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Some of the Best Investment Plans to invest in this year for Tax Saving Purpose
Tax Savings Plans | Entry Age | Minimum Premium | Premium Allocation Charge | Policy Admin charge | No. of free switches in a year |
Bajaj Allianz Future Gain | 1 to 60 years | Rs 25,000 | 0% to 1.5% | Rs 33.33 per month | Unlimited |
PNB Metlife Smart Platinum | 7 to 70 years | Rs 30,000 to Rs 60,000 | 1.25% p.a | Rs 40 | 4 |
MAX Life Fast Track Growth Fund | 18 to 50 years | Rs 25,000 to Rs 1 lakh | 2%(Single Premium) to 4% (Annual premium) | Rs 1,500 per year | 12 |
SBI Life Wealth Assure | 8 to 65 years | Rs 50,000 | 3% of Single Premium | Rs 45 per month | 2 |
HDFC Life Pro Growth Plus | 14 to 65 years | Rs 2,500 to Rs 10,000 | 2.5% of Annual premium | Rs 500 per month | Unlimited |
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Unit linked insurance plan (Ulip) is a hybrid product, a combo of protection and saving. It not only provides life insurance but also helps channel one’s savings into various market-linked assets for meeting long-term goals.
In most Ulips, there are 5 to 9 fund options with varying asset allocation between equity and debt. A Ulip can have a duration of 15 or 20 years or more but the lock-in period is 5 years.
1. What is ULIP
ULIP or Unit Linked Insurance Plan is a mix of insurance along with investment. From a ULIP, the goal is to provide wealth creation along with life cover where the insurance company puts a portion of your investment towards life insurance and rest into a fund that is based on equity or debt or both and matches with your long-term goals. These goals could be retirement planning, children’s education or another important event you may wish to save for.
2. How does ULIP work?
When you make an investment in ULIP, the insurance company invests part of the premium in shares/bonds etc., and the balance amount is utilized in providing an insurance cover. There are fund managers in the insurance companies who manage the investments and therefore the investor is spared the hassle of tracking the investments. ULIPS allow you to switch your portfolio between debt and equity based on your risk appetite as well as your knowledge of the market’s performance. Benefits like these which offer investors the flexibility of switching is a huge factor contributing to the popularity of these investment instruments.
3. Lock-in-period of ULIP
One of the changes brought about by the Insurance Regulatory and Development Authority of India (IRDAI) in the year 2010 as regards ULIPs, was to increase the lock in a period from 3 years to 5 years. However, insurance being a long-term product, as an investor you may not really reap the benefit of the policy unless you hold it for the entire term of the policy which can range from 10 to 15 years.
4. Benefits of ULIP
- Life cover: First and foremost, with ULIPs you get a life cover coupled with investment. It offers security that a taxpayer’s family can fall back on in case of emergencies like the untimely death of the taxpayer, etc.
