Finance

Learn how you can leverage ULIP as an excellent tax-saving investment

The ULIP Plan is an investor’s top choice to make savings on taxes. It’s a policy that provides you combined benefits of both life protection and wealth creation for your future. There’s barely any other plan that offers benefits like a ULIP plan.

If you lock in your investments for the same period in ULIPs, post offices, and NSC, you’ll still get better returns from the former as compared to the latter two. It offers several tax benefits on not only the premiums that you pay but also the maturity benefit that your dependents will receive.

Along with its amazing tax-saving capabilities, the plan offers various other benefits such as good returns and a small lock-in period. This article will be concerned mainly about the amazing tax-saving benefits of the Unit Linked Insurance Plan.

What is a Unit Linked Investment Policy?

Abbreviated as ULIP, the Unit Linked Investment Policies are investment plans that allow you to create wealth for your future while covering the financial needs of your family after your absence through a life cover.

These policies require you to dedicate a small part of your premiums for your life cover and use the rest of your financial resources in a common money pool known as the fund. This generated pool of funds is invested in debt, equity, or even both.

The returns that you receive through this policy are entirely dependent on the performance of the funds that you’ve chosen under your plan. They’re ideal to plan for a financially free future and safeguard the wellbeing of your family.

Tax Benefits of Unit Linked Insurance Plans

1. Savings on Premiums

The premiums that you pay during the tenure of your policy are eligible for tax deduction benefits of up to Rs. 1.5 Lakhs as per the section 10D and 80C of the Income Tax Act of India. Moreover, to be eligible for these benefits, make sure your plan follows a lock-in period of at least five years.

You might get fascinated to know that it’s the only market-linked investment plan that allows you to gain tax benefits even at the maturity of your plan. In this way, you’re technically saving taxes through two channels – while receiving maturity amount and while paying premiums.

2. Deductions for Top-Ups

With the help of Unit Linked Insurance Plans, investors have the liberty to grow their investment amount through periodic top-ups. As an added benefit, even these top-ups can be availed for tax deduction benefits under section 80C and 10D of the Income Tax Act.

It also provides you protection from taxes on your long-term capital gains through your plan. Furthermore, while the profits that you earn through mutual funds and stocks are prone to LTCG tax for Rs. 1 Lakh or above, there is no such liability on ULIPs.

3. Long-Term Benefits

If you’re looking for a reliable long-term investment plan that helps you gain tax benefits, ULIPs are certainly a perfect match for you as these plans require a minimum lock-in period of five years. In case you choose to extend it even further, you’ll receive even more benefits with time.

That’s why they’re considered better tax-saving tools than mutual funds, traditional insurance, and PPFs. Additionally, life insurance also provides you coverage for your life, it will never help you to generate wealth for a financially secure future.

On the other hand, mutual funds may help you secure a good amount of money for your future through good returns, but it does not provide you any coverage for your life, and nobody knows when something unprecedented happens.

The benefits offered by ULIP plans ate perfectly to gain the best of both worlds and provide you a fair advantage over other investment plans. So, if you want to make your future and life financially secure, make sure you take a look at ULIP investment plans.

Best ULIP Plans in India

1. Bajaj Goal Assure Plan

Bajaj Allianz provides a unit-linked plan known as Life Goal Assure Policy that allows you to accumulate funds for your future. It allows you to invest in over eight options, along with a wide range of benefits like four different types of investment strategies, life cover, and tax-free returns.

The plan also offers the facility of partial withdrawals after completing the lock-in period of five years for the policy, based on a set of conditions. Moreover, you can also change your premium payment frequency as per your preferences anytime.

2. PNB MetLife Smart Platinum

The Smart Platinum Unit Linked Insurance Plan offered by PNB MetLife offers you six fund options to choose from and allows you to enhance your investment portfolio to a great extent. Moreover, it provides you protection until 99 years, and you can even choose to pay premiums throughout your life.

You can also shift either fully or partially through the various options of the funds available at any instant of time. The tax benefits of this plan can be availed right after you purchase the plan and make payment for your desired benefits.

3. Canara HSBC Oriental Bank of Commerce Invest 4G Plan

If you need a Unit linked Insurance Plan that helps you reach your investment goals with good returns for protecting your family financially in the future, then this plan by Canara HSBC Oriental Bank of Commerce fits the bill for you. It offers a plethora of customization options that you can use to personalize your plan as per your financial goals and requirements.

Moreover, the plan also allows you to enhance your investment portfolio through numerous funds to choose from. With this plan, you can have full control over all your investment and savings needed to make sure your future is completely financially secure.

The Takeaway

There are several investment instruments available in the market. However, not every policy offers you the combined benefits of investments and life cover. ULIP plans are famous for their tax-saving benefits. The advantages listed above are extremely hard to find in other plans. Therefore, make sure you must invest in a Unit Linked Insurance Plan for the betterment of the future of your family.The ULIP Plan is an investor’s top choice to make savings on taxes. It’s a policy that provides you combined benefits of both life protection and wealth creation for your future. There’s barely any other plan that offers benefits like a ULIP plan.

