| All investment instruments have their unique set of | | | | (also referred to as equity-linked savings schemes) |
| advantages to offer. It is vital for investors to be | | | | are eligible for Section 80C benefits. |
| aware of the nuances in a particular offering and | | | | ULIP vs REGULAR INSURANCE POLICY |
| make informed decisions. | | | | ULIP’s and Traditional policies both work alike. |
| When investing in a Unit Linked Insurance Plan, | | | | A part of the premium is set aside for life cover and |
| popularly called ULIP, it is to be borne in mind that | | | | the rest is invested in a fund after deducting charges. |
| ULIP’s being a market linked instrument will | | | | The main advantage of a ULIP is that the investor |
| fetch good returns on a long term basis. The basic | | | | knows exactly about the break-up of his premium |
| advantage of a ULIP over other investment | | | | into life cover, the fees being paid and the amount |
| instruments is that it offers the twin benefits of life | | | | being invested in a fund. The performance of the |
| insurance as well as an investment. Apart from that, | | | | funds can also be tracked as the returns are linked |
| there are a number of ways in which ULIP’s | | | | to the market performance. |
| can prove to be advantageous over Mutual Funds, | | | | On the other hand, in traditional policies, no |
| Regular Insurance Policies and Fixed Deposits. | | | | information about the break-up of charges is shared |
| Let’s analyze: | | | | with the investor. He also does not know whether |
| ULIP vs MUTUAL FUND | | | | the bonuses paid to him every year are all that his |
| 1. Flexibility on Mode of Investment/investment | | | | fund has made or whether the company is giving him |
| amounts | | | | only a share of the profits. |
| ULIP provide the flexibility to alter the premium | | | | Policies encourage savings whereas ULIPs take the |
| amounts during the policy's tenure. Surplus funds can | | | | investment path and hence have higher growth |
| be used to enhance the contribution thereby ensuring | | | | options. |
| that the funds are gainfully invested. Alternatively, | | | | ULIP vs FIXED DEPOSIT |
| lower payments can be made when faced with a | | | | There is always a degree of risk, however small, |
| liquidity crunch (the difference being adjusted in the | | | | involved in a ULIP. Traditionally, investors preferred |
| accumulated value of the ULIP). This option of | | | | investing in safer instruments like Fixed Deposits, |
| modifying premium payments at one’s | | | | despite the lower returns. But Fixed Deposits are able |
| convenience clearly gives ULIP an edge over Mutual | | | | to only beat the inflation. |
| Funds. | | | | On the other hand a ULIP is a market-linked plan with |
| 1. The cost factor for altering Asset Allocation | | | | an equity exposure. A plan with an equity exposure |
| In Mutual Funds, shifting the corpus into a debt from | | | | for a long term usually consistently gives better |
| the same fund house will involve an exit load and/or | | | | returns than any other asset like Fixed Deposit or |
| entry load. | | | | Bonds. |
| On the other hand, in a ULIP, the option to invest | | | | Why Choose Bajaj Allianz iGain as your ULIP plan? |
| across asset classes as per your convenience is very | | | | - iGAin is India’s 1st completely online Ulip. It |
| cost-effective. Most insurance companies allow | | | | does not have an intermediary – you are the |
| shifting the investments across various plans/asset | | | | sole beneficiary. |
| classes either at a nominal or no cost. | | | | - iGain is a market linked plan that offers market |
| This can prove to be very useful. For example, in a | | | | exposure with built-in investment advice. For those |
| bull market when the ULIP investor's equity | | | | who find investing and insuring as Greek and Latin, |
| component has appreciated, he can book profits by | | | | there is the Wheel Of Life Portfolio Strategy. |
| simply transferring the requisite amount to a | | | | iGain’s investment officers will select and |
| debt-oriented plan. | | | | invest in the appropriate funds to balance and |
| 3. Tax Benefits | | | | safeguard your investment. |
| ULIP’s qualify for tax benefits under Section | | | | - From the 11th year onwards, iGain increases the |
| 80C of the Income Tax Act. This holds good for any | | | | allocation of units by 2% to enhance your |
| kind of plan chosen by the investor. | | | | investments. So while you pay a 100% premium, |
| In Mutual Funds, only investments in tax-saving funds | | | | 102% of it is invested. |