In ULIP, the investment risk in the investment portfolio is borne by the policyholder
Unit-Linked Insurance Plans (ULIP)
Unit-Linked Insurance Plan (ULIPs) is a type of life insurance plan that provides an opportunity to grow your money. ULIPs offer the long term financial protect your family through life cover. These plans are very popular among individuals as they help in gaining financial security and long-term capital growth.
ULIPs offer an opportunity for fund creation, and tax benefits to the policy owner. They also provide a wide and customizable road to financial planning and protection.
What is ULIP (Unit Linked Insurance Plan)?
ULIP means Unit Linked Insurance Plan. It is a kind of insurance tool that offers both life insurance coverage and investment opportunities in a single plan. Unlike traditional insurance plans that are focused on providing life cover, ULIPs allocate a portion of the premium towards insurance and invest the remaining amount in various market-linked funds.
Why do you Need ULIP Plans?
If you are someone looking for insurance and investment benefits, ULIP plans can give you both. They offer the benefits of insurance along with investment growth. These plans work by investing a portion of your premium in market-linked tools for wealth generation and the rest of the premium amount is invested in insurance. Let us take a look at other benefits of these plans:
Dual Benefit of Insurance and Investment
ULIPs offer the dual benefit of insurance protection and investment growth under a single plan. As mentioned above, a portion of the premium paid towards unit-linked insurance plans goes towards providing life cover ensuring financial security for your loved ones in case of any unfortunate event. At the same time, the remaining portion is invested in various funds such as equity, debt, or a combination of both, allowing you to accumulate wealth over time.
Flexibility in Investment Options
One of the key attractions of unit-linked insurance plans is the flexibility they offer in their investment options. You can choose from a range of funds with varying degrees of risk and return potential as per your risk tolerance. Whether you prefer the stability of debt funds or the growth of equity funds, ULIPs provide you with the freedom to adjust your investment strategy according to your preferences.
Transparency and Control
Unlike traditional insurance plans, where the investment component is not transparent, unit-linked insurance plans offer complete transparency in terms of where your money is being invested. You have the freedom to track the investment performance and make changes to your fund allocation as your requirement. This level of control empowers you to optimize your returns and mitigate risks effectively.
Tax Benefits
There are many attractive tax benefits of ULIPs, making them a tax-efficient investment option. The premiums paid towards ULIPs are eligible for tax deduction under Section 80C of the Income Tax Act, up to a specified limit. Moreover, the maturity proceeds and death benefits received from ULIPs are also tax-free under Section 10(10D), subject to certain conditions.
Long-term Wealth Creation
Unit-linked insurance plans are best suited for long-term wealth creation. These plans encourage disciplined investing over a long period. By staying invested in these plans for a long time, you can benefit from the power of compounding. This can be used to get good returns over time. Whether you are saving for your child's education, retirement, or any other financial goal, ULIPs provide a systematic approach to wealth accumulation.
Cost-effective Investment Option
With online platforms and digitization, the costs of ULIPs have reduced, making them a cost-effective option. Traditional insurance plans involve high administrative and distribution charges, but unit-linked insurance plans offer competitive charges, and maximize the returns on your investment. They also offer an option to switch between funds without incurring additional charges, and provide flexibility at minimal costs.
ULIP Plans from Kotak Life Insurance
Kotak Life offers several ULIP plans that best meet your requirements. You can understand the benefits, features, and investment strategies associated with these ULIP plans. The following are our top recommendations.
- Return of Mortality Charges
- Enhanced Protection with riders
- Multiple Plan Options
- Zero Premium Allocation Charges
- Tax Savings
- High Sum assured multiple for higher life cover
- 2X return of premium allocation charges
- 3X return of mortality charges
- Loyalty additions
- Flexibility to choose a short or long premium payment term
- Multiple investment strategies
- Kotak Invest Maxima
- Kotak Single Invest Plus
- Kotak Single Invest Advantage Plan
- Kotak Platinum
- Kotak Ace Investment
- Kotak Wealth Optima Plan
- Zero premium allocation charges
- Choice of portfolio strategies and fund types
- A variety of policy term and premium payment terms are available.
- Partial withdrawals
- Rewards on long-term investment
- Single premium policy
- Joint life cover for two family members
- Loyalty Additions to enhance fund growth
- One-time investment
- Choice of 3 investment strategies
- Loyalty Additions to give a boost to your wealth
- Choice of Three fund-management strategies
- Survival units to enhance your fund value
- Limited premium payment term
- Choice of three investment strategies
- Flexibility to add Top-up premium
- Multiple premium payment period options
- Option to make partial withdrawal
- Choice of two investment strategies
- Enhances fund growth through Yearly Additions post Lock-in period
- Options to be covered till 99 years
- Boosts long term savings through Wealth Boosters
What are some key features of ULIPs?
ULIPs present an alternative to traditional insurance policies by providing policyholders with the opportunity to invest their premiums in a diverse range of funds, including equity, debt, or a combination of both.
Allocation of Premium
ULIPs allow you to choose investment channels based on your risk tolerance. You can go aggressive with equities, cautious with debt funds, or mix it up with balanced funds to get the best of both worlds. You can also allocate your premiums towards funds of your preference and depending on your risk appetite.
Switching of Funds
You can move or switch from one fund to another if the performance of your chosen funds does not meet your expectations or if the market conditions change. As a result, you can ensure that your returns are well-balanced and beat the volatility of the market.
Withdrawal Options
You can make partial withdrawals from your funds after the five-year lock-in term if necessary. The insurance providers set the maximum withdrawal amount and the number of withdrawals that are permitted.
Additional Top-ups
You can add additional money in the form of Top-Up Premiums over and above your existing premium, which will give you an additional Top-Up Sum Assured.
Tax Savings
ULIPs are like otherlife insuranceinstruments with the difference that you get to invest and secure your family financially both under one plan. Since it is a life insurance product, you also get tax benefits.