If you lock in your investments for the same period in ULIPs, post offices, and NSC, you’ll still get better returns from the former as compared to the latter two. It offers several tax benefits on not only the premiums that you pay but also the maturity benefit that your dependents will receive.

Along with its amazing tax-saving capabilities, the plan offers various other benefits such as good returns and a small lock-in period. This article will be concerned mainly about the amazing tax-saving benefits of the Unit Linked Insurance Plan.

What is a Unit Linked Investment Policy?

Abbreviated as ULIP, the Unit Linked Investment Policies are investment plans that allow you to create wealth for your future while covering the financial needs of your family after your absence through a life cover.

These policies require you to dedicate a small part of your premiums for your life cover and use the rest of your financial resources in a common money pool known as the fund. This generated pool of funds is invested in debt, equity, or even both.

The returns that you receive through this policy are entirely dependent on the performance of the funds that you’ve chosen under your plan. They’re ideal to plan for a financially free future and safeguard the wellbeing of your family.

Tax Benefits of Unit Linked Insurance Plans

1. Savings on Premiums

The premiums that you pay during the tenure of your policy are eligible for tax deduction benefits of up to Rs. 1.5 Lakhs as per the section 10D and 80C of the Income Tax Act of India. Moreover, to be eligible for these benefits, make sure your plan follows a lock-in period of at least five years.

You might get fascinated to know that it’s the only market-linked investment plan that allows you to gain tax benefits even at the maturity of your plan. In this way, you’re technically saving taxes through two channels – while receiving maturity amount and while paying premiums.

2. Deductions for Top-Ups

With the help of Unit Linked Insurance Plans, investors have the liberty to grow their investment amount through periodic top-ups. As an added benefit, even these top-ups can be availed for tax deduction benefits under section 80C and 10D of the Income Tax Act.

It also provides you protection from taxes on your long-term capital gains through your plan. Furthermore, while the profits that you earn through mutual funds and stocks are prone to LTCG tax for Rs. 1 Lakh or above, there is no such liability on ULIPs.

3. Long-Term Benefits

If you’re looking for a reliable long-term investment plan that helps you gain tax benefits, ULIPs are certainly a perfect match for you as these plans require a minimum lock-in period of five years. In case you choose to extend it even further, you’ll receive even more benefits with time.

That’s why they’re considered better tax-saving tools than mutual funds, traditional insurance, and PPFs. Additionally, life insurance also provides you coverage for your life, it will never help you to generate wealth for a financially secure future.

On the other hand, mutual funds may help you secure a good amount of money for your future through good returns, but it does not provide you any coverage for your life, and nobody knows when something unprecedented happens.

The benefits offered by ULIP plans ate perfectly to gain the best of both worlds and provide you a fair advantage over other investment plans. So, if you want to make your future and life financially secure, make sure you take a look at ULIP investment plans.

Best ULIP Plans in India

1. Bajaj Goal Assure Plan

Bajaj Allianz provides a unit-linked plan known as Life Goal Assure Policy that allows you to accumulate funds for your future. It allows you to invest in over eight options, along with a wide range of benefits like four different types of investment strategies, life cover, and tax-free returns.

The plan also offers the facility of partial withdrawals after completing the lock-in period of five years for the policy, based on a set of conditions. Moreover, you can also change your premium payment frequency as per your preferences anytime.

2. PNB MetLife Smart Platinum

The Smart Platinum Unit Linked Insurance Plan offered by PNB MetLife offers you six fund options to choose from and allows you to enhance your investment portfolio to a great extent. Moreover, it provides you protection until 99 years, and you can even choose to pay premiums throughout your life.

You can also shift either fully or partially through the various options of the funds available at any instant of time. The tax benefits of this plan can be availed right after you purchase the plan and make payment for your desired benefits.

3. Canara HSBC Oriental Bank of Commerce Invest 4G Plan

If you need a Unit linked Insurance Plan that helps you reach your investment goals with good returns for protecting your family financially in the future, then this plan by Canara HSBC Oriental Bank of Commerce fits the bill for you. It offers a plethora of customization options that you can use to personalize your plan as per your financial goals and requirements.

Moreover, the plan also allows you to enhance your investment portfolio through numerous funds to choose from. With this plan, you can have full control over all your investment and savings needed to make sure your future is completely financially secure.

The Takeaway

There are several investment instruments available in the market. However, not every policy offers you the combined benefits of investments and life cover. ULIP plans are famous for their tax-saving benefits. The advantages listed above are extremely hard to find in other plans. Therefore, make sure you must invest in a Unit Linked Insurance Plan for the betterment of the future of your family.

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Shankar

Shankar is a tech blogger who occasionally enjoys penning historical fiction. With over a thousand articles written on tech, business, finance, marketing, mobile, social media, cloud storage, software, and general topics, he has been creating material for the past eight years.

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