Definition
Net Asset Value (ULIP)
Net Asset Value is the per-unit price of a ULIP fund, reflecting the market value of its underlying investments less expenses, declared daily.
A ULIP holder's fund value equals the number of units held multiplied by the fund's NAV. Premiums (after charges) buy units at the prevailing NAV, and charges like administration and mortality are recovered by cancelling units, while the fund-management charge is built into the NAV itself.
Tracking the NAV lets policyholders see their investment's performance and value their holdings. NAV-based pricing is what makes ULIPs transparent and market-linked, distinguishing them from traditional plans where value is opaque until a surrender quote or maturity.
Related terms
- Fund Management Charge (FMC)The fund management charge is an annual percentage fee deducted from a ULIP's fund value for managing the underlying investment funds.
- Fund SwitchA fund switch is the movement of a ULIP's accumulated units from one investment fund to another, such as from equity to debt.
- Unit Linked Insurance PlanA Unit Linked Insurance Plan (ULIP) is a life insurance product that combines life cover with investment in market-linked funds chosen by the policyholder.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.