- Income tax benefits: Not many are aware that the premium paid towards a ULIP is eligible for a tax deduction under Section 80C. Additionally, the returns out of the policy on maturity are exempt from income tax under Section 10(10D) of the Income-tax Act. This is a dual benefit that you can claim with this policy
- Finance Long Term Goals: If you have long-term goals like buying a house, a new car, marriage, etc., then ULIP is a good investment option because the money gets compounded. As a result, the net returns are generally more. This stands true even if you want to exit after the 5 year lock-in period in comparison to not having invested the amount at all and retaining it in a savings account or in the form of an FD. But, under ULIP, the mantra is to always keep the policy going for a longer time horizon to reap the best out of it
- The flexibility of a portfolio switch: As already mentioned, ULIPS are usually designed in a way that they allow you to switch your portfolio between debt and equity based on your risk appetite as well as your knowledge of how the market is performing. Insurance companies, on the other hand, allow a very few numbers of switches free of cost
5. Things to consider as an investor
Following are some important factors you should weigh in before investing in ULIPs:
- Personal financial goals: If your financial goal is about wealth creation and you want to save money for retirement, ULIP is one of the best options available
- Compare ULIP offerings: Once you have determined your financial goal and the type of ULIP that will help you achieve it, the next step would be to compare the ULIP offerings in the market. Look for a comparison in the form of background expenses, premium payments, ULIP performance, etc. Also, investigate the nature of funds that the ULIP invests in to ascertain the returns from investments in the particular ULIP
- Risk factor: Since ULIP investment is not as diversified as compared to ELSS, the risk in ULIP is probably a bit high compared to schemes like ELSS
- Investment horizon: ULIPs have a lock-in period of 5 years. If a ULIP is surrendered in the first three years, the insurance cover would cease immediately. However, the surrender value can be paid only after three years
6. Types of ULIPs
ULIPs are categorized based on the following broad parameters:
a. Funds that ULIPs invest in
i. Equity Funds: Where the premium paid is invested in the equity market and thereby is subject to higher riskii. Balanced funds: Where the premium paid is balanced between the debt and the equity market to minimise the risk for investorsiii. Debt Funds: Where the premium is invested in debt instruments which carry a lower risk but in turn also offer a lower return
b. End use of Funds
i. Retirement Planning: For those of you who plan to invest for the retirement days while you are still employedii. Child Education: You can investment with a long-term goal of saving to fund your child’s education or save for some unforeseen circumstancesiii. Wealth Creation: You can make investments to build a heavy corpus that you can utilize for a future financial goal
c. Death benefit to Policy Holders
i. Type I ULIP: This pays higher of the assured sum value or the fund value to the nominee in case of death of the policyholderii. Type II ULIP: This pays the assured sum value, plus the fund value to the nominee in case of the death of the policyholder
7. ULIPs Vs Mutual Funds
Here is a comparison between the two:
Particulars | ULIPs | Mutual Funds |
Nature | Investment cum insurance product | Pure Investment product |
Withdrawal | Only after lock-in-period of 5 years | Can be withdrawn anytime |
Switching | Alternating between funds is permitted and not subject to taxation. | Switching is permitted between schemes of the same fund house. However, it’s treated as a redemption and the resulting capital gains are taxable. |
Charges | Mortality charges, premium allocation charge, fund management charge and administration charges | No entry load, the annual fund management charges apply and an exit load, if applicable. |
8. Some of the ULIPs to invest in this year
ULIP Plans | Entry Age | Minimum Premium | Premium Allocation Charge | Policy Admin charge | No. of free switches in a year |
Bajaj Allianz Future Gain | 1 to 60 years | Rs 25,000 | 0% to 1.5% | Rs 33.33 per month | Unlimited |
PNB Metlife Smart Platinum | 7 to 70 years | Rs 30,000 to Rs 60,000 | 1.25% p.a | Rs 40 | 4 |
MAX Life Fast Track Growth Fund | 18 to 50 years | Rs 25,000 to Rs 1 lakh | 2%(Single Premium) to 4% (Annual premium) | Rs 1,500 per year | 12 |
SBI Life Wealth Assure | 8 to 65 years | Rs 50,000 | 3% of Single Premium | Rs 45 per month | 2 |
HDFC Life Pro Growth Plus | 14 to 65 years | Rs 2,500 to Rs 10,000 | 2.5% of Annual premium | Rs 500 per month | Unlimited |
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9. Income Tax Benefits
Premium paid on ULIPs is eligible for a deduction under Section 80C up to a maximum of Rs 1.5 lakhs during a year. Further, the amount you receive on maturity is tax exempt under Section 10(10D).
