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

Buy a life insurance plan in a few clicks

Now you can buy life insurance plans completely online right here.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    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 Plan

    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.

  • Icon for Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and insurance cover against any eventuality.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    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!

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    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.

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Back

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

View Plans
  • 16th Mar 2022
  • 107

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

The past, present, and future are the inevitable reality and truth of our existence. While the past cannot be altered, the present and future can always be protected. This is where the need for careful financial planning and investing choices becomes critical. Since the investment market has grown in size in recent years, it might be difficult for an investor to decide which financial instrument to invest in.

A great number of individuals favour ULIPs. If you’re interested in learning more about ULIPs and other investing alternatives, we’ll guide you through them in this article. Often, ULIPs are compared with ELSS and PPF, and individuals are generally quite confused as to which choice is best suited to their needs. We’ll continue to debate which is better: ULIP, ELSS, or PPF, and how ULIPS are different from other insurance plans. 

Differentiating Aspect of ULIPs from Other Life Insurance Plans

A ULIP or Unit Linked Insurance Plan is a scheme that combines insurance and investment into one package. It combines wealth creation with life insurance by having the insurance company invest a portion of your income in life insurance premiums and the balance in stocks, bonds, equities, or debt, or a combination of these alternatives, depending on your long-term objectives.

ULIP vs ELSS vs PPF

To help you make the best investment decision based on your financial goals, we’ve outlined the difference between ULIP, and ELSS, PPF.

Unit Linked Insurance Plan Or ULIP

Public Provident Fund or PPF

Equity Linked Saving Scheme Or ELSS

Investment Type

ULIP is a combination of investment and life insurance plans into one.

PPFs are a pure investment plan.

ELSS is a pure investment plan.

Lock-In Period

ULIPs have a 5-year mandatory lock-in period.

PPF have a mandatory lock-in period of 15 years.

ELSS have a minimum of 3-year lock-in tenure.

Objective

This financial plan provides momentum for investment gains as well as tax reduction and life insurance.

The scheme’s principal goal is to assist people in making little deposits and offer returns on their investments.

A professionally run fund that invests in a variety of equities and reaps the rewards.

Returns

In ULIPs, the rate of return might fluctuate.

Since this investor selects a mix of equity, bond, and hybrid funds for investment, this influences the rate of return.

PPF currently has a 7.9% annual rate of return.

The rate of return in an ELSS is subjected to variation, which means that it is solely determined by how well the stock market does over a period.

Risks

Significant risk, no assurance of money or return, but life insurance is assured.

PPF is a government-backed scheme and thus are risk-free.

Returns are dependent on the success of the wider markets and the fund manager - thus, they have high risk.

Tax Benefits

Returns and investments are exempted from taxes under 80C Deduction and Section 10(10D) of the Income Tax Act of 1961

Tax benefits are offered under Section 80C of the Income Tax Act of 1961.

Long Term Capital Gains (LTCG) tax regulation exempts investments as non-taxable under Section 80C and returns up to ₹1 lakh per year.

Which one is better - ULIP vs PPF?

After looking over all of the facts and studying the difference between ULIP, ELSS, and PPF, it’s critical to determine your financial objectives and then choose between ULIP, ELSS, and PPF to invest your money in the instrument that best suits you and your family.

- A Consumer Education Initiative series by Kotak Life

Also read

    • 27th Aug 2021
    • 312

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

    Retirement Plan is the best investment product in India to secure the employer's financial future, read the article to know more about different types...

    Read more
  • Importance of Retirement Planning

    A structured retirement plan equips you to handle various factors such as surpluses, shortfalls and emergencies. Read the article to know more about i...

    Read more
    • 28th Feb 2022
    • 638

    What are the Advantages and Disadvantages of ULIP?

    ULIPs are insurance types that combine investing & insurance into one package. Read more to know about the advantages & disadvantages of the ULIP.

    Read more

Related Plans

  • Kotak Credit Term Group Plan

    Kotak Credit Term Group Plan

    Kotak Credit Term Group Plan provides life cover to a group of borrowers of credit institutions where the life assured is the borrower and the credit ...

    Know more
  • Kotak Gratuity Group Plan

    Kotak Gratuity Group Plan

    Kotak Gratuity Group Plan is a Unit-linked group gratuity plan that helps you fund for the gratuity obligation systematically & effectively and releas...

    Know more
  • Kotak Group Shield

    Kotak Group Shield

    Kotak Group Shield Plan covers your customers' loans and savings and protects the well-being of your customers and their family members in the event o...

    Know more
  • Kotak Assured Pension

    Kotak Assured Pension

    Kotak Assured Pension is an annuity plan that promises to pay a regular stream of income on immediate basis or post deferment period for life, ensurin...

    Know more