Is ELSS and ULIP same?

What are the disadvantages of ELSS?

Market volatility: ELSS funds invest primarily in equities, making them susceptible to market fluctuations and exposing investors to higher risk levels. Lock-in period: ELSS funds have a mandatory lock-in period of three years, limiting liquidity and flexibility compared to other investment options.

Who should not invest in ELSS?

You want short-term gains

Chasing quick returns through ELSS funds might not always work, and hence, you should not invest in ELSS funds if you want returns quickly. ELSS funds may be suitable for you only if you have a longer investment horizon.

What are the disadvantages of ULIP?

The disadvantages of ULIP plan are the lock-in period of five years and the charges like premium allotment charges, fund management charges, surrender charges, etc. The high costs can erode the returns in the long run. Study the ULIP advantages and disadvantages before proceeding to invest in the plan.

Does ELSS give better returns?

National Pension System (NPS) and Equity-Linked Savings Scheme (ELSS) are two of the most popular tax-saving investment options under Section 80C of the Income Tax Act, 1961. ELSS is the better of the two as it has the potential to provide higher returns and come with a lock-in period of just three years.

Which is better, FD or ULIP?

Is ULIP better than FD? Yes, ULIPs are a better place to invest than Fixed Deposits. Apart from ensuring that your money is safe and providing you with life cover, they also give you a chance to earn by investing your money. This versatility is what makes them one of the best avenues to put your money in.

Is ULIP high risk?

What are the risks associated with ULIPs? The risks associated with ULIPs depend on the type of funds you choose. Equity funds carry higher risk, while debt funds have lower risk. Hybrid funds offer a balanced approach with moderate risk.

Which mutual fund is best for long term?

Does ELSS attract tax?

Tax Implications on ELSS

Short-term capital gains (STCG) attract a tax of 15%, while long-term capital gains (LTCG) are taxable only if the gains exceed ₹1 lakh during the financial year. Long-term capital gains attract a tax of 10 percent on the amount exceeding ₹1 lakh.

Is ULIP better than PPF?

ULIPs offer life insurance coverage and market-linked investments. Hence, choose a ULIP if you are looking for an instrument that offers insurance and investment benefits. While PPF accounts offer fixed returns, the returns on ULIPs can vary based on the performance of the underlying securities.

Is SIP better than ELSS?

The main difference between ELSS (Equity-Linked Savings Scheme) and SIP (Systematic Investment Plan) is that ELSS is a tax-saving investment option, while SIP is a method to invest in mutual funds regularly, with or without tax benefits, providing flexibility in investment choice and strategy.

Which is better, ULIP or SIP?

If you want to make a disciplined investment with the benefits of lower costs, better performance, and more fund options, you can opt for SIP. On the other hand, if you are interested in rewards, tax advantages, simple switching options and loyalty bonuses along with life insurance cover, you may choose a ULIP plan.

What happens if I stop paying ULIP?

If you have not paid the premiums for the ULIP investment, you will receive a grace period of about 30 days. If the premiums still remain unpaid, the fund value, minus the applicable discontinuance charges, will be credited to a discontinued fund. The ULIP plan will remain invested in the discontinued policy fund.

Does ULIP come under 80C?

The Government of India levies taxes^* on the income that you earn. Premiums paid towards life insurance products such as ULIPs are eligible for deduction from taxable income under Section 80C of the Income Tax Act, 1961 up to ₹ 1.5 lakh per financial year.

Is ULIP banned in India?

The Insurance Regulatory and Development Authority of India (IRDAI) in a master circular dated June 19, 2024 has barred insurers from advertising unit linked and/or index linked products as 'investment products'. It has laid out detailed guidelines to be followed by insurers while advertising insurance products.

What happens to ULIP after maturity?

Upon policy maturity, ULIPs pay out the fund value as a maturity benefit as per the policy terms & conditions. ULIPs also allow the benefits of partial withdrawals, switching, premium redirection, top-up premium, etc., so that you can manage your investments per your needs.

Is the lic ULIP plan good?

High Claim Settlement Ratio. LIC has a claim settlement ratio of 98.74%, meaning the company settles the claim hassle-free. Hence, while investing in LIC ULIP, be stress-free about the claims and customer support.

Which is best, PPF or ELSS?

PPF is the most tax friendly 80C investment option since its maturity proceeds are entirely tax free. After PPF, ELSS is one of the most tax friendly 80C investment options. ELSS capital gains of up to Rs 1 lakh in a financial year are tax free. Capital gains in excess of Rs 1 lakh are taxed at 10%.

Is demat required for ELSS?

How do I invest in ELSS? You don't need a demat account to invest in a mutual fund. You can buy mutual funds, including Equity Linked Savings Schemes (ELSS), through an AMFI-certified mutual fund advisor or directly through a fund house's website.

Can there be loss in ELSS?

ELSS investments are considered to be risky. During the market upheaval, one may even lose out on their initial investments. So it is better that you understand your risk appetite and do not invest more than your tolerance.