The need to safeguard the future of your loved ones has always been a motivating factor in our lives. Your goal has always been to ensure that your loved ones are always taken care of, even when you are not around.
In these situations, selecting the right financial instrument to secure their future is critical. One of the most commonly asked concerns these days is whether you should get a ULIP as well as health insurance.
This article will go through both plans in detail to help you determine which is best for you and your family.
All About ULIP
ULIP is a sort of investment that has two main benefits. Considering this is an insurance and investment combination plan, the benefits are also two-fold. Your premium that goes in the insurance component helps you get tax benefits. The amount that goes into the investment component ensures good, balanced, and optimized returns.
ULIPs have a mandatory five-year lock-in period that must be completed before the policy can be surrendered or any partial withdrawals can be made.
A death or maturity benefit is included in ULIP. On maturity, the sum guaranteed is compensated. There are additional benefits in addition to the sum assured, such as a bonus added to the sum assured after a few years of the policy. On maturity, ULIPs pay out the higher sum promised, the fund value, or 105% of the insurance premiums.
Section 80C of the Income Tax Act, 1961 provides tax exemption on ULIP premiums. In addition, under Section 10 (10D) of the Income Tax Act of 1961, the payouts are exempted from taxation.
All About Health Insurance
Health insurance is a policy that covers a person’s medical and surgical costs. It reimburses the expenses incurred due to an accident or sickness or pays the insured’s care provider directly through a monthly payment if the insured cannot work due to deteriorating health.
Health insurance policies do not have a lock-in period and are only as long as the term/length you choose when purchasing them.
- Health Insurance Benefits
Health insurance policyholders in India have access to cashless claim settlement services provided by Indian insurers. The insurer will pay the claim amount directly with the hospital, and the insured will not be responsible for any hospitalisation costs. To use the cashless facility, the insured must seek treatment at one of the insurer’s network hospitals. Ambulance costs, pre-and post-hospitalization charges, and attendance allowance are all covered by health insurance.
You can get enjoy tax exemptions under Section 80D of the Income Tax Act towards the insurance premium paid for a health insurance policy. The maximum deductible amount is ₹25,000; however, it can be extended to ₹50,000 for senior citizens (with effect from 1 April 2018).
Following a thorough analysis of ULIP and health insurance, we can say that getting this combination is a great idea to protect your family’s future. You can grow your wealth, protect your loved ones, and take care of medical expenses by investing in these two plans.