10. Types of fees and charges
In every investment, there are various charges that need to be paid. In the case of ULIP, the charges can be broadly classified as:
a. Premium Allocation Charge
Premium Allocation Charge is deducted as a fixed percentage from the premium paid in the initial years of the policy. This is charged at a higher rate. The charges include the initial and renewal expenses and intermediary commission expenses. It is a front load charge as it is deducted from your premium paid.
b. Mortality Charges
This charge is to provide for the insurance coverage under the plan. Mortality charges depend on a number of factors like age, sum assured, etc., and is deducted on a monthly basis.
c. Fund Management Charges
Fund Management Charge is the fee imposed by the insurance company for the management of the various funds in the ULIP. It is levied for the management of the funds and is deducted before arriving at the NAV figure. The maximum charge allowed is 1.35 percent per annum of the fund value and is charged daily. Generally, insurers levy the maximum amount allowed in equity funds, while the charge on non-equity funds is much lower.
d. Partial Withdrawal Charge
ULIPs have the option of partial withdrawals of funds. Some plans offer unlimited withdrawals, but some restrict it to 2-4 withdrawals. These withdrawals can be free for up to a certain limit or you can be charged based on your transactions.
e. Switching your funds
The moving of funds or investments between options is called switching. There are options to switch your funds for free up to a certain limit per year. Any further changes might incur a charge of Rs. 100 -Rs.250 per switch.
f. Policy administration charges
This charge is levied for the administration of the policy and it is deducted on a monthly basis by the cancellation of units from all funds chosen. This charge can be levied at a fixed rate or as a percentage of your premium. ULIP as a mode of investment is a good choice given it offers the benefits of insurance with investment. With part of the investment spread across stock markets, you stand to gain higher returns. This also means that your investment is subjected to market risks. If your risk profile meets the tradeoff, this could be worth exploring.
Savings Investment Plans
Besides providing an investment avenue, saving investments plans also provide insurance coverage. A death benefit is promised under the plan which is paid if the insured dies during the chosen policy tenure. Thus, saving investment plans not only create a corpus, they provide protection too.
What is Saving Investment Plan?
There are various Types of Savings Investment Plan in the Indian Insurance industry. The most common types of investment plans available in Indian Market are:
I. Participating Endowment Plan
II. Unit Linked Investment Plans (ULIP)
III. Guaranteed Return Plan
IV. Money Back Plan
V. Monthly Income Plan
Any insurance product with an element of savings in terms of maturity benefit is called a Savings Investment Plan.
Participating Endowment Plans
In ULIPs, the policyholder has the option to select the type of investment where his money will be allocated and whether it would be equity or debt, based on his own risk appetite.
Unit Linked Insurance Plans are considered to be one of the best investment avenue in India for those who are looking for coverage cum investment options. ULIPs offer both financial protection as well as life coverage. Even though the return on ULIP are subject to market risk, they give a leverage to make direct market investments and hence the final yield is much better as compared to other investment options. The ULIPs funds can be invested either into equity or debt funds or into a combination of both. The market value of the equity fund or debt fund is evaluated on the NAV (Net Asset Value) criteria.
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Guaranteed Return Plan
Monthly Income Plan
Benefits of Savings Investment Plan
- Market Linked Returns: Savings investment plan especially ULIPs offer the prospect to earn market linked returns since a part of the premiums paid in invested in various market linked funds and then onwards in different market instruments such as debt and equity in a fixed ratio. The proportion of debt and equity depends on the investor’s risk appetite. In case the market performs well, the investor will earn good returns.
- 3 in 1 benefit of Investment, Savings and Life Protection : Plan such as endowment and Unit linked plans brings true value of an investment with multiple benefits benefit of life insurance and savings at market linked returns, making them one of the best investment options. This helps one to instill the habit of investing saving which is crucial in building wealth over a period of time.
- Flexibility: Savings Investment Plan comes in a wide assortment of investment avenues with significant scope for flexibility. The features such as switching between investment funds as per risk appetite and facility to withdraw funds partially and multiple premium payment options makes saving cum investment plan a must in everybody’s investment kitty.
- Protection to loved ones: Saving Investment Policy fetches return on the investments along with insurance coverage. This ensures that in the case of any unfortunate event to the insured, the Nominee will receive the sum insured as well as the fund value. The return is provided as a Lump sum amount or in the form of monthly/quarterly/half yearly payments.