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Importance of ULIP in Personal Finance
Combining the benefits of insurance and investment, ULIP is a versatile tool to secure your financial future. Let’s understand the importance of ULIP in personal finance.
Dual Benefit of Insurance and Investment
One of the keyadvantages of ULIPsis the unique combination of insurance and investment. Unlike traditional insurance policies that provide only protection, ULIPs offer a dual benefit by simultaneously providing life coverage and a platform to grow wealth.
Flexibility and Control
ULIPs provide you a high degree of flexibility and control over your investments. You can choose the level of life cover you require based on your financial goals and risk appetite. ULIPs offer the option to switch between different investment funds according to market conditions or personal preferences for optimal returns.
Long-Term Wealth Creation
ULIPs are well-suited for long-term investment horizon. By staying invested over an extended period, you can harness the power of compounding to build significant wealth. They can serve as an effective tool for achieving long-term life goals like buying a house, funding education, or planning for retirement.
Tax Efficiency
The premiums paid towards ULIPs are eligible for tax deductions under Section 80C of the Income Tax Act, 1961, up to a specified limit. Additionally, the maturity proceeds and death benefit received from ULIPs are usually tax-free underSection 10(10D),subject to new tax rules.
Customization and Riders
ULIPs offer a range of customization options to cater to individual requirements. You can opt for additional riders such as permanent disability benefit and accidental death benefit, among others, to enhance the protection offered by ULIP. These riders provide an added layer of security and can be tailored to address specific risks and concerns.
Enjoy safe, market-linked returns with Kotak e-Invest!
Enhance Your Personal FinanceWhat is a ULIP Calculator?
ULIP calculator is an online tool provided by insurance companies to estimate potential returns and policy premiums based on various investment scenarios. It helps individuals assess and compare different ULIP plans offered by insurers.
ULIPs come with different features and benefits, making it complicated for individuals to select the right plan. This is where a ULIP calculator comes in handy.
Investment Amount(Monthly)
Investment Tenure(Years)
Interest Rate(P.A.)
Sensex has given 10% return from 2010 - 2020
Existing Investment(optional)
Periodic Investment(optional)
Calculating ULIP Returns Using the Power of Compounding
Let us now see the power of compounding in different case scenarios:
- Monthly Contribution
- ₹2,40,000
- ₹1,25,000
- ₹82,000
- ₹67,000
- ₹42,000
- ₹30,000
- ₹15,000
- Investment Period
- 10 Years
- 10 Years
- 15 Years
- 20 Years
- 15 Years
- 20 Years
- 30 Years
- Estimated Returns at 4%
- ₹3,53,39,953
- ₹1,84,06,226
- ₹2,01,79,420
- ₹2,45,73,900
- ₹1,03,35,801
- ₹1,10,03,239
- ₹1,04,10,741
- Estimated Returns at 8%
- ₹4,39,07,048
- ₹2,28,68,254
- ₹2,83,75,134
- ₹3,94,64,368
- ₹1,45,33,605
- ₹1,76,70,612
- ₹2,23,55,392
How Does a ULIP Work?
ULIP operates at the crossroads of insurance and investment, allowing policyholders to navigate the dual objectives of securing their future and optimizing their financial growth.
Choose the level of life insurance, premium payment option, premium amount, and policy duration to match your financial security and savings goals.
Your nominee will receive the sum assured in the event of an unfortunate event during the policy term to realize their ambitions.
Depending on your selections, the remainder of your premium is invested in the stock market using equity, debt, or hybrid funds.
Equity invests your funds in stocks. Debt funds invest your money in safer instruments like bonds.
Your choice of an upfront, lump sum payment or recurring payments on an annual, half-yearly, quarterly or monthly basis.
Your life insurance is paid for in part with your premium.
Do not wait; start growing your wealth with Kotak e-Invest.
Take the first stepWhat are the Benefits of ULIPs?
Building a corpus to ensure a safe and secure future for your loved ones and yourself holds critical importance, and Unit Linked Insurance Plans have the potential to help you with that. They have several advantages, as mentioned below:
Flexibility to Choose a Cover Amount
You can choose your Life Cover amount as you desire in Unit Linked Insurance Policies. Most ULIPs offer a life cover of 7 times your yearly premium, which is the minimum. You can choose a life cover value of up to 25 times your yearly premium, depending on the type of plan you choose.
Flexibility to Choose the Type of Investment
One of the most compelling aspects of ULIPs is the freedom to choose the investment type. This flexibility ensures that investors can personalize their ULIPs according to their unique requirements.
Financial goal plans
ULIPs are designed to help you achieve your financial objectives, such as increasing your wealth,planning for retirement,or preparing for your child's future education plans.
Maturity Benefit
When your policy matures, you receive the accumulated fund value, which is a culmination of your invested premiums and market-linked returns.
Death Benefit
ULIPs offer a comprehensive death benefit that guarantees your family's financial well-being in the event of your untimely demise. Your nominees will receive the proceeds basis the terms and conditions of your ULIP policy.
Loyalty Additions
Loyalty additions in ULIPs are extra units added to your policy at specific intervals, rewarding you for staying invested over the years. This feature not only enhances the growth potential of your investment but also demonstrates the insurer's commitment to your financial success.
Wealth Boosters
As you continue your ULIP journey, you'll encounter the concept of wealth boosters. These are additional units allocated to your policy on achieving certain milestones, such as completing five years or more of the policy term.
Dynamic Fund Allocation
With dynamic fund allocation, you can switch between different funds offered by the insurer, such as equity, debt, or balanced funds. This strategic maneuvering allows you to optimize your returns and adapt to changing market dynamics.
Tax Advantages
At different stages of your life insurance policy, you may be eligible for tax benefits as per the Income Tax Act of 1961.
- Advantage of Entry:Under Section 80C, you gain tax savings on your premium payments.
- Advantage of Exit:You can also get a tax-exempt Maturity Benefit if you meet the Section 10 (10D) requirements.
Invest in your dreams with Kotak Life Insurance ULIP plans.
