For someone looking to save for long term goals through Ulips, there are few important things to consider before buying them. Read on to know them.
Starting this financial year 2017-18, two of the most popular investments - equity mutual fund (MF) and unit-linked insurance plan (Ulip) will be in focus largely because of the tax advantage that Ulips will score over MF’s. Finance Bill 2018 has taxed the long-term gains on equity shares and equity MF (over Rs 1 lakh in a year) after holding period of 12 months. However, long term gains made in Ulips, which can be called as mutual fund wrapped around with insurance, remains tax exempt.
Whom does Ulip suits?
Investing in Ulips to meet long-term goals might not suit everyone. Those who lack financial discipline and are unable to manage protection and savings separately, Ulips fits the bill. Ulips have a lock-in period and therefore longer horizon instils investing habit in investors.
Many investors who are in a position to identify the right mutual funds schemes for their needs and simultaneously get a protection through a pure term insurance plan may easily avoid Ulips. They should continue to invest through equity mutual funds to met long-term goals after proper selection of schemes and doing asset allocation on regular basis.
For a long-term investor in equity related investment such as equity mutual fund (MF) and unit-linked insurance plan (Ulip), it is important to stay invested till the goal is achieved. While both MF and Ulips can help in deriving the benefits out of equity as an asset class, it is the Ulips that are structured for long term benefits more than MF’s. While MF’s are open-end and can be redeemed anytime, the investments in Ulips have a lock-in of five years.
Using Single Ulip for Lifetime
Some of the long-term goals could be buying arranging a down payment for home loan, funding of children education, marriage, or planning for one’s own retirement. All of these are possible to meet through a single Ulip.
Bu hikaye Investors India dergisinin April 2018 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Investors India dergisinin April 2018 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Giriş Yap
How To Build And Maintain A Long-Term Portfolio
Building a robust long-term portfolio involves two steps. First, you must decide on your asset allocation-essentially the distribution of your investments across various asset classes such that it aligns with your financial goals and risk tolerance.
Learn The Magic Of Self-Talk
There is perpetual self-talk taking place inside all of us
Health Cover: How Family Floater health insurance plans work to your advantage?
The right amount of health insurance coverage can help you stay on track with your finances and life goals. In the absence of health insurance, one may be forced to delve into current investments, jeopardising ambitions such as children's education and home ownership.
Empowering Women: Understanding Inheritance Rights in India
In the intricate tapestry of India's diverse inheritance landscape, where the threads of religious laws weave a complex pattern, don't entrust your legacy to fate's capricious hand. Instead, wield the brush of certainty by crafting your will.
Protecting Those Who Matter Most: Understanding the Importance of Life Insurance for Our Loved Ones
Mr. Sanjiv Bajaj is the Jt. Chairman & MD, Bajaj Capital, building the platform for the Business leaders of the Financial Services and Advisory sector to exchange their vision, experience, and views on making the right financial decisions.
Unit-Linked Insurance Plans: How to make use of ULIPS to meet long-term goals?
Unit-linked insurance plans, or Ulips, are a good option if you wish to combine life insurance with savings for long-term goals in one financial plan.
Why Should One Consider Investing In A Large Cap Fund?
An investor’s ability to create wealth in the longterm is directly linked to how well they create an all-weather investment portfolio.
Meeting Medical Costs with Health Insurance Plans
A medical emergency can occur at any time and to any person.
Water: The Elixir of Life
If there is magic on the Planet Earth, it is contained in water - Loran Eiseley.
The 100 Crore Wealth Legacy! A Vision
Generating 100 crores from modest investments is feasible with a long-term outlook, though market timing remains elusive.