Tax Saving Investment Plans
Points to remember before investing in Saving Investment Plan:
Long Term and Short Term Financial Goals
Understand Risk and Returns Ratio
Combine Liquid and Fixed option in a Saving Plan
Start Early and small
Research Thoroughly These Best Savings Plans
Best Investment Plans
SL NO | PLAN TYPE | PLANS NAME | ENTRY AGE | MAXIMUM MATURITY AGE | POLICY TERM |
---|---|---|---|---|---|
1 | ULIP | Future Generali Easy Invest Online Plan | 0-50 years | 18-70 years | 10 to 20 years |
2 | ULIP | SBI eWealth | 18-50 years | 60 years | 10-20 years |
3 | ULIP | HDFC Life Click2invest | 30 days – 65 years | 75 years | 5-20 years |
4 | ULIP | ICICI Pru Smart Life | 20-54 years | 30-64 years | 10-25 years |
5 | ULIP | Aegon iInvest | 7-55 years | 70 years | 10/15/20/25 years |
6 | ULIP | Bajaj Future Gain | 1-60 years | 70 years | 10 years |
7 | ULIP | Bajaj Allianz Fortune Gain | 1-63 years | 70 years | 7-30 years |
8 | ULIP | Bharti AXA eFuture Invest | 18-59 years | 69 years | 10 years |
9 | ULIP | Aviva iGrowth | 18-50 years | 60 years | 10 to 20 years |
10 | ULIP | Bajaj Allianz Retire Rich | 30-73 years | 80 Years | 7-30 years |
11 | Child Plan | SBI LifeSmart Scholar | 0-17 years | 65 years | 8-25 years |
12 | Child Plan | HDFC SL YoungStar Super Premium | 18-55 years | 65/75 years | 10 to 20 years |
13 | Child Plan | Aegon Life Rising Start Plan | 1-15 years | 75 years | 10/15/20 years |
14 | Pension Plan | HDFC Life Pension Surplus Plan | 35-65 Years | 75 Years | 10/15/20 years |
15 | Pension Plan | ICICI Pru Such Retirement Plan | 35-70 years | 80 years | 20-25 years |
16 | Endowment Plan | Kotak Classic Endowment Plan | 0 – 60 years | 75 years | 20 years |
17 | Endowment Plan | Birla Sun Life Insurance Bachat | 30 days – 60 years | 80 years | 10-20 years |
18 | Insurance Plan | Max Life Platinum Wealth Plan | 18-55 years | 65/70 years | 10-20 years |
19 | Insurance Plan | SBI Life Smart Wealth Builder Plan | 7- 60 years | 70 years | 20 years |
20 | Insurance Plan | HDFC Life Pro-Growth Plus Plan | 14 65 years | 75 years | 20/25 years |
21 | Insurance Plan | Future Generali Select Insurance Plan | 7-60 Years | 70 Years | 20/25 years |
22 | Money Back Plan | MetLife Money Back Plan | 13-55 Years | 65 years | 10 years |
Unit Linked Insurance Plans(ULIP)
What is ULIP?
Types of Investment Funds under ULIP Plans
- Fixed Interest and Bond Funds: These kind of funds give returns in a timely manner. For Fixed returns, insurance companies invest in debt funds, corporate bonds, government securities, etc. The risk factor in these funds is slightly high than Cash Funds. These funds are a combination of secured and unsecured investments.
- Cash Funds: Cash funds are considered to be the safest kind of investment. Cash funds are also known as money market funds through which the policyholder receives a set amount of returns upon maturity. These funds fall in the low-risk category.
- Equity Funds: These funds primarily invest in equities and stocks of companies. Equity funds are considered the riskiest ULIP investment, but they tend to offer the highest rewards. So if you have a high risk taking appetite, you should surely invest in an equity fund.
