What Makes ULIPs One of The Best Tax-Saving Instruments?
Everybody wants stability in their life, whether physically, mentally, emotionally, or financially. To achieve this stability, you work hard. But we are living in the century, where all-in-one products are trending worldwide such as- a watch, that can track your calories as well as give you the right time. If you are not providing multiple features, people will show no interest in you.
Similarly, in the field of insurance, people want something that not only helps them to secure their family’s future financially but also help in wealth creation and tax-savings.
What if I tell you there is such all-in-one plan that will provide you with all the benefits and more. ULIPs plans will help you with insurance, wealth creation, and tax-savings. Here’s how:
ULIP plans are the insurance-cum-investment plan that offers twin benefit, where one part of your premium is invested in equity or debts (depending on your risk appetite), and another part will provide financial security to your loved ones. Hence, you can enjoy the benefits of both insurance and investment via the same product.
ULIPs come with a lock-in of five years. Investing in a single ULIP helps as it is a long-term insurance contract.
Other investing instruments such as ELSS comes with a short lock-in period of 3 years, but the money you invested in the first year will be available to you in the fourth year. However, in the case of ULIPs, the lock-in is calculated from the date the policy is issued. You can pay the monthly or annually as a lump sum.
Under ULIPs plans, your money is invested in reliable investments such as equities and bonds. Hence, you can earn market-linked returns, which you’ll not find in traditional life insurance. One must know that investing in equity funds comes with high risk. So research before investing in equity to get maximum returns.
Also, the maturity amount is tax-free, which makes ULIPs a better choice among its peers.
ULIP plans are flexible as they allow you to switch between your investment funds with ease. You can change the proportion of your premium allocation according to your requirements and needs.
In the time of crisis or need, you can also withdraw a part of your funds, subject to certain terms and conditions. You have an option of switching funds during the policy term and choose among equity, balanced, growth, income funds as per your needs or risk appetite.
Having a ULIPs plan gives you multiple benefits; one of them is tax-savings. Many people might not be aware that the premium that you will pay towards a ULIP plan is eligible for tax deductions under section 80C of the income tax act, 1961. With the introduction of LTCG in 2018, ULIPs plan is a prime option for investors as it provides tax-benefits, which other investments don’t.
Also, the returns that you will get on maturity are exempt for tax deductions under section 10 (10D). Not many plans offer this kind of dual benefit.
ULIPs – A Tax-Friendly Plan For You
Buying ULIPs plan will not only provide you with life insurance benefits but will also, help you with wealth creation and offers multiple tax benefits. This insurance-cum-investment plan will replace you as a bread earner of the family, in case of your untimely demise. ULIPs plans from reputable insurers such as Max Life Insurance offers the best ULIPs plan that there is, which provides insurance cover with added returns on investments. ULIPs plans also offer tax benefits under section 80C and 10 (10D).
Buy ULIPs plan now and get your family and earnings secured.
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