ULIP: Unit Linked Insurance Policy >> Some Portion of Your Insurance Premium Invested in Stocks. 5 years lock-in period. charges: Policy Admin charge 50-500 per month, insurance admin, premium allocation 1-2%, mortality fees, etc. then remaining invested in insurance and units Not Clearly: Taxes: Tax: exemption under Section 80C, But returns may taxable if premium more than 10% of Sum Assured refer Section 10(10D).
ELSS: 100% Amount of Invested stocks. 3 years lock-in period. Charges: Maintenance fee: 1-2%. Tax: Section 80C & LTCG (no tax up to 1 lakh).
ULIP vs Term + ELSS
Mixing Insurance and investing yields low returns. it’s bettter to use insurance and inestment spearte.
instead of taking ULIP buying a Term policy and ELSS scheme would be better. because of insurance charges & commissions.
The Returns & Investments are tax-free in ULIP beyond some conditions. whiles elss above 1 lakh charges at 10%LTCG tax with no indexation we can choose dividend option.
ULIP vs SIP, PPF, Mutual Funds FD, Term Plan, LIC, Endowment Plans
SIP(Systematic Investment Plan): It’s not an investment scheme or a mutual fund scheme. its type of investment plans
Just like RD or Recurring deposit or CHit Funds or EMI.
every month we have to pay some amount for a certain period to reach our financial goals.
another opposite is lump sum it means to invest a large amount of money at a time instead of monthly investing.
FD fixed Deposit: its lump sum investment to get returns either periodically or at mature time.
PPF: Long term saving scheme at 7%* or 15 years wile ULIP is jus for 5 years and insurance based investment returns at 12-15%.
Term Plan: paying just for insurance coverage no returns. very less compared to Endowments plans.
Endowment Plans: Long term Insurance plans for more than 15 years. which offers insurance cum savings
While returns are 4% may not beat inflation rates and ULIP has a problem of the risk of returns. but the average returns are above endowment plans.
Recurring Deposit may yield your 6-7% while 7-8%, without no risk, Mutual funds -2-15% or up to 25% no guarantee. endowment plans cover insurance + savings and final returns 4% avg.
also, check the comparison of all saving schemes.