- Balanced Funds: One of the most stable and prudent investments, balanced funds vary the amount of investment that goes to different places. With the money paid through premiums, insurers invest in fixed component like corporate bonds and varied components like stock market. Balanced funds hence, fall in the medium-risk category.
ULIP Plans Classified on the Basis of Purpose
- ULIP for Retirement: This plan requires you to pay the premium during the tenure of your employment. This amount is automatically collected as your corpus and is used to purchase an annuity post your retirement.
- ULIP for Wealth Collection: People invest in this plan in order to accumulate wealth over a period of time. This is a highly recommended plan for millennials in their late twenties and early thirties, so that they have the flexibility to fund any future financial goal.
- ULIP for Children Education: Some ULIP plans also support a child’s education. These plans protect your child’s future in any unforeseen situation by pooling in some chunk of money. This ensures that the key events in your child’s life never face a financial crisis.
- ULIPs for Health Benefits: In addition to the above, certain ULIP plans also assist in providing money in case of medical emergencies.
Types of ULIP Plans – Classification by Death Benefit
- Types 1 ULIP Plans: Under Type-I ULIP, the nominee gets the higher of Sum Assured or Fund Value as a death benefit to the nominee. However, in case the assured dies in the initial years of the policy, when the fund value is lower than the sum assured, the insurer will pay the agreed sum to the assured’s nominee. But when the fund’s value is more than the sum assured, the death benefit is an accumulated amount in the fund.
- Types 2 ULIP Plans: The nominee of the policyholder gets the sum of both i.e. Sum Assured and Fund Value in the event of demise of the policyholder. Usually, the insurance company charges extra for the added risk it assumes under the type II policy, from the policyholder.
Benefits of ULIP
- Flexibility: ULIPs offer flexibility in the following ways:
- It allows the investor to switch between funds and match his funding needs.
- It allows the investor to make partial withdrawals; however, it may attract charges and is subject to certain terms and conditions.
- It allows the investors to make single additions to their premiums and increase their investments at any point of time, through the facility of top-ups.
- Transparent Structure: ULIPs allow you to keep track of your investment portfolio. They also intimate you of the percentage of premium that is invested along with the charges levied regularly. As an investor, you are also kept informed about the value and number of fund units that you hold.
- Fund Option Can be Chosen: When choosing a Unit Linked Insurance Plan, one can decide the various fund options, based on the risk taking appetite. In case you wish to gain higher returns and have the capacity to take higher risks for the same, you can choose to invest in an equity fund. Hence, if you win, you earn big. However, if you wish to take lesser risk and are satisfied with medium to low, you can choose to invest in a debt fund. ULIPs also provide hybrid funds which suit an individual investor’s needs.
- Rider Options for Additional Coverage: Along with investment benefits, ULIPs also provide rider options for additional coverage to take care of your loved ones. With rider options such as accidental death rider, critical illness rider and term rider, you can rest assured that ULIPs not only take care of your insurance needs but are also beneficial for your family.
- Tax Benefit: As ULIPs are life insurance products, they offer tax benefit in the form of tax-free maturity benefits and also on the death benefit and premiums paid.
How does a Unit Linked Plan work?
This total corpus is further divided into units with a certain face value. The insurer allocates ‘Units’ to each investor in proportion to the invested money. This units value is termed as ‘NAV’ or Net Asset Value. Every insurer has a fund manager to keep a track of the invested funds. Based on market performance, the units NAV either increase or decrease, resulting in a higher or a lower NAV.
On the maturity of the ULIP, the insurer pays you the fund value depending on the market value. In case of any unforeseen situation like death, the insurer pays your nominee the higher of the sum assured or the available fund value.
