As investors, we like to compare different investment products while making an investment choice. Most of us compare different products on their returns. We look at 3-year, 5-year, 10-year returns. We look at rolling returns for various horizons. That is good. However, we must also look at the way the performance is reported. You may not get what is reported. In this post, … [Read more...] about Mutual Funds, ULIPs, NPS, PMS: How is return performance reported?
One big advantage that ULIPs have over equity mutual funds is that the maturity proceeds from ULIPs are exempt from tax. On the other hand, the long-term capital gains on the sale of equity mutual funds are taxed at 10%. LTCG on sale of debt mutual funds is taxed at 20% after indexation. In an earlier post, I highlighted why I still prefer mutual funds over ULIPs. I don’t deny … [Read more...] about If you are old, avoid ULIPs
Budget 2018 proposed long-term capital gains tax on equity investments. The very next day, the insurance companies were out with advertising campaigns highlighting the tax advantage of ULIPs over mutual funds. Well, mutual funds and ULIPs compete for investor money. And it is not unfair on the part of insurance companies to highlight any demonstrable advantage that they may … [Read more...] about After tax on LTCG, are ULIPs better than Equity Mutual Funds?
A top-up premium is an investment that you make in your ULIP (Unit Linked Insurance Plan) over and above your contracted premium. There is no compulsion to make such an investment. If you are paying top-up premium, you are paying it of your own free will. In this post, let’s look at why you should avoid topping up your Unit-Linked Insurance Plan (ULIPs). What are the problems … [Read more...] about Why you should avoid topping up your ULIP policy?
Yes, your age at the time of purchase affects the return that you earn in investment and insurance combo products such as traditional life insurance plans and ULIPs. Everything else being same, lower the age at the time of purchase, better will be your returns. It is best to understand this with the help of examples. Let’s first start with a traditional plan. How your age … [Read more...] about With Traditional Life Insurance plans and ULIPs, your Age affects the returns
Many of us realize that investments and insurance shouldn’t be mixed. You will get low life cover and poor returns, especially with traditional life insurance plans. If you are young and make such mistakes, you still have time to make up for such mistakes. However, if you are retired or close to your retirement, the hit to your finances will be much bigger. It is not just … [Read more...] about You may not need Life Insurance during Retirement
The tax on LTCG from equity funds was introduced in Budget 2018. This made ULIPs attractive to a number of investors. The insurance companies have jumped onto this opportunity and have launched a number of Unit-Linked Insurance Plans or ULIPs. In this post, let's look at the two broad categories of ULIPs. Type I and Type II ULIPs. The only difference between the two types … [Read more...] about Variants of ULIPs you must be aware of
Every parent wants the best for his/her child. It is every parent’s wish that financial constraints do not come in way of his/her child’s education or career. Hence, when you are approached with a specific investment plan to provide for your child’s future education or wedding expenses, the product becomes too irresistible to ignore. The sales pitch is so strong that you start … [Read more...] about Unit linked child plans: Should you buy?
It is that time of the year again when you have to submit investment proofs to your employer to get tax benefits under section 80C. In this article, we discuss ULIP (Unit Linked Insurance Plans), insurance cum investment products that qualify for tax benefits under section 80C and whether you should go for ULIPs. We will discuss various cost elements, maturity and death … [Read more...] about ULIPs < Mutual Funds + Term insurance