Even though ULIPs (Unit Linked Insurance Plans) and Mutual Fund Plans are very different in terms of their core offerings, they do have some similarities. While ULIPs serve a dual purpose of life insurance + investment, mutual funds are pure investment products.
Let us learn more so that you can make an informed choice:
Investment vs. Investment + Insurance
Insurance + Investment Plan
|How it Works||In an insurance + investment plan, part of the premium is allocated towards life cover while the rest is invested. Unit Linked Insurance Plan (ULIPs) offers this solution.
Learn more about how investment plus insurance plans work
|An investment instrument's only purpose is the growth of the capital invested. Almost the entire amount paid is invested.
Based on one's investment objective, a fund with a suitable proportion of equity and debt can be chosen
|Key Benefit||Life cover + investments and other benefits||Long-term wealth creation|
|Tax Benefit (Up to Rs. 46000 a year)||Premium paid towards a ULIP is available for deduction under Sec. 80C. The Income Tax Act also allows exemption on partial withdrawal or maturity amount under Sec. 10(10D)||Only the investments in an Equity Linked Savings Scheme (ELSS) are eligible for tax deduction under Sec. 80C|
|Investment Charges||Fund management charges are deducted from the invested amount. Since ULIPs have an insurance component, it charges a little higher than those for mutual funds||Fund management charges, loads (entry and exit), transaction charges, etc., are deducted from the invested amount|
Which one is better?
While investing for your children, you aspire to provide a tidy nest egg for their future and safeguard them against any unforeseen circumstances. Investment for the future is paramount, but what better than providing an insurance cover as well. If you are looking for something similar, Max Life Shiksha Plus Super may solve your worries and prove to be a good financial instrument.
Max Life Shiksha Plus Super (UIN: 104L084V04) is a Unit-Linked Non-Participating Individual Life Insurance Plan
Max Life Platinum Wealth Plan (UIN: 104L090V04) is a Unit-Linked Non-Participating Individual Life Insurance Product
Life insurance coverage is available in this product. In this policy, the investment risk in the investment portfolio is borne by the policyholder.
The linked insurance products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender/withdraw the monies invested in linked insurance products completely or partially till the end of the fifth year.
Unit Linked Insurance Products (ULIPs) are different from the traditional insurance products and are subject to the risk factors. The premium paid in the Unit Linked Life Insurance Policies is subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Max Life Insurance is only the name of the insurance company and <Product Name> is only the name of the unit-linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these funds, their future prospects or returns.