Best ULIPs in India in 2018
PLAN NAME | ENTRY AGE | MINIMUM PREMIUM | PLAN DESCRIPTION |
---|---|---|---|
HDFC Life Click2Invest | 0 to 65 years | Rs. 1000 to 24000 | HDFC Click to invest is a non-participating unit linked insurance plan that offers life insurance by HDFC Life. In this policy, the investment risk in investment portfolio is borne by the policyholder. The benefit of investing in this plan is that you get to choose from almost 8 fund options, have multiple premium payment options and the flexibility to choose your policy term. |
Bajaj Allianz Future Gain | 1yr to 60 years | Rs. 2500 to 25000 | Bajaj Allianz Future gain is a ULIP that helps you achieve your life goals by gaining maximum benefits at a nominal cost. You can choose from 7 funds to invest in and enjoy unlimited free switches between funds to optimise your investment. |
ICICI Prudential Life time Classic | 0 to 65 years | Rs. 30000 to 50000 | ICICI Prudential Life time Classic is a non-participating unit linked plan that lets you protect your loved ones by providing a life cover, creating wealth and saving for the future. The plan lets you select between 4 portfolio strategies based on your personal investment needs. |
PNB Metlife Smart Platinum | 7yrs to 70 years | Rs. 30000 to 60000 | This is a ULIP that lets you build your investment portfolio with the help 6 different funds. The plan offers coverage till 99 years of age with an option to choose a premium term of 5 years, 10 years of your entire lifespan. |
Max Life Fast Track Growth Fund | 18yrs to 50 years | Rs. 25000 to 100000 | With investment flexibility, Max Life Fast Track Growth Fund, aims to provide insurance options with a simple and safe approach to invest with multiple fund options in the market. The plan has 6 fund options, offers withdrawal benefits and tax benefits to the investor. |
How to Choose a ULIP?
- Policy Term Flexibility: Most Unit Linked Insurance Plans are long term and hence have a lock in period. Hence, before you invest, you must ask yourself- how long do you want your money to be invested in a policy? Based on the duration, you can choose from a number of ULIP Plans. Once invested, all ULIP plans have a five year of lock-in period.
- Investment Flexibility: ULIPs also allow you to choose the investment options before you select a plan. According to your risk bearing capacity, a buyer can choose to invest in equity, debt or a hybrid plan respectively.
- Based on Personal Investment Goals: Before you wish to invest in a ULIP, it is imperative to define your long term financial goals. More than anything, your long term goals should align with your ULIP investment so that you invest in the correct kind of plan.
- Compare ULIP Offerings: Choosing the best ULIP plan is easier with the help of comparing tool. Use these platforms to compare different unit linked insurance plans online.
ULIP Riders
Accidental Death and Permanent Disability Benefit Rider
If the life assured dies due to an accident during the policy duration, the life insurance company pays base plan sum assured plus the rider benefit to the nominee. This rider is basically to provide a supplementary coverage to the life assured’s loved ones. However, an accident may not necessarily result in the death of the victim, but leave the victim permanently disabled due to the loss of hands, legs, or both. This may result in a victim being a handicap or cripple. Consequently, the life assured won’t be able to work, earn money and pay the premium. In such a case, the life assured with an accidental total and permanent disability rider gets the rider cover.
Critical Illness Rider
Critical illnesses like cancer, heart attack, kidney failure, coronary artery bypass, paralysis, etc. are sometimes fatal, leaving the suffer unable to work further. Moreover, the treatment of such an illness is expensive. With a Critical Illness Rider on your side, all these expenses are compensated with a lump sum benefit given by the insurance company. The payout is made when the life assured is first diagnosed with any of the critical illnesses as mentioned in the policy document.
Term Rider
This type of rider offers a lump sum or monthly income to the nominee of the life assured, in case death of the life assured during the term of the policy. This is especially beneficial when the life assured was the only bread earner of the family. Term rider gives a stipulated amount every month to ensure that the assured’s loved ones are taken care of and monthly inflow of income continues to support everyday needs.
