Introduction to ULIP:
ULIP combines life insurance with investment options, allowing policyholders to secure their family's future while growing their wealth.
Investment Component:
Funds from premiums are invested in equity, debt, or balanced funds based on risk appetite and financial goals.
Types of ULIPs:
Equity-Oriented, Debt-Oriented, Balanced, Cash Funds cater to varying risk profiles and investment objectives.
Tax Benefits:
Enjoy tax deductions under Section 80C on premium payments, up to INR 1.5 lakhs per annum.
Flexibility:
Switch between investment funds to optimize returns according to market conditions and personal financial strategy.
Lock-in Period:
Typically 5 years, encouraging long-term wealth accumulation and disciplined investing.
Recent Taxation Changes:
From 2021, ULIPs may face capital gains tax if annual premiums exceed INR 2.5 lakhs, aligning with other market-linked investments.
Comparison with Mutual Funds:
Offers insurance coverage unlike mutual funds, with tax benefits but a longer lock-in period.