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ULIP vs Mutual fund

Hello Team,

When individuals are in the 30% tax bracket and are considering investing in mutual funds, it might be beneficial to consider Unit Linked Insurance Plans (ULIPs). This is because investments up to 2.5 lakh INR in ULIPs are tax-free, and the returns are also tax-free.

On the other hand, in the case of mutual funds, especially equity funds, there is a 10% Long-Term Capital Gains (LTCG) tax on gains exceeding 1 lakh INR per annum.

Therefore, considering the tax benefits, ULIPs could be a more tax-efficient investment option compared to mutual funds for individuals in the 30% tax bracket.

Let me know if you know thoughts ?
add nps also to the discussion.. and see it roll 🙂
 
i was offered an ulip for indus pioneer heritage and i did the calculations for pre tax returns on the spot and it turned around 4-5%
i laughed at him and told him i would rather invest in an indusind fd than this
ulip won't be so low.. after new irda changes.. charges have reduced.. They will be in line with MFs.. at better taxation.. just that you are. forced to buy insurance with it and. that you will need to hold for longer.. MFs you can start stop.. not ULIPs.. They are the most mis-sold and mis understood product.. and banks. also push them indiscriminately.. without looking at individual needs and plans
 
ulip won't be so low.. after new irda changes.. charges have reduced.. They will be in line with MFs.. at better taxation.. just that you are. forced to buy insurance with it and. that you will need to hold for longer.. MFs you can start stop.. not ULIPs.. They are the most mis-sold and mis understood product.. and banks. also push them indiscriminately.. without looking at individual needs and plans
this was around mid 2022
i did the calculation on spot and the value turned out to be around 4-5%
 
this was around mid 2022
i did the calculation on spot and the value turned out to be around 4-5%
cant be bro...Speak to. someone proper.. they will guide u.. insurance cos are not allowed to illustrate anything beyond 6-8% but money in the market will grow at same rate as any MF.. ( depending on category).. The. difference was premium to actual amount going into market.. That loss has reduced a lot.. Its a gd product if u want insurance + investment BUT.. I agree Term + MF is more convinenient... Needs to become part of a plan and not the ones pushed by the banks on poor customers
 
impossible.. 6% is impossible for ulip...Will be significantly higher in line with mfs.. but they have other disadv. Pls do the math accurately on the actual investment made into the market.
Ulip policies are diverse. Of course gone are the days of 30-40% allocation and other charges, still they are much worse than mf.

Gst and allocation components are upfront which eats up at least 15-16% (if you are lucky). Plus the component used for insurance. (Which are no where near tern insurance When you consider their flexibility, pricing, coverage)

So with ulip you are neither getting the flexibility, high return of mf even though you are taking the exact same risk. You are neither getting the security & immediate access to fund of fd with same similar return.
 
Ulip policies are diverse. Of course gone are the days of 30-40% allocation and other charges, still they are much worse than mf.

Gst and allocation components are upfront which eats up at least 15-16% (if you are lucky). Plus the component used for insurance. (Which are no where near tern insurance When you consider their flexibility, pricing, coverage)

So with ulip you are neither getting the flexibility, high return of mf even though you are taking the exact same risk. You are neither getting the security & immediate access to fund of fd with same similar return.
Well said. ULIP is neither an investment nor an insurance.
@_amit_ once summed up ULIP as U Loss I Profit for a bank.
 
Well said. ULIP is neither an investment nor an insurance.
@_amit_ once summed up ULIP as U Loss I Profit for a bank.
Ulip can only be considered as a negotiating tool for a cc or business loan by a miniscule minority.Those Hni who file itr much less than their income( so get at least 30% return while keeping cash reserve 🤣) & they maintain certain luxurious lifestyle. Plus they have means to show some of that expense as business expenses.

Unless someone spends 15-20L on that particular cc & use the heck out of all the non spend based features, they can't recoup the opportunity loss of not choosing mf+ti over ulip.
 
I closed my client's Ulip at a staggering 3.07%

And that two with two physical visits and 1 month of BS

I this return is in a Bull Market.

I hope you guys well.

Read Ulips asset allocation/ Cost and Opportunity Return carefully

View attachment 51794
This post is CA certified.
Very Good GIF by DINOSALLY
 
Ulip can only be considered as a negotiating tool for a cc or business loan by a miniscule minority.Those Hni who file itr much less than their income( so get at least 30% return while keeping cash reserve 🤣) & they maintain certain luxurious lifestyle. Plus they have means to show some of that expense as business expenses.

Unless someone spends 15-20L on that particular cc & use the heck out of all the non spend based features, they can't recoup the opportunity loss of not choosing mf+ti over ulip.
In one line, we can be happy without that CC. The effective savings will be more, which would have been eaten by the ULIP .
 
I closed my client's Ulip at a staggering 3.07%

And that two with two physical visits and 1 month of BS

I this return is in a Bull Market.

I hope you guys well.

Read Ulips asset allocation/ Cost and Opportunity Return carefully

View attachment 51794

This is when Midcap funds were giving what return 🤣. Imagine those time period when midcap give <15%

Usme fir tumhara fee alag.🤣
 
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For all the discussions on ULIPs v/s MFs, please understand that they are not comparable even though the are packaged and presented as such. They are wildly different products but share some features which makes a lot of people think it is comparable whereas in effect it has ended up being mis-sold essentially due to this.

Without getting into lengthy descriptions, simply think from the perspective of the buyer (that is you). You will opt for insurance if you have to go get insurance and you will opt for MF if you have to go for investment. ULIPs come into the picture only through influence, be it through someone trying to sell it to you or because you have been influnced by someone you know (basically someone who has invested in ULIPs).

Whether ULIPs fit your circumstances is something that either you will have to analyze yourself (in meticulous detail) or get help from an advisor. ULIP is not a go-to product but a fallback product unlike MF.
 
For all the discussions on ULIPs v/s MFs, please understand that they are not comparable even though the are packaged and presented as such. They are wildly different products but share some features which makes a lot of people think it is comparable whereas in effect it has ended up being mis-sold essentially due to this.

Without getting into lengthy descriptions, simply think from the perspective of the buyer (that is you). You will opt for insurance if you have to go get insurance and you will opt for MF if you have to go for investment. ULIPs come into the picture only through influence, be it through someone trying to sell it to you or because you have been influnced by someone you know (basically someone who has invested in ULIPs).

Whether ULIPs fit your circumstances is something that either you will have to analyze yourself (in meticulous detail) or get help from an advisor. ULIP is not a go-to product but a fallback product unlike MF.
i agree.. unilaterally killing a product with limited understanding seems to be the fad..
p. s - i dont sell insurance or anything such 🙂
 
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