Waiver of Premium
Due to death (policyholder and insured are different), accidental permanent disability or critical illness, your earning potential is hampered, and income comes to a standstill. Consequently, you are incapable of paying premiums for the rest of the term. If you stop paying the premium, your policy terminates. Once the policy terminates, one cannot claim, which means there’s no maturity or death benefit. But with the waiver of premium rider, your premiums are waived off in the event of disability or critical illness during the term of your premium. Your policy continues with all benefits intact.
ULIPs vs Mutual Funds
POINT OF COMPARISON | ULIP | MUTUAL FUNDS |
---|---|---|
Type of product | Insurance + Investment. | Only Investment(no life coverage) |
Tax-savings | Premiums paid towards the plan up to Rs.1.5 lakh are eligible for tax deduction under the Section 80(C). The sum assured paid on death or the maturity benefit is also tax-free under the section 10(10D). | Only ELSS based investments are eligible for tax deductions up to Rs.1.5 lakh under the Section 80(C). |
Investment | Part insurance – life cover and part invested in equity, hybrid, debts, bonds, equity, etc. | Pure Investment. |
Insurance | Life cover is provided | No Life Cover |
Riders | Option to get comprehensive and complete protection by adding riders | Not Applicable |
Returns | Chances of moderate to high returns Net Asset Value (NAV) depends on the type of investment funds and on the performance of the market. | Chances of high returns. Equity-oriented investment gives high returns. Depends on the allocation of funds and market performance. |
Liquidity | Need to wait until completion of the lock-in period i.e. 5 years before exit. | More liquid, except with ELSS which have a lock-in period of 3 years. |
When to consider buying | When you want to provide financial security, and at the same time ready to accept investment risk. | When you have disposal money and wish to gain high returns. |
Tenure | Depends on the investor but for good returns on investment – 10 to 15 years. | No specified tenure |
Ideal Term | Long term. | Can be short, medium or long term. |
Ideal Time to buy | Can be bought anytime depending on the requirement and the amount one wishes to save. | When one has lesser financial burden and have disposable money. |
Switching Options | Flexibility in switching fund allocations. | No switching option |
Lock-in Period | 5 years | Most of the mutual funds typically do not have any lock-in period, except ELSS which have a lock-in period of 3 years. You can buy and sell mutual funds anytime, closed funds. |
Security | Investment Risk borne by Investor | Investment Risk borne by Investor |
Fund Management Charges | Higher in the initial years up to 5 years, and later on, 1.35% | Charges are 2.5% |
Eligibility Criteria and Documents Required for Unit Linked Plan
- One must meet the entry age criteria as mentioned in the policy wordings before purchase.
- One cannot extend beyond the maximum age allowed under a ULIP plan. To exit you must be below the maximum age mentioned in the ULIP plan.
- You must adhere to the plan’s premium payment term and mode.
Documents Required to Buy ULIP
- Income proof – Salary slips, income tax returns, bank statement, etc.
- Address proof – Driving License, Aadhar card, Voting card, passport, etc,
- Id proof – PAN card, Aadhar card, voting card, etc.
- Age proof – Aadhar card, voting card, passport, driving license, etc.
Why should you buy ULIP?
- Dual Benefit: A Unit Linked insurance Plan is one of a kind Life Insurance plan where a policyholder has the dual benefit of investment as well as life cover.
- Systematic Savings: Some people often tend to postpone saving for major future needs like child’s college education, future mortgage payments or even retirement funds. This can be avoided by buying a Unit Linked Plan which ensures that you save systematically for your future needs.
- Tax Benefits: ULIPs are a superb combination of returns and protection. They offer tax exemption under Section 80C and 10(10D) of the Income Tax Act, 1961.
- Choose the type of Fund: Not everyone is willing to take a risk with their hard earned money, this is where a ULIP is the best option to choose as a Life cover. Depending on the financial needs and risk appetite a policyholder can choose to invest in cash funds, equity, balanced funds etc.
- Freedom to switch between Funds: Depending on the constantly changing life situations and financial needs, the risk appetite of a person may also change. ULIP offers the freedom to switch between types of funds in such situations.