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Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.
Kotak e-Invest is a comprehensive Unit Linked Life Insurance Plan that can be customized as per your goals and needs - be it protection; investment; financial security for child or retirement planning.
Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and insurance cover against any eventuality.
Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!
The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.
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advantages of ULIP, pros and cons of unit-linked insurance plan, disadvantages of ULIP
Unit Linked Insurance Plans (ULIPs) are insurance types that combine investing and insurance into one package. Policyholders must pay a premium monthly, semi-annually, or annually for a term of 5-15 years. The inclusion of long-term capital gains on equities and equity-related investments, tax-free at maturity, gives ULIPs a competitive advantage. In addition, it’s an exempt-exempt-exempt product. ULIP tax benefits allow investors to claim a tax deduction of up to ₹1.5 lakhs annually u/s 80C of the Income Tax Act, but only provided the premium does not exceed 10% of the total insured amount.
ULIPs are becoming more popular as an investment option. If you’re a first-time investor, ULIPs may be the best choice because they offer a lot of flexibility while still reducing your risks. However, before investing, it is only fair to understand the pros and cons of Unit-Linked Insurance Plans.
ULIPs are ideal for consumers who want to put money down for a long-term objective since short-term market volatility provides lower returns, but long-term market investments produce very attractive returns.
Tax-free and tax-advantaged returns are available through ULIPs. The premiums paid for ULIPs are tax-deductible, and the death payments received are also tax-free. The assured payout or the fund’s value of investments is also available to the policyholder, and these returns are not taxed.
After the lock-in period, policyholders can make partial withdrawals as long as they don’t exceed 20% of the policy’s fund value. Furthermore, these withdrawals are not subject to taxation.
ULIPs can generate good returns depending on the fund in which one invests. For instance, if the fund invests heavily in the capital markets, it will benefit from rising stock prices.
Investors can swap between investment funds as their goals and needs change with ULIPs. They can profit from stock price fluctuations by rotating between equities, debt, and cash.
Due to expenses charged on the investor that go toward policy charges, ULIPs are more expensive in the first few years.
Due to market fluctuations, investors should expect lower gains in the early years. So, if you’re aiming to make a short-term investment, ULIPs aren’t the best option.
Most insurers provide free switches up to a certain number of transactions, which are paid per transaction.
ULIPs have a five-year lock-in term during which no withdrawals are allowed.
Unit-Linked Insurance Plans provide you with the best of both worlds: insurance and returns. If you have invested in a ULIP that holds a significant amount of money in shares, you are taking a risk. However, your fund could earn a higher return if capital markets perform well. On the other hand, if you are planning to make an investment in securities that provide a variety of rewards all in one place, ULIPs are ideal. However, because the functions of investments and insurance are so diverse, it is typically recommended that they be maintained separately.
With thoughtful investment planning, you can avoid the disadvantages of ULIPs and avail yourself of numerous benefits.
- A Consumer Education Initiative series by Kotak Life
The Kotak Term Plan is a pure risk cover plan and an economical way of providing an adequate level of financial protection.Know more
Kotak Single Invest Advantage is a hassle-free unit linked plan, where you invest once and reap the benefits throughout the policy term.Know more