Buy NowWhich Investor Class Are ULIPs Most Suited for?
ULIPs are the most popular investment choice among people looking for insurance benefits with wealth accumulation. As investors, people have different tolerances for risks faced in investments. ULIPs offer something for every class of investors. Here are some popular investor classes that can benefit from ULPs.
Individuals Who Want to Track their Investments Closely
ULIPs offer the best investment options for people who want to closely track their investments. They offer flexibility to track investment performance so that you can understand how your investments are doing and change if you are not satisfied with the results. This monitoring can be done through your ULIP’s fund value, NAV, and other essential information.
Individuals with a Medium to Long Term Investment Horizon
As we all know it is good to invest for longer periods of time to get the maximum benefit out of any investment. From this point of view, ULIPs are made for longer investment periods and therefore offer good returns. If you stay long enough in your ULIP investments, you can take advantage of compounding and maximize your returns.
Individuals with Varying Risk Profiles
No matter what your risk tolerance is, ULIP has options for everyone. It offers stable returns by investing in different options. At the same time, it offers varied options for adjusting your investment if you think you are ready for higher-risk investments. This feature makes ULIPs a popular choice of investment among investors.
Investors Across All Stages of Life
No age bar applies to ULIP investments. ULIP is an ideal investment for individuals approaching retirement age or who are young investors. It provides novices with the advantage of long-term investing for wealth accumulation. For people looking for retirement solutions, ULIP’s lock-in period helps them put aside money for five years and reap the benefits of good returns after the lock-in period ends. They can even extend the investment period if their budget and timeline allow.
Types of ULIP Charges
Like any financial product, ULIPs entail certain charges that policyholders need to be aware of. Let us explore the various charges associated with ULIPs:
Policy Administration Charges
Policy Administration Charges are imposed to cover the costs of managing the ULIP policy. This includes charges incurred in policy issuance, servicing, and record maintenance. These charges are deducted on a periodic basis, such as monthly, and may vary across different ULIP products and insurers.
Fund Management Charges
Fund management charges are required for maintaining your funds under ULIP. These charges are levied on the basis of managing your portfolio, that involves researching, analyzing and making changes to your portfolio for maximum benefits.
Switching Funds Charges
ULIPs come with the option of switching investment funds, but this service is chargeable after a set of free switching chances. These charges can vary from insurer to insurer. No matter what the charges are, this flexibility makes ULIP a profitable option for investors.
Surrender Charges
If an investor decides to discontinue their ULIP policy before maturity or completion of the lock-in period, they must pay a sum to the insurer. Like switching charges, these charges also differ from insurer to insurer and are dependent on how long the policy has been active.
Mortality Charges
In order to cover the risk of paying out the death benefit in the event that you pass away during the policy term, the insurance company deducts mortality charges. These charges vary due to variables such as sum assured, gender, age, and health status. Your choice of a higher death benefit amount (sum assured) will result in a higher mortality charge.
Premium Allocation Charges
The insurer charges premium allocation charges for allocating to chosen investment funds. These charges cover the cost of sales and distribution expenses, agent commission, and underwriting costs. These charges are deducted from your premium amount, thereby reducing the allocated premium.
Partial Withdrawal Charges
Partial withdrawal charges are for investors who choose to withdraw from their ULIP policy before completing the lock-in period. Every partial withdrawal made above the free withdrawal standard (mentioned in the ULIP policy) may result in a charge from the insurance company. The costs for partial withdrawals differ amongst ULIP products and insurers.
Lock-in Period of ULIP
The minimum amount of time that policyholders must remain invested in a ULIP before they are permitted to make any partial withdrawals, or surrender the policy, is known as the lock-in period. Policyholders are not permitted to access their invested funds during the lock-in period, and early withdrawals or surrenders may result in fines or other charges from the insurance provider.
Duration of the Lock-in Period
The Insurance Regulatory and Development Authority of India (IRDAI) requires a minimum lock-in period of five years for ULIPs in India. You cannot withdraw invested funds completely or partially within the first five years from the policy's start date. Some ULIP plans may allow partial withdrawals after the five-year lock-in period. However, these withdrawals might have conditions attached, such as minimum withdrawal limits or charges.
Who Should Invest in ULIPs?
As investors you wish to get the maximum advantage from your ULIP plans. Let us take a look at the type of investors who can leverage maximum benefits from ULIPs:
Long-term Investors
People willing to invest for longer periods of time can gain maximum returns from it. Longer investment periods give enough time for investments to yield excellent returns through their compounding power.
Those Seeking Insurance and Investment Combined
The combined benefits of investment and insurance in one policy is the main feature of ULIPs. They can be a perfect solution for people who don’t want to buy separate policies but want to enjoy the benefits of both.
Goal-oriented Investors
People with clear goals can gain huge benefits from ULIPs by planning their investments. ULIPs can be customized for specific needs, with their flexibility in investment options and features like fund switching.
Those Willing to Bear Market Risk
ULIP, being a market-oriented investment tool, is subject to market risks. These tools can offer excellent returns if you are ready to take risks.
Tax-savvy Investors
If you are looking for tax savings and investments, ULIPs are for you. As per the Income Tax Act, the premiums paid are subject to tax deductions up to ₹1.5 lakh under Section 80C, and the maturity proceeds are tax-free under Section 10(10D).
How to Maximize ULIP Returns?
ULIPs are popular for being a versatile investment tool that combines insurance coverage with investment opportunities. They offer excellent returns over the long term, but this requires a strategic approach. Here are five key strategies to help you make the most of your ULIP investments.
Start Early
Starting early is one of the most effective ways to maximize ULIP returns. Time plays an important role in ULIP returns. Your investment earns returns on the principal amount and the accumulated gains over time. By starting early, you give your investments more time to grow, which enhances your overall returns. Even small contributions made early on can boost your ULIP amount over the long term.
