I’ve recently became a member of HDFC LIFE PROGROWTH PLUS plan. The person from my savings holding bank told me about this plan. He asked me to invest 25000/- per year for 10 years, you will get good earn after 10 yrs. I said I wouldn’t like to go for 10 years instead I invest for 5 years. He said if you invest for 25000/- for 5 years you will get more than 3LACS. Is it worth to invest in this plan?

Below snapshot taken from money control website.
Let us consider that this is my 5th year and invested 25000/- for this year. So total investment is 125000/-. Here will I get Absolute(%) or annualised(%)?

For absolute(%) Total amount=(125000*142.6)/100+125000=303250/-

For annualised(%) Total amount=(125000*19.4)/100+125000=149250/-

Which one I get? Absolute(%) or annualised(%)?

  • 3
    Don't mix insurance with investing.
    – RonJohn
    Oct 14, 2017 at 4:07
  • 1
    I added the india tag because the question is very much about life insurance as it is sold in India. People from India (whether resident in India or abroad) almost universally regard any form of term life insurance as a scam; "Sanguinary crooks! They just take your money and you don't get anything back" as Dheer put it in a comment that I cannot find. Variable-life or universal-life policies are perhaps a tad more palatable in India, but past returns are no guarantee of future performance, which s what the OP wants to know about: he has just started with the plan. Oct 14, 2017 at 16:03
  • Don't mix insurance with investing. Instead of buying ULIP you can invest in Mutual funds using SIP.
    – RajSharma
    Oct 16, 2017 at 2:45
  • You should buy ulip if allocation charges are zero. Regular mutual funds have expenses of ~2% and you will get ULIP with same expenses (if your age is 27-30 years). There are many options available after long term capital gain in mutual fund. Mar 19, 2018 at 13:52

1 Answer 1


Both are incorrect.

What it says is if your fund value is 25,000 in first year; then this will earn 19.4% compound for 5 years. This is same as 142.5 absolute.

The money invested in second year, will only earn for 4 years, compound interest of 19.4%. so on ... The 25000 invested last year only 19.4 for a year.

The other aspect you are missing is when you pay 25,000; 4% goes towards charges. So you are only investing 24,000. Plus there is an amount towards life cover. Depending on age, around 1000 for one lacs. This means the investment is only 23000 or 23500.

Generally it is not advised to buy ULIP. It is cheaper to buy term insurance plus mutual fund.

  • The return in year 1 is 19.1%, not 19.4%. Oct 14, 2017 at 14:21
  • 1
    @ChrisDegnen The return in the past 1 year is 19.1%. The yeilds are as of today; for past 3 month, past 6 months, past 1 year, 2 year, etc.
    – Dheer
    Oct 14, 2017 at 14:27
  • Few ULIP are available in market with ~2% expenses. Mar 19, 2018 at 13:37

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