Young Investor's Guide - What you Must Know About ULIPs
ULIPs offer the feature of fund switches between multiple fund options. This means that the policy holder can switch between fund options depending on how a particular fund is performing at the market. The insurers provide this switch option free of any cost up to a maximum of 10 or even 12 switches. After this, a nominal fee for switching between funds is charged.Therefore, ULIPs are very flexible in terms of the customerâ€™s preferences and offer a credible flexibility that allows the policy holder to make informed decisions.
The investment fund options offered by ULIPs cover both equity and debt-based instruments. Therefore, the overall gains earned from a ULIP are stable and optimum in the long run.
When you invest in a ULIP, a part of the premium paid is channelized towards maintaining the life coverage while the other part is channelized towards the diverse fund options for the purpose of fund-growth through investment.Among these fund-options, there is an option that enables you to switch, based on the fund-performance at the market. Therefore, if the policy holder is not satisfied with the returns from a fund option in which she/he has invested, she/he can always switch over to the other fund option. This ensures a stable rate of fund management and growth.However, it must be kept in mind that these free switches are limited and the number of switches varies from one insurer to another. Once this number is exhausted, a nominal fee is levied by the insurer for further switches.
the payable contributions towards ULIPs are tax-exempt under Section 80C and Section 10D of the Income Tax Ac. 1961. As per the government mandate, the (LTCG) tax is not applicable for investments made in ULIPs thereby enhancing the tax-efficiency of ULIPs. As mandated by the Income Tax Act, 1961, the payable contributions towards ULIPs are tax-exempt under Section 80C and Section 10D. As per the revised rules under the government directives, ULIPs have been kept exempt from LTCG (Long Term Capital Gains).
A ULIP is a platform for insurance and investment that offers insurance benefits and at the same time, acts as a medium of growth for your funds through investment options. ULIPs have a lock in period of five years (earlier it was three years) and is suitable for specific financial goals over a period of time. There are tax benefits Tax saving is a very crucial factor for deciding the overall returns from an investment and this is where ULIPs score over various other investment options like Mutual Funds.
HDFC Life offers HDFC Life Click 2 Invest ULIP â€“ an online unit linked plan that offers market-related benefits and helps you grow your funds at a stable rate. For details, click on the mentioned link: https://www.hdfclife.com/savings-plans/sanchay-plus .
- 4 Reasons to Invest In ULIP Plans Today Itself
- ULIP Terms You Should Be Familiar With
- How to Choose ULIP Plan in India - Complete Guide
Income Tax Slab 2021-22
February 17, 2020
Income Tax Return Guide - Details You Should Know
November 07, 2016
Best Tax Saving Investment Options in 2022 (FY 2022-2023)
November 08, 2016
Subscribe to get the latest articles directly in your inbox
14 Best Investment Options In India
October 30, 2018
Short Term Investments: Top 11 Short Term Investment Options For 2022
November 08, 2016
Insurance vs Investment - Did You Get the Right Financial Plan?
November 05, 2018
Popular & Recent Articles
How to Plan for Retirement as Per your Age
"The thumb rule for retirement planning is - the earlier you start, the more you save. However, with age, your priorities change too. So, you need to factor in the cost of living in the present vis- a -vis future."
HDFC Life Insurance Company Limited. CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101.
Registered Office: Lodha Excelus, 13th Floor, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011. Email: [email protected], Tel No: 1800-266-9777 (10 am to 7 pm). The name/letters “HDFC” in the name/logo of the company belongs to Housing Development Finance Corporation Limited (“HDFC Limited”) and is used by HDFC Life under an agreement entered into with HDFC Limited.
For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale.
|BEWARE OF SPURIOUS PHONE CALLS AND FICTIOUS/FRAUDULENT OFFERS