Regular Investment is a Must
Consistency is key when it comes to ULIP investments. It is necessary to make regular contributions to ensure that you take maximum advantage of your plan. You should set up a disciplined investment schedule and stick to it. Regardless of market conditions, you must invest to utilize the power of rupee-cost averaging and increase your ULIP returns.
Use Various Fund Options to Your Advantage
To maximize your returns, you should diversify your investment with various fund options based on your risk tolerance. For example, equity funds offer higher growth potential, while debt funds provide stability and income generation. You can invest in these options as per your needs. By spreading your investment, you can reduce risk based on market conditions.
Review and Analyze Portfolio Regularly
Regular reviewing and analysis of portfolio is essential to make most of your ULIP investment. You should keep a track of the performance of chosen funds and assess. You must check if they align with your investment objectives and risk profile. Staying informed about market trends and economic indicators that can impact your investments is also important to make necessary changes to optimize your returns.
Avail Tax Benefits
ULIPs offer attractive tax benefits for policy owners. As per Section 80C of the Income Tax Act 1961, the premiums paid towards ULIPs qualify for tax deduction. Similarly, the maturity proceeds and death benefits received from ULIPs are tax-free under Section 10(10D). With these tax benefits, you can effectively reduce your tax liability and increase your ULIP returns.
Why Choose Kotak Life ULIP Policy?
Kotak Life ULIP Policy offers a compelling proposition for individuals seeking a comprehensive life insurance solution that also provides the opportunity for wealth creation. With its wide range of investment options, transparency, flexibility, life insurance coverage, and tax benefits, Kotak Life has emerged as a preferred choice among investors.
Customized Investment Options
With Kotak e-Invest you can choose from a wide range of funds based on your risk appetite and financial goals. It offers something for everyone, whether you prefer a conservative approach or are willing to take on higher risks for higher returns. It also provides different fund options like equity funds, debt funds, and balanced funds making sure your investment stays aligned to your goals.
Transparency and Flexibility
It is necessary to keep an eye on your investments. With Kotak e-Invest, you receive regular updates on the performance of your investments. It also allows you to switch between funds based on market conditions and changing investment choices. This flexibility sets Kotak e-Invest different from traditional insurance policies and empowers you to manage your investments actively.
Life Insurance Coverage
Along with the investment component, Kotak e-Invest also offers comprehensive life insurance coverage. In the unfortunate event of the policyholder's demise, the nominated beneficiaries will receive the sum assured. This unique benefit of Kotak e-Invest ensures that the financial security of beneficiaries is not compromised at all.
Wealth Creation Potential
By staying invested for a long period, you can benefit from compounding and achieve yourfinancial goals,such as funding your child's education, buying a dream home, or enjoying a comfortable retirement. Kotak e-Invest helps you fulfill all your financial goals.
Tax Benefits
Tax advantages of Kotak e-Invest enhance the overall returns on your investment. The premiums you pay towards the policy are eligible for tax deductions under Section 80C of the Income Tax Act. The maturity proceeds and death benefit received by the policyholder or the nominee also qualify for tax-exempt under Section 10(10D).
Enjoy the dual benefits of protection and growth with Kotak e-Invest plan.
Invest todayWhat Type of Funds Do ULIP Plans Include?
Whether you are a seasoned investor or someone exploring ULIP funds for the first time, understanding the different fund options available within ULIPs can help you make informed decisions and optimize your investment strategy.
Equity Funds
Equity fundsare for Investors with a high-risk tolerance and a long-term investment horizon (5-10 years or more). Their performance is based on the ups and downs of the market. You can opt for equity funds if you have a good risk appetite and want to create some wealth in the long term.
Debt Funds
Debt funds are best suited for conservative investors looking for steady returns with lower risk. They Invest in government securities,corporate bonds, and other debt instruments. These devices are safer since they carry low to moderate risk.
Cash Funds
Funds which invest in bank-owned money market funds are called as cash funds. These instruments have a very low-risk profile. As a result, of all ULIP categories, they offer the lowest returns. Risk-averse investors have the option of choosing cash funds ULIPs.
Balanced Funds
ULIPs also offer the choice to invest in both equities and debt instruments in order to balance risk and profit. These are perfect for investors seeking a balance between risk and return. Examples of balanced funds could be equity-oriented hybrid funds.
Money Market Funds
Money market funds invest in short-term fixed-income instruments. These funds focus on capital preservation and liquidity. Money market funds in ULIPs are ideal for investors with a very low-risk tolerance or those seeking short-term parking of funds.
Sector-Specific Funds
Some ULIPs also offer sector-specific funds that concentrate their investments in specific sectors or industries, such as technology, healthcare, or energy. These funds are suitable for investors who have a strong conviction about a particular sector's growth prospects.
Retirement ULIPs
Retirement ULIPs are designed to help individuals build a retirement fund. These plans offer a combination of insurance and investment benefits, which allows policyholders to secure their retirement while potentially earning returns. These plans have a longer lock-in period and provide the option of systematic withdrawals or annuity payouts after maturity.
Child ULIPs
Child ULIPs are tailored to meet the future financial needs of your child, such as education expenses or marriage. These plans provide a life cover for the parent and offer investment options that align with the goals for your child. These plans often come with a built-in feature that waives future premiums in case of the policyholder's demise, ensuring that the child's financial goals are not compromised.
How to Manage ULIP Funds?
Investing is not considered as a one time job done. You must keep reviewing the funds, making adjustments as the market changes and then you can expect excellent returns from it. But if you find it difficult to manage ULIPs, the following are some important considerations with regard to the management of ULIP funds:
- Various ULIPs allow routine transfers of funds from debt to equity ULIPs. You have to pay an annual premium, and you can begin investing in a debt fund. You can also choose to switch to an equity fund gradually if you want. This is something like Systematic Transfer Plans (STP), which is popular among investors.
- You must be prepared for along-term investmentbecause ULIPs have a five-year lock-in period and you can only withdraw from it after the lock-in period is over. Partial or withdrawal before maturity is permissible under specific conditions.
