Synopsis: GIFT City ULIPs let NRIs invest in US dollars with global fund access, while regular ULIPs stay rupee-denominated and India-focused. This article compares both clearly on currency, taxation, investment options and suitability to help you decide for 2026.
NRIs now have two different types of ULIPs, which are: the GIFT City ULIPs, which are dollar-denominated and fall under the regulatory body of the International Financial Services Centres Authority (IFSCA); and the regular ULIPs, which are rupee-denominated and fall under the regulatory body of the Insurance Regulatory and Development Authority of India (IRDAI). Both types are similar in their basic concept but different in several aspects such as currency, tax implication, and investment options.
What Are GIFT City ULIPs?
A GIFT City ULIP is a Unit Linked Insurance Plan that has been offered from India’s International Financial Services Centre (IFSC), which is situated at Gujarat International Finance Tec-City, and is regulated by the IFSCA instead of IRDAI. They are denominated in US dollars (or other allowed foreign currencies), which means that premium payment, value of the fund, and payout at maturity remains in foreign currency; there is no currency conversion into rupees involved here. These plans are tailored for NRIs, OCIs, PIOs, and Indian residents investing under the RBI’s Liberalized Remittance Scheme (LRS), and provide the opportunity to invest abroad where domestic ULIPs normally cannot provide for, like international equities, US Treasury securities, commodities ETFs, and more.
- Regulator: IFSCA
- Currency: USD or other permitted foreign currency
- Who it’s for: NRIs, OCIs, PIOs, and LRS-route residents
- Where it’s issued from: IFSC branches of Indian insurers at GIFT City, Gandhinagar
What Are Regular ULIPs?
A traditional ULIP is the market-linked insurance product that is available through Indian life insurance companies and is regulated by IRDAI. The premium is payable in Indian rupee currency, and the investments made by these funds are mostly in Indian equities and debt funds. These plans suit investors whose income, expenses and financial goals like retirement, children’s education, property are all based in India.
- Regulator: IRDAI
- Currency: Indian Rupee (INR)
- Who it’s for: Resident Indians and NRIs with India-based goals
- Where it’s issued from: Domestic branches of Indian insurers
GIFT City ULIPs vs Regular ULIPs: Key Differences
Also Read: EPF Scheme 2026: 8 Big Changes to PF Withdrawal Rules Every Salaried Employee Should Know
Popular GIFT City ULIPs Available in 2026
There are many Indian insurance companies that have branches operating under the IFSC category in GIFT City which are providing ULIPs in US dollars.
- HDFC Life International – Global Wealth Advantage: Dollar-denominated wealth plus protection plan with single pay, limited pay and regular pay variants as well as systematic dollar payout modes.
- ICICI Pru Global Wealth Multiplier: Dollar ULIP investment plan with global equity, US treasury-based debt securities, commodity investments and a choice for India equity fund.
- Tata AIA Shubh Global Invest: Dollar ULIP plan with choice for international funds, including a Global AI & Technology Leaders Fund, and a waiver-of-premium facility.
- Axis Max Life – Smart Global Investment Fostering Tomorrow Plan: Dollar ULIP plan with maximum 4 international funds including US Equity Fund that tracks the S&P 100
There are some other insurance companies that are also introducing insurance plans for GIFT city; investors should visit the respective insurers’ official websites to know more about the insurance plans available.
Taxation: GIFT City ULIP vs Regular ULIP
- Regular ULIPs sold after 1st February 2021 will be eligible for tax exemption under section 10(10D) only in accordance with certain conditions. Any aggregate annual premium payable on regular ULIPs exceeding ₹2.5 lakhs would make the maturity benefit taxable.
- Unlike specified domestic ULIPs, GIFT City ULIPs are generally not subject to the ₹2.5 lakh annual premium threshold applicable to specified domestic ULIPs. Maturity proceeds may be eligible for tax exemption if the sum assured is at least 10 times the annual premium, subject to the applicable provisions of the Income-tax Act.
- The ultimate tax effect will also depend on your country of tax residency. In case you happen to be an NRI in the US, it might be advisable to look into PFIC (Passive Foreign Investment Company) issues of US tax laws before purchasing the ULIPs, as failure to do so could lead to unexpectedly high taxes.
Key Risks NRI should consider:
Before investing in a GIFT City ULIP, keep these factors in mind:
- Market-linked Returns: The returns are linked to the performance of the underlying investment funds and are not assured.
- Currency Movements: Though such schemes help reduce rupee depreciation risks for foreign targets, currency fluctuations could also affect their returns.
- Policy Expenses: Premium allocation, fund management, mortality, and policy administration expenses differ from one insurance company to another and can affect returns as well.
- Lock-in Period: GIFT City ULIPs generally have a lock-in period as specified under the policy terms, during which withdrawals may be restricted.
- Tax Consequences: Taxation could vary depending upon your place of residence, and hence, NRIs must know about the relevant tax laws before making investments.
Who Should Choose Which ULIP?
- A GIFT City ULIP would be suitable for NRIs and investors having financial objectives related to their global requirements, like funding their children’s education abroad, retirement abroad, or purchasing a property in other countries. This ULIP would be beneficial for those who wish to make investments and receive payments in foreign currency by gaining exposure to global stocks, debts, and other investment avenues.
- However, a Regular ULIP could be more preferable for investors having financial objectives that relate to India, such as educating their children in India, retiring in India, or creating wealth in Indian rupees. The ULIPs are appropriate for those investors who wish to have exposure to the equity and debt market of India.
