ULIP traction rises in Q3FY26 as equity markets outperform year-ago period

Private life insurers reported stronger demand for ULIPs in Q3FY26 as equity markets gained sharply. Customers also shifted towards higher sum assured plans with protection-linked riders

Life insurers saw a rise in demand for unit-linked insurance plans (ULIPs) during the quarter ended December 2025, as equity markets performed favourably in the October-December quarter of FY26 compared to the corresponding period in the previous financial year.

 

Private life insurers are also witnessing a shift among customers towards higher sum assured and protection-focused products, with insurers offering protection-linked riders in their ULIP offerings.

 

In Q3FY26, equity markets performed better than in the same period last financial year, with the BSE Sensex and NSE Nifty50 recording growth of 6.2 per cent, compared with a decline of 7.3 per cent and 8.4 per cent, respectively, in the corresponding quarter last year.

 

Meanwhile, during the April-December period of FY26, the BSE Sensex rose 10.1 per cent and the NSE Nifty50 gained 11.1 per cent, compared with growth of 6.1 per cent and 5.9 per cent, respectively, in the same period last year.

 

India's second-largest private life insurer, HDFC Life Insurance, saw the share of ULIPs in its product mix rise to 43 per cent in the April-December period of FY25, compared with 37 per cent in the year-ago period. At the same time, the share of non-participating products declined from 35 per cent to 19 per cent.

 

In its post-earnings analyst call, HDFC Life said: “ULIPs continued to see strong traction supported by favourable equity sentiment, while participating products remained in steady demand... This growth was supported by higher protection-related riders in these products and increased sum assured multiples in the ULIP business, reinforcing the quality of growth and alignment with long-term protection objectives.”

 

At ICICI Prudential Life, the revival in linked products was more visible during the quarter. The insurer’s linked business grew 8.3 per cent year-on-year (Y-o-Y) in Q3FY26, with protection riders attached to new ULIP products.

 

In the post-earnings call, Dhiren Salian, chief financial officer at ICICI Prudential Life Insurance, said: “We haven't called out the share of higher sum assured ULIPs, but it's safe to say that it has started to pick up materially over the current fiscal. In terms of riders, these are on new products and new sales only.”

 

ICICI Prudential also attributed traction in ULIPs to the launch of long-term wealth-focused products such as ICICI Pru Wealth Forever, ICICI Pru SmartKid 360, and ICICI Pru Wealth Elite Pro.

 

Speaking during the earnings call, Managing Director and Chief Executive Officer Anup Bagchi said the company’s linked portfolio is increasingly focused on products that combine wealth creation with goal protection, higher sum assured, and comprehensive nominee benefits, enabling ICICI Prudential to cater to customer needs beyond pure investment-led offerings.

 

The country's largest life insurer, state-owned Life Insurance Corporation of India (LIC), also saw an increase in ticket size due to healthy growth in its annuity and ULIP products. According to analysts’ reports, despite its growing focus on the non-participating segment, LIC’s share of ULIPs rose to 9.83 per cent in the quarter, compared with 8.07 per cent in the same period last year.