ₹1 crore term plan, and the remaining ₹19,000 per month is invested in a mutual fund SIP.

Comparision Table

Metric	ULIP	Term Insurance + Mutual Fund SIP
Monthly Outflow	₹20,000	₹20,000
Annual Outflow	₹2.4 lakh	₹2.4 lakh
Estimated Net Return	10.5% after charges	11.5% after expenses
Life Cover	₹24 lakh (10× premium)	₹1 cr term cover
Investment Allocation	The entire amount goes into ULIP	₹19,000 (SIP) + ₹12,000 (annual term premium)
Corpus After 20 Years (Approx.)	₹1.62 cr	₹1.76 cr

Note: This calculation is a generic illustration comparing a ULIP with a Term Insurance + SIP strategy. Actual returns depend on market performance.

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Conclusion

Bandhan Life ULIP Plans may suit certain investors based on their insurance eligibility and investment preferences. They can work for individuals who are not eligible for term insurance due to medical conditions or high-risk occupations. They may also appeal to people who already have adequate term cover but want an additional investment-plus-insurance product.

However, many people still choose to buy a standalone term insurance policy for protection and invest separately through options like SIPs. This approach can provide higher life cover, potentially better returns, and greater flexibility in managing investments.

Bandhan Life shows excellent CSR, ASR, and strong solvency, reflecting reliability. However, it operates on a small scale with modest annual business and death claim volumes, and while complaints are relatively high, they have been improving.

If you are looking for a term plan from insurers with established track records, we recommend the best term insurance plans, which align with your future goals and family needs.

Note: Bandhan Life is not Ditto’s partner insurer. At Ditto, we do not recommend ULIPs, and the information in this guide is based on publicly available sources and the insurer’s official website and is shared for educational purposes only.

Frequently Asked Questions

Can I hold more than one Bandhan Life ULIP at the same time?

Yes, you can hold multiple ULIPs from the same insurer. However, track the combined annual premium across policies. If total premiums exceed the tax threshold under Section 10(10D), maturity proceeds may become taxable.

What happens if I stop paying premiums during the 5-year lock-in?

The policy does not immediately lapse. The fund value moves to a Discontinued Policy Fund, earning a minimum return set by regulation. The money stays there until the lock-in ends. However, life cover stops once the policy moves to this fund.

Does frequent fund switching affect ULIP returns?

Most ULIPs allow free fund switches, but frequent switching may affect returns. Transactions are executed at the end-of-day NAV, so short-term market timing can reduce gains compared with a long-term, disciplined investment approach.

What types of plans are covered in a Bandhan Life Insurance review?

A typical Bandhan Life Insurance review evaluates term insurance plans, ULIPs, and savings products. These plans aim to provide life cover along with options for long-term savings or market-linked investment growth.

Can I receive ULIP maturity proceeds as regular payments?

Yes, many ULIPs offer a settlement option in which maturity proceeds can be paid in installments rather than as a lump sum. The funds remain invested during this period, but life cover ends at maturity, and tax treatment depends on policy eligibility.

Last updated on: 14 Mar, 2026