What is the difference between Life Insurance and ULIP?
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

What is the difference between Life Insurance and ULIP?

What is the difference between Life Insurance and ULIP?
  • 2nd Mar 2022 |
  • 661

When it comes to safeguarding your loved ones’ future, you seek out the best option possible. For the same, debating the differences between the best investment plans is a constant, such as - ‘what is the difference between the best ULIP plan and life insurance?’ In this article, we’ll look at both tools in depth to help you make the best decision that’s both financially sound and is aligned with your needs.

The Basics of Unit Linked Insurance Plan

A ULIP, or unit linked insurance plan, is a financial instrument that combines insurance with investing. The balance of the ULIP payment is allocated to funds of your choice after the mortality cost or insurance is deducted. The purpose of ULIPs is to assist you in accumulating money and assets. They are market-dependent as the market conditions define their results.

Sustainability Factor

If you’re looking for a long-term investment, ULIPs are the way to go. Since ULIPs’ primary focus is on the investing component, it ultimately leads to wealth creation.

Sum Assured Benefit

In the event of your death, the sum assured is paid to your beneficiary. Furthermore, the money you have invested will receive returns dependent on market circumstances, thereby assisting you in achieving long-term financial objectives.

Charges & Expenses

As there is no limit specified by the IRDAI, the costs of managing ULIPs are significant. Expenses encompass life insurance mortality fees, premium allocation costs, fund management fees, and administrative costs.

Flexibility

ULIPs include a variety of investment alternatives, such as exchange trade funds, loans, and stock options, amongst others. You can choose any of them depending on your risk tolerance and other financial considerations. You can even switch from one fund to another to maximize your earnings

Tax Benefit ULIP 80C

Section 10D of the Income Tax Act of 1961 provides tax exemptions on the payments earned. In addition, ULIP insurance premiums as per section 80C are eligible for tax deductions.

The Basics of Life Insurance

Risk coverage, a set income earning, safety, and tax advantages are all features of life insurance policies. These are the most traditional types of schemes for individuals with a risk aversion tendency they are very popular for the purpose they serve, such as providing financial protection during emergencies.

Sustainability Factor

A life insurance policy is available to help your loved ones in the form of consistent income payouts or a lump sum payment. Some policies even refund all premiums paid if you live till the end of the policy term.

Sum Assured Benefit

The sum assured by the insurance provider will be given to the specified beneficiary in the case of your unfortunate demise.

Charges & Expenses

This depends on the type of plan you choose and include costs like life insurance mortality fees, premium allocation costs, etc.

Flexibility

Life insurance plans have a different kind of flexibility in the sense that you can choose your cover amount, premium amount, policy term period, etc.

Tax Benefit

Life insurance payments up to ₹1.5 lakh per year are tax-free as per Section 80C of the Income Tax Act. Furthermore, the death benefit paid to beneficiaries is tax-free under Section 10 (10D).

To summarize, when you compare ULIP plans to life insurance, the former allows you to build wealth while also safeguarding your loved ones in difficult times, and the latter ensures your family’s well-being after you pass away. As a result, it is suggested that you select the option that best matches your personal and financial needs.

Kotak e-Invest

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

Features

  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521

T&C

Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

What is the Difference Between EPF, VPF, and PPF? What are Their Tax Benefits?

Importance of financial Planning for Retirement

Why Should Retirement Planning Be on Top of Your Priority List?

What are the things to consider before buying ULIPs?

Invest for your second innings with a guaranteed savings plan

Advantages of Pension Schemes and Retirement Plans

Which Is Better: ULIP or SIP?

What is the Death Claim Payable in the Case of ULIP?

How to Win at Retirement Savings?

How Does ULIP Work in India?

How Can I Achieve My Wealth Goal with ULIP Investment?

How Quickly is Fund Switch Effected in ULIPs? Is it Done the Same Day or After a Particular Number of Days?

ULIP Tax Benefits: यहां निवेश करने पर मिलते हैं 5 बड़े फायदे

Best Insurance Plans for a Guaranteed Monthly Income After Retirement!

