Kotak e-Term Plan
Protect Your family’s financial future with Kotak e-Term Plan.
Kotak Assured Savings Plan
A plan that offer guaranteed returns and financial protection for your family.
Kotak Guaranteed Savings Plan
A plan that offers long term savings and insurance in one premium.
Insurance and investment in one plan with Kotak e-Invest.
Kotak Health Shield
Insurance against medical expenses related to heart, brain, liver and Cancer.
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.
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.
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.
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.
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.
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
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.
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.
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.
The sum assured by the insurance provider will be given to the specified beneficiary in the case of your unfortunate demise.
This depends on the type of plan you choose and include costs like life insurance mortality fees, premium allocation costs, etc.
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.
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.
In this policy, the investment risk in the investment portfolio is borne by the policyholder.