- It is necessary to review the performance and future prospects of ULIP funds on a regular basis. You can switch between funds, if an asset is underperforming. For example, migrating from an equity ULIP fund to a debt ULIP fund. There might be some fees but there are also some set number of free switches each year.
- Many ULIPs have a lifecycle-based strategy, based on the investor's age. This method involves automatically distributing their funds between equity and debt for maximum returns. If you decide to invest in ULIPs for your retirement, you can easily go for this method.
If you are waiting for the ideal time to buy ULIP, the right time is now. Your chances of reaching your objectives are increased the earlier you begin investing in ULIPs.
Testaments
When I was planning for my child's future, my friends recommended me about investing in ULIP. The benefits that ULIP offer were very well aligned with my requirements. This is why I started researching and came to know about Kotak e-Invest plan. I went through their online portal and got to know the premiums, returns and everything. I realized that Kotak ULIP plans was the best plan for me, and I bought it.
-Mr. Ambadas Sulakhe
ULIPs are new-age investment instruments that offer tax benefits and market-linked returns. I read about it online and started to think about my investments. I thought this could be a good addition to my financial portfolio. They offer market-linked returns with no Capital gain taxes. And I could easily optimize my returns by choosing the funds wisely. So, I decided to start my Kotak ULIP plan.
- Mr. Darpan V Mehta
Investments have always helped me achieve my difficult life goals. So, I make sure that every month I invest in the right instruments. Just when I was looking for a new investment option, I came across Kotak ULIP plan. They have various plan options; premium payment mode is flexible which is perfect for me. The plan aligned with my requirements and offered excellent returns which makes this one a best ULIP plan for me.
- Ms Munera Janvekar
Kotak ULIP plan is one of the best investment instruments I decided to invest my hard-earned money in. It gives me various fund options that help me manage my portfolio and make sure that my investment is optimized all the time. This way, I can gain returns when the market is high and go for debt funds when the markets go down. A win-win. If you are looking for such a plan, I recommend you to invest in Kotak ULIP plan.
- Mr Sujitbhai Ashokbhai Kanjariya
I was looking for investing a sum of amount that can give me good returns over the long term. I came across Kotak ULIP plan and decided to give it a try. I logged in to understand the plan and their call center executive helped me understand everything about the plan. I went ahead with the plan and the plan is giving me good returns and I can monitor them year on year. If you are looking for a long term investment with solid returns, I recommend you to invest in Kotak ULIP plan.
- Ms Neeti Garg
My friends recommended me to invest in an ULIP plan when they came to know that I am planning to buy a house in the future. I went online, spoke to my friends and came across Kotak ULIP plan. I registered on their portal where they showed me all plans, premiums and returns upfront. I completed the application process upload documents and made my payment. I was happy to make this decision as I can now monitor my returns and make a fund switching decision when required.
- Mr Santosh Kumar
How to Find the Best ULIP Plans?
Finding the best ULIP plan can be difficult with so many options in the market. Here are some essential factors to consider when looking for the best ULIP plans:
Understand the Features and Benefits
Features and perks offered by various different plans can be different. You must have a clear understanding of the features and benefits provided by the options accessible in the market. This will help you achieve your financial goals.
Identify the Objectives
No plan is going to work if the objective is not clear. Same with ULIPs, you should know what you are aiming for while investing. This aim could be buying a home, funding your child’s education or having a comfortable life after retirement.
Claim Settlement Ratio
One of the most important factors while searching for the best ULIP plan is claim settlement ratio. It is the measure of claims received by the insurer that were resolved by them. Higher claim settlement ratio means insurers can be trusted.
Why Should You Invest in ULIPs?
ULIPs offer good returns in multiple asset groups as compared to majority insurance products. The policyholder can switch between debt and equity funds to make sure that the returns are beneficial.
The life cover provided in ULIPs is ten times the amount of annual premium you paid. This premium makes the insured insusceptible to market volatility. Policy owners get liquidity benefits, transparency, returns, etc., which works in their favor, making ULIPs a smart investment decision!
Which ULIP Funds are Best Suited for You?
Choosing the best ULIP funds depends on several factors, including your risk tolerance, investment horizon, and financial goals. Here are some categories of ULIP funds and their suitability:
Equity
Equity fundsare for Investors with a high-risk tolerance and a long-term investment horizon (5-10 years or more). Their performance is based on the ups and downs of the market. You can opt for equity funds if you have a good risk appetite and want to create some wealth in the long term.
Debt
Debt funds are best suited for conservative investors looking for steady returns with lower risk. They Invest in government securities,corporate bonds,and other debt instruments. These devices are safer since they carry low to moderate risk.
Cash funds
Funds which invest in bank-owned money market funds are called as cash funds. These instruments have a very low-risk profile. As a result, of all ULIP categories, they offer the lowest returns. Risk-averse investors have the option of choosing cash funds ULIPs.
Balanced funds
ULIPs also offer the choice to invest in both equities and debt instruments in order to balance risk and profit. These are perfect for investors seeking a balance between risk and return. Examples of balanced funds could be equity-oriented hybrid funds.
Multiply your wealth with Kotak e-Invest.
Invest todaySteps to Buy ULIP Online
To purchase unit-linked insurance plans online, follow these simple steps:
Visit insurance comparison websites or the official websites of insurance providers.
Select a ULIP plan that aligns with your financial goals, risk tolerance, and investment horizon.
Use the online premium calculator available on the insurer's website to determine the premium amount based on your chosen sum assured and investment preferences.
Complete the online application form with personal details, contact information, and nominee details.
Choose the funds you want to invest in (equity, debt, balanced) based on your risk appetite.
Upload required documents such as identity proof, address proof, and age proof and pay the premium amount online using available payment methods.
Complete the online verification process (if required by insurer), which may include a video KYC (Know Your Customer) procedure.
After verification and approval, the policy document will be issued and sent to your registered email address.
What are the Documents Required to Buy ULIPs?