Saving for approaching retirement with retirement insurance

Difference Between Unit-Linked Insurance Plans and Non-Linked Plans

What is the Minimum Lock-in Period for ULIP?

Give Your Retirement Savings A Booster-Shot with Annuities

How Safe is it to Invest in ULIP plans?

How Can ULIPs Help You Plan for Your Child's Future?

A Quick Guide to Retirement Plans

5 Retirement Planning Tips for a Financially Controlled Post-Employment Life

Why are ULIPs One of the Best Tax Saving Instruments?

Top 4 Myths About ULIP Investments You Should Know

What Happens If I Stop Paying My ULIP Policy Premium After Paying the First Premium? Will I Still Get The Return?

Top Investment Options for Retirement Planning

What is the Estimated Return Percentage on ULIP? Do Investors Get Compound Interest?

ULIP: Can You Surrender ULIPs or Withdraw Money from It?

Types of Annuity Plan | Annuity Definition - Meaning & Key Benefits | Kotak Life

5 Common ULIP Myths That You Should Stop Believing

Meaning of Sum Assured in a ULIP

What are the 4 Financial Phases of Retirement? How to Budget For Each One?

Tips to invest your voluntary retirement scheme money

Which Pension Plan Suits You best?

Single Premium ULIP or a PPF - Which One is Better?

Benefits of Early Retirement Plans

At What Age Should You Start Your Retirement Planning?

How To Calculate The Present Value And Future Value Of Annuities?

Here's What Retirement Would Look Like 30 Years From Now

What is a Retirement Plan - What are its Features?

Is the ULIP Policy Surrender Value Taxble?

Benefits Of Retirement & How Investments Can Help You Enjoy Them

What Are Superannuation Benefits?

Top 4 Mistakes To Avoid While Planning For Your Retirement

What are the Chances of Losing all my Money in ULIP and How Much Return Should I Expect?

NPS for Housewife

What are the Rules for Exit From NPS?

Retirement Planning for Millennials

How To Make Most of Your Money After Retirement?

How To Invest Money In ULIP?

Pros and Cons of Retirement Annuities

How is ULIP NAV calculated? How is the return calculated in ULIP?

Types of Pension Plans for Your Retirement

Retirement Planning at 50? You Are Still Good to Go

Types of Retirement Plans

Different Types of ULIP Investments in India

6 Signs That You Are Not Financially Ready For An Early Retirement

Is it Suggestible to Take a ULIP Plan Linked with a Term Plan?

Are You Planning an Early Retirement? Here's Why Buying Annuity Plan Will Make Sense

What Are Retirement Pension Plans?

How Does Pension Plans in India Works?

Can NRIs Invest in ULIP Plans Offered in India?

Different Types of Retirement Schemes

Understanding Annuity Plans

What are the Differences Between ELSS ULIP and Mutual Funds?

What are the Benefits of ULIP - Explained

How has ULIP Grown Over the Last 3 years?

5 Notable Investment Options for Retirees

How Does NPS Work?

Calculating a Retirement Corpus that can Support Your Lifestyle

What is Partial Withdrawal in ULIPs?

How can NPS help you save tax?

How to Build a Tax-Free Pension Income for Retirement?

Importance of Retirement Planning

ELSS vs ULIP: Which is a Better Investment?

Annuity Plan | How to Choose the Right Annuity Plan | Kotak Life

5 Steps to Gift a Smart Retirement Plan to Your Parents

ULIPs or Pension Plans – Which is a Better Retirement Plan?

यूलिप के फायदे (Benefits of ULIP in Hindi)

Are Annuities Great For Early Retirement?

How Has NPS Performed in Comparison with Other Instruments?

What are the Instruments Available for Building a Retirement Corpus?

5 Reasons Why ULIP Plans are One of The Best Retirement Planning Instruments

Terminologies You Should Understand About Retirement Plans

Getting Close to Retirement? Six Key Retirement Planning Tips That Can Help You Retire

7 Secrets that can Make Your Post-Retirement Phase Prosperous

Can I Surrender My ULIP Policy after 2 Years?

