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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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ULIPs are a common mode of investment in today’s world, and they have completely revolutionized the way people think about investing.
With so many people leaning towards ULIP investments, it’s only reasonable to wonder what precisely a ULIP plan is and what benefits it provides.
To answer this primary ULIP question, ULIPs are among the safest and most efficient investment options for experienced and new investors.
It’s crucial to understand how ULIPs function since they feature one-of-a-kind investment structure and a 5-year statutory lock-in period. They’re a hybrid product that combines the benefits of both investment and insurance into one convenient bundle. A ULIP plan’s monthly contribution is split into two parts: the first half is used to pay for life insurance premiums, while the second half is used to invest in financial instruments such as shares, debt, or balanced funds. Finally, it’s worth mentioning that market conditions impact the performance of ULIP funds.
Now that you’ve understood ULIPs and their return benefits, it’s time to learn about the wonderful tax benefits and additional taxation for ULIP FAQ.
Tax benefits under section 80C top the chart for ULIP FAQ. Under section 80C of the Income Tax Act, you can claim up to ₹1,50,000 from your ULIP plan premiums. However, the entire premium paid should be less than 10% of the amount guaranteed. For instance, if your ULIP’s total promised is ₹15 lakhs and the premium paid is less than ₹1.5 lakhs, you can claim the whole amount as a tax deduction under section 80C. However, if your premium is greater than 10%, such as ₹2 lakhs for an amount of ₹15 lakhs, your tax exemption will be limited to 10% or ₹1.5 lakhs.
Any payment made under ULIP, including any sum designated as a bonus on such insurance, is excluded under Section 10 (10D). However, no deduction shall be provided concerning the amount received under the policy if the payment for any year during the policy’s term surpasses 10% of the actual capital sum guaranteed. This is considered an ‘extra premium’ problem.
There has been limited knowledge about the impact of the GST on financial investment instruments since its implementation, which is why it is also a crucial ULIP question to ask before purchasing. For example, the Unit Linked Insurance Plan (ULIP) has an 18% GST rate that applies to all cost items, including the insurance premium for the plan and fund management fees.
This is also one of the most asked ULIP queries.
You can claim a tax deduction of 10% of the entire sum guaranteed, but the deduction will not exceed ₹1.5 lakh, even if your premiums are greater.
After going through all of the major ULIP FAQs and some of the most common ULIP queries, it is clear that this investment instrument is an outstanding choice that offers both big financial returns and substantial tax benefits.
- A Consumer Education Initiative series by Kotak Life
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