If you Are considering purchasing a ULIP, it Is essential to understand the documentation required to initiate the process. Here is a list of the commonly required documents:
1. Identity Proof
- Aadhaar Card
- PAN Card
- Passport
- Voter ID Card
- Driving License
2. Address Proof
- Aadhaar Card
- Passport
- Utility Bills (electricity, water, gas) not older than 3 months
- Bank Statement with a valid address not older than 3 months
- Voter ID Card
- Driving License
- Ration Card
3. Age Proof
- Birth Certificate
- School or College Leaving Certificate
- PAN Card
- Passport
- Aadhaar Card
- Voter ID Card
- Driving License
4. Income Proof (For Higher Sum Assured Plans)
- Salary Slips (last 3-6 months)
- Income Tax Returns (ITR) for the past 2-3 years
- Bank Statements (last 6 months)
- Form 16 (for salaried individuals)
5. Photographs
- Recent passport-sized photographs as specified by the insurer.
6. Bank Account Proof
- Canceled cheque with your name printed on it
- Bank passbook or statement showing the account holder's name, account number, and bank details
ULIP vs Mutual Funds(MF) vs Fixed Deposits(FD)
The popular choices often compared are Unit Linked Insurance Plans (ULIPs) and other traditional investment instruments. Let’s compare the features and benefits of ULIPs compared to mutual funds & fixed deposits.
- Aspects
- Returns
- Risk Profile
- Tax Benefits
- Maturity Benefit
- Lock-in Period
- Ideal For
- ULIP
- Market-linked
- Moderate to High
- EEE (Exempt-Exempt-Exempt) status
- Sum assured + Fund value
- 5 years
- Long-term financial goals
- Mutual Funds
- Market-linked
- Moderate to High
- Tax-efficient
- NA
- Varies
- Long-term goals
- Fixed Deposits
- Fixed
- Low to Moderate
- TDS on interest
- Principal + Interest
- Varies
- Short-term goals
ULIP for Wealth Creation
When an individual invests in a ULIP, the insurance provider allocates units based on the prevailing Net Asset Value (NAV) of the fund. The NAV changes with the performance of the underlying assets, reflecting the fund's growth.
Benefits of ULIP for wealth creation
Diversification
ULIPs provide access to various asset classes, including equities, bonds, and money market instruments. This diversification reduces the risk associated with investing in a single asset class and enhances the potential for higher returns.
Flexibility
ULIPs provide the flexibility to switch between different funds based on market conditions and changing financial goals. For instance, during market volatility, one can switch from equity funds to debt funds to protect gains.
Tax Benefits
ULIPs offer tax benefits under Section 80C of the Income Tax Act, allowing individuals to claim deductions on the premiums paid, up to a specified limit. Moreover, the maturity proceeds received on the policy are tax-free under Section 10(10D) of the Income Tax Act.
Long-Term Wealth Accumulation
Thelock-in period of ULIPsencourages long-term investing, which is a crucial element in building substantial wealth. Staying invested for an extended period enables compounding to work its magic and generate significant returns.
Life Insurance Coverage
Apart from being an investment vehicle, ULIPs also provide life insurance coverage, which ensures financial protection for the policyholder's family in case of any unfortunate eventuality.
How to Claim Tax Benefits on ULIPs?
ULIPs provide policyholders with the opportunity to grow their wealth while ensuring financial protection. One of the key advantages of ULIPs is the tax benefits they offer.
Deduction Under Section 80C
ULIP premiums are eligible for a tax deduction underSection 80Cof the Income Tax Act 1961. As per the current tax laws, the maximum deduction allowed under this section is ₹1.5 lakh per financial year. However, it is important to note that the deduction applies to the premium paid and not to the entire amount invested in the ULIP.
Tax-Exempt Maturity
One of the significant advantages of ULIPs is that the maturity proceeds, including the investment gains, are tax-exempt under Section 10(10D) of the Income Tax Act, subject to certain conditions. To avail of this benefit, the annual premium should not exceed 10% of the sum assured. If the premium exceeds this limit, the tax benefit may not be available.
Switching of Funds
ULIPs provide the flexibility to switch between different funds based on market conditions or investment preferences. The best part is that these switches do not attract any tax liability. You can optimize your investment by taking advantage of market movements without incurring tax consequences.
Partial Withdrawals
ULIPs also allow policyholders to make partial withdrawals from their investments, subject to certain terms and conditions. The amount withdrawn is tax-free, provided it does not exceed 20% of the fund value. Any amount above this limit may attract tax liabilities.
Continuity of Tax Benefits
It is crucial to maintain the policy for a minimum period to avail of the tax benefits. If the policy is discontinued within five years from the starting date, the tax benefits already claimed will be added to your taxable income in the year of discontinuation.
Myths About Investing in ULIPs
ULIPs have long been a topic of debate in the world of investments. While some investors hail them as a flexible and efficient investment avenue, others harbor skepticism and believe in several myths associated with ULIPs.
Myth 1: ULIPs are Expensive
One of the most common misconceptions about ULIPs is that they are expensive. ULIPs do have charges associated with them. Many other investment options also involve charges, such as mutual funds orportfolio managementservices.
Myth 2: ULIPs Have Poor Returns
Another myth surrounding ULIPs is that they offer poor returns compared to other investment options, such as mutual funds or direct equity. The returns from a ULIP depend on several factors, including your investment horizon, the chosen fund options, and the insurer's track record.
Myth 3: ULIPs Lack Transparency
Some investors believe that ULIPs lack transparency, making it difficult to understand where their money is being invested. However, ULIPs are regulated by the IRDAI, which ensures that the insurance companies disclose all relevant information related to the plan.
Myth 4: ULIPs Have a Long Lock-in Period
It is true that ULIPs have a minimum lock-in period of five years as per IRDAI regulations, this duration also provides investors with the opportunity to benefit from the power of compounding over the long term.
Myth 5: ULIPs are Only for Life Insurance
While ULIPs do provide life insurance coverage, they also serve as investment vehicles. They offer a dual benefit of insurance protection and potential wealth creation through market-linked returns.