What tax benefits are there on saving for retirement?

How To Keep Your Retirement Accounts from Being Hacked?

FAQs on Taxation of ULIPs

Is ULIP Better Than FD?

Does Having Both ULIP Plan and Other Health Insurance Plan Make Sense?

Why Should You start Retirement Planning as soon as you start a job?

Save Early to Keep Living Your Dreams Post Retirement

Benefits of Early Retirement Planning in India

How Do Annuity Options Work In NPS

5 Reasons to Buy ULIP for a Secured Financial Future

Ten Signs That You're Ready to Retire

Long Term Investment Guide for Your Retirement

What is Fund Value in ULIP?

Do Pension Plans Allow any Death Benefits?

How Is ULIP Different from Other Life Insurance Plans? Where Can I Invest - ELSS, ULIP, or PPF?

Retirement Planning - How To Calculate Your Retirement Premium in India?

Why ULIP Should Be a Part of Your Investment Portfolio?

What To Do With Your Retirement Accounts During An Employment Lapse?

Top 6 Flexible Benefits That ULIPs Offer

A Beginner's Guide to Understanding 401k Retirement Plan

Why Are ULIPs Called Flexible Investments?

What is Lock-In Period in ULIPs?

Inflation: A Key Factor to Consider into Retirement Planning

Demystifying the Retirement Planning Process

What are the Uses of ULIP?

Why Should I Invest in ULIP?

Retirement Planning Guide: These 5 Steps Will Help You Towards a Safe, Secure and Fun Retirement

Is it Advisable to Withdraw the ULIP Insurance Policy After 5 Years?

Is ULIP a Complex Financial Product?

Worried About Running Out of Money in Retirement? 4 Tips to Avoid This Crisis

Why You Should Invest In An Annuity Plan?

How to Choose the Best ULIP Plans to Invest in 2022?

Who Gets the Benefit After the Maturity of ULIP: The Proposer or The Life Insured?

8 Charges in ULIP That You Must Know

How To Choose The Right Pension Plan?

What Happens to ULIP Premiums Paid if the Market Crashes?

Retirement and Pension Plans in India- What are Your Options?

Top 6 Reasons Why You Should Get A Pension Plan

What is Premium Redirection in ULIPs Plans | ULIP Insurance Plans | Kotak Life Insurance

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

Managing Your Retirement Income with an insured retirement plan

What are the Charges Levied on ULIP?

What is NAV in ULIP, and How is it calculated?

Retirement: A New Start to Life!

The Significance of Number 8,000 in Retirement Planning

Is ULIP a Good Option for People Above 60?

Why Should You Invest in NPS?

Do ULIPs Give Good Returns On Investments?

Retirement Planning Guide for Working Men and Women

ULIP Plan or Traditional Insurance Plans - Which is better?

What is an Annuity Plan and How Does Annuity Plan Works | Kotak Life

What Are Mortality Charges In ULIP?

Retirement planning with a systematic life insurance plan

What are ULIPs and their Types?

Un-Retirement - Are You Ready For It?

What are the Advantages and Disadvantages of ULIP?

Which are the Best ULIP Plans in India for Children?

Looking for Ways to Earn Lifetime Income in Retirement? Here Are 6 of the Top Options

What are the Maturity Benefits in a ULIP Plan: Fund Value Sum Assured or Only Fund Value?

Is ULIP A Good Investment Option?

10 Steps to Figure Out How Much Money You Will Need After You Retire

What is ULIP and Its Benefits?

यूलिप के 8 शुल्क

Know Why You Should Stay Invested in Your ULIP Plan

What are the minimum and maximum investment in ULIP? Would the Whole Amount Insured in The ULIP Insurance be Invested in the Market?

How Much Corpus Does One Need for Retirement?

Is It Worth Buying ULIP Plans For 10 Years?

How should one decide on fund allocation within NPS?

10 Steps to Figure Out How Much Money You Will Need For Your Post Retirement Plans