Myth 6:ULIPs are Risky
One of the common myths surrounding ULIPs is that they are inherently risky investment products. While it's true that ULIPs carry investment risk associated with market fluctuations, the level of risk depends on the fund option chosen by the investor. Equity-based ULIPs may exhibit higher volatility due to their exposure to the stock market, but they also offer the potential for higher returns over the long term. On the other hand, debt-based ULIPs provide stability and capital preservation, making them suitable for conservative investors. By diversifying across different fund options and staying invested for the long term, investors can manage risk effectively and maximize the potential returns from ULIPs.
FAQs
Which is the best ULIP?
Determining the best ULIP (Unit Linked Insurance Plan) depends on various factors, such as your investment goals, risk tolerance, and financial needs. It is important to compare different ULIP offerings, considering factors like fund performance, charges, flexibility, and customer service.
Is ULIP better than Mutual Funds?
ULIPs offer both insurance coverage and investment components, while Mutual Funds are purely investment vehicles. ULIPs provide life insurance protection along with potential market-linked returns, but they may have higher charges. Mutual Funds, on the other hand, focus solely on investments and typically have lower charges.
Are ULIPs a good investment?
ULIPs can be a good investment option for individuals who want a combination of insurance coverage and investment growth potential. They offer the opportunity to participate in the market while providing life insurance protection. ULIPs also offer flexibility in choosing investment funds based on risk appetite and investment goals.
Are ULIPs suitable for the long term?
ULIPs are designed for long-term investment horizons. They typically have a lock-in period of five years, during which it is advisable to stay invested to maximize potential returns. ULIPs offer the benefit of compounding returns over time, allowing your investments to grow.
Can I cancel/surrender my ULIP plan?
Yes, it is possible to cancel or surrender a ULIP plan before the completion of the lock-in period. However, surrendering a ULIP before the lock-in period may result in charges and penalties, which can significantly impact the surrender value. After the completion of the lock-in period, you can surrender the ULIP without incurring any charges.
When can I withdraw ULIP?
You can withdraw from a ULIP plan after the completion of the lock-in period, which is usually five years from the date of purchase. Once the lock-in period is over, you have the option to make partial withdrawals or fully surrender the ULIP without any charges or penalties.
What is the expiry date of the lock-in period?
The lock-in period for a ULIP plan is typically five years from the date of purchase. After the completion of the lock-in period, you have the flexibility to withdraw funds partially or fully without incurring any charges or penalties.
What are the charges in ULIP?
ULIPs have various charges associated with them. Some common charges include:
- Premium allocation charges
- Policy administration charges
- Mortality charges
- Fund management charges
- Surrender charges
It is important to carefully review the policy documents to understand the specific charges applicable to your ULIP plan, as they can vary between insurance providers and policies.
How is the fund value calculated in ULIP?
The NAV is calculated by dividing the total net assets of the fund by the number of units outstanding. The fund value of your ULIP plan is determined by multiplying the number of units held in each fund with the respective NAV of those units.
What is ULIP interest rate?
ULIP stands for Unit Linked Insurance Plan. It is a type of insurance product that combines life insurance coverage with investment options. ULIPs do not offer a fixed interest rate like traditional savings accounts or fixed deposits. The returns on a ULIP are linked to the performance of these investment funds, which can fluctuate based on market conditions.
What is the advantage of ULIP?
ULIPs offer several advantages that make them a popular choice for individuals seeking both insurance coverage and investment opportunities:
- Dual Benefit
- Flexibility
- Tax Benefits
- Long-Term Wealth Creation
- SPartial Withdrawals
- Transparency
How Can I Reduce Risk on my ULIP Investment?
You can reduce risk on your ULIP investment by considering the following strategies:
- Diversify your funds
- Regularly review and rebalance your portfolio
- Opt for a balanced or conservative investment strategy
- Stay invested for the long term
- Seek advice from a financial advisor
How is ULIP different from Traditional Plans?
A: ULIPs (Unit Linked Insurance Plans) and Traditional Plans differ in various aspects:
- Insurance and investment components
- Transparency and flexibility
- Market-linked returns
- Charges and fees
It is important to evaluate your financial goals, risk tolerance, and preferences before deciding between ULIPs and Traditional Plans.
Is interest in ULIP taxable?
The tax treatment of ULIPs (Unit Linked Insurance Plans) depends on various factors, including the premium amount, policy term, and applicable tax laws in your country. ULIPs enjoy tax benefits under income tax laws. The premiums paid towards a ULIP may be eligible for tax deductions under specific sections of the income tax act.
What is the minimum premium amount for ULIP?
The minimum premium amount for ULIPs (Unit Linked Insurance Plans) varies depending on the insurance company and the specific ULIP product. Different ULIPs have different premium payment options.
Can I switch between different funds in ULIPs?
Yes, ULIPs offer the flexibility to switch between different funds based on your investment goals and risk appetite. Most ULIPs allow policyholders to switch their investments between the available funds offered by the insurance company.
Can I take a loan against my ULIP policy?
Yes, some ULIPs offer the option to take a loan against the policy. The availability of this feature may vary among insurance companies and specific ULIP products. The loan amount that can be availed is typically a percentage of the fund value of the ULIP.
is a ULIP taxable at maturity?
ULIP proceeds received at maturity, including the fund value and any additional benefits, are tax-free under Section 10(10D) of the Income Tax Act, subject to certain conditions. However, it's essential to consult with a tax advisor to understand the tax implications based on individual circumstances.
What is the difference between a ULIP & SIP?
ULIP (Unit Linked Insurance Plan) is a financial product that combines insurance coverage with investment options, allowing policyholders to invest in various funds. SIP (Systematic Investment Plan) is an investment strategy that involves investing a fixed amount regularly in mutual funds over a period to benefit from rupee-cost averaging and compound returns. While ULIPs offer insurance coverage along with investment benefits, SIPs focus solely on investment and do not provide insurance protection.
How Does ULIP Work?
ULIP works by pooling the premiums paid by policyholders into a common fund, which is then invested in equity, debt, or a combination of both based on the chosen fund option. The returns generated from these investments are reflected in the policyholder's fund value, which fluctuates with market performance.
You may avail of tax benefits under Section 80C and Section 10(10D) of Income Tax Act, 1961 subject to conditions as specified in those sections. Tax benefits are subject to change as per tax laws. Customer is advised to take an independent view from tax consultant.
The calculation is generated on the basis of information provided and does not constitute an offer or solicitation for the purpose of purchase or sale of any product. Further customer is the advised to go through the sales brochure before conducting any sale.
Grace Period
- There is a Grace Period of 30 days for the annual, half-yearly and quarterly mode, and 15 days for the monthly mode from the due date for payment of premium.
- The policy stays in force during the Grace Period.
Partial Withdrawals
Some ULIP instruments offer you an option of partial withdrawals. There are various conditions under which this can be done, but it varies from product to product.
Rider Details
Applicable Rider Charges will be deducted from the Fund value if the Riders are chosen. There are different rider options that can enhance your protection and it is recommended that you check them out.
Free Look Period
If the policyholder does not agree to the terms and conditions mentioned in the policy document, he/she can always return the policy. This can only be done within 15-30 days of accepting the policy depending on the channel through which the policy was bought. This period is called free-look period and the insurance company should refund the premium to the policyholder.
There are a few charges which can be deducted before the refund-
Goods and Services Tax and Cess
The premium figures are net of Goods and Services Tax and Cess, as applicable. Goods and Services Tax and Cess rates are subject to change from time to time as per the prevailing tax laws and/or any other laws.
Tax Benefit
Tax benefits are subject to conditions specified under the Income-tax Act, 1961. Tax laws are subject to amendments from time to time. Customer is advised to take an independent view from tax consultant.
Risk Factors:
The Unit Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender /withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year from inception.Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. Please know the associated risks and the applicable charges (along with the possibility of increase in charges), from your Insurance agent / Corporate Agent / Insurance Broker / Intermediary or policy document of the insurer. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. All benefits payable under the Policy are subject to the Tax Laws and other financial enactments, as they exist from time to time.
This website content is not a brochure and only gives the salient features of the plan.
Kotak e-InvestUIN - 107L121V01, Form No. - L121. Kotak Accidental Death Benefit Rider (Linked) UIN - 107A017V01 Form No: A017, Kotak Permanent Disability Benefit Rider (Linked) UIN -107A018V01 Form No: A018. This is an individual Unit-linked Non-participating Endowment Life Insurance Plan. For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale. For more details on riders, please read the Rider Brochure.
Kotak T.U.L.I.PUIN: 107L131V02, This is a non-participating unit linked Life Insurance Individual Savings Product. This product is available for sale through online mode. For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale. For more details on riders please read the Rider Brochure.
Kotak Invest MaximaUIN No.: 107L073V05, Form No: L073. This is an individual, unit linked non-par life insurance plan. For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
Kotak Single Invest PlusUIN No.: 107L075V04, Form No.: L075. This is a savings oriented unit linked endowment plan. For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
Kotak Single Invest AdvantageUIN No.: 107L065V05, Form No.: L065. This is a unit linked non-participating endowment plan. For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
Kotak PlatinumUIN No.: 107L067V07, Form No.: L067. Kotak Accidental Death Benefit Rider (Linked) UIN No.: 107A017V01 Form No.: A017. Kotak Permanent Disability Benefit Rider (Linked) UIN No.: 107A018V01 Form No.: A018. This is an individual, Unit-linked, Non-par, Endowment Life Insurance Plan. For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale. For details on riders please read rider brochure.
Kotak Ace InvestmentUIN No.: 107L064V06, Form No.: L064. Kotak Accidental Death Benefit Rider (Linked) UIN No.: 107A017V01 Form No.: A017. Kotak Permanent Disability Benefit Rider (Linked) UIN No.: 107A018V01 Form No.: A018. This is a unit linked non-participating endowment plan. For more details on risk factors, terms and conditions, please read sales brochure carefully before concluding a sale. For more details on riders please read the Rider Brochure.
Kotak Wealth Optima PlanUIN: 107L118V03, Form No: L118, Kotak Accidental Death Benefit Rider (Linked) UIN – 107A017V01 Form No: A017, Kotak Permanent Disability Benefit Rider (Linked) UIN – 107A018V01 Form No: A018. This is a unit linked non-participating endowment plan. For more details on risk factors, terms and conditions, please read sales brochure carefully before concluding a sale. For more details on riders, please read the rider brochure.
The assumed non-guaranteed rates of return chosen in the illustration are 4% p.a. and 8% p.a. These assumed rates of return are not guaranteed and they are not the upper or lower limits of what you might get back as the value of your policy is dependent on a number of factors including future investment performance. The actual experience may be different from the illustrated. Please note that Bonuses are NOT guaranteed and may be as declared by the Company from time to time.
Section 41-
Extract of Section 41 of the Insurance Act, 1938 as amended from time to time states: (1) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. (2) Any person making default in complying with the provisions of this section shall be liable for a penalty which may extend to ten lakhs rupees.
Section 45-
Fraud and Misstatement would be dealt with in accordance with provisions of Section 45 of the Insurance Act, 1938 as amended from time to time. Please visit our website for more details:Read more about section38_39_45_of_insurance_act_1938
BEWARE OF SPURIOUS PHONE CALLS AND FICTITIOUS/ FRAUDULENT OFFERS
IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.
Regd. Office: Kotak Mahindra Life Insurance Company Ltd. Reg No. 107; CIN : U66030MH2000PLC128503; Regd. Office: 8th Floor, Plot # C- 12, G- Block, BKC, Bandra (E), Mumbai – 400051 | Website: www.kotaklife.com | WhatsApp: 9321003007 | Toll Free: 1800 209 8800 | ARN No. KLI/24-25/E-WEB/652
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