Are ULIPs the Best Tax-saving Investment Options?

Demonetization has not only affected the spending habits of people but has also affected their investments. Banks have lowered the interest rates on FD (fixed deposits) and we expect that the rates will go down further. Looking at the current market situation, Life insurance has become one of the most preferred options for those who are seeking the best tax-saving option to invest their money.

Read more
Best ULIP Plans
  • Guaranteed Tax Savings

    Guaranteed Tax Savings

    Under sec 80C & 10(10D)
  • savings

    ₹1 Crore

    Invest ₹10k Per Month*
  • Zero LTCG Tax

    Zero LTCG Tax

    Unlike 10% in Mutual Funds
We are rated~
6.7 Crore
Registered Consumers
Insurance Partners
3.4 Crore
Policies Sold

Top performing plans with High Returns*

Invest ₹10K/month & Get ₹1 Crore returns*

We don’t spam
Please wait. We Are Processing..
Your personal information is secure with us
Plans available only for people of Indian origin By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs #Discount offered by insurance company
Get Updates on WhatsApp
We are rated~
6.7 Crore
Registered Consumers
Insurance Partners
3.4 Crore
Policies Sold

Among all this hustle and bustle, ULIP (Unit Linked Insurance Plan) has emerged out as quite a reliable solution for wealth creation in the long run. The main reason behind this rise is the benefits this plan offers to its policyholders. Users get good returns, financial protection and also save their taxes. 

ULIP offers several features that are beneficial for investors, such as:

  • Investing premium in a mix of equity and debt funds in varying proportions
  • Inter-fund transfers via switches
  • Tax exemption

ULIP is one of the best investment options, which is different from all the other market-linked investment plans. The main reason behind this is that a ULIP offers the dual benefits of investment and insurance and it also offers tax exemptions under Section 80C and 10(10D) of the Income Tax Act. 

Saving money is the first step towards financial planning, but when it comes to sensible planning you need to make a strategy that helps you to save your taxes. Nowadays, we have several tax-saving options such as life insurance plans, PFs and PPFs, ULIPs, ELSS investments, and more. 

As we have a lot of investment options available in front of us, we get confused while picking out the best option. So, to pick the best option, you need to find out the one that offers benefits such as wealth protection, tax savings, value appreciation, and strategic flexibility. The traditional insurance plans certainly offer life protection as well as tax benefits, but they offer limited scope for wealth creation. 

When it comes to mutual funds, they offer good returns with zero life protection and limited opportunities for saving taxes. Traditional tax savings options (like PFs) are unable to produce inflation-proof returns in the long run. However, ULIP is an efficient financial tool that works as a good investment option, and also offers additional benefits. Let’s find out! 

Strategic Planning 

For a period of a minimum of five years, the policyholder is not allowed to make any withdrawal. This period is called the lock-in period under ULIP. Even if partial withdrawals are allowed, they cannot surpass 20% of the fund value, as assured at the time of taking the policy. Above all, these withdrawals are completely tax-free, if carried out after completing the lock-in period. 

This feature helps the policyholder to use ULIP as a tool of investment to fulfill their financial goals. If you want to make a lot of money for buying a house in the near future or for the higher education or marriage of your kids, you should start investing in a ULIP as soon as possible. It will not only help you grow money but will also keep your loved ones protected against the financial uncertainties of life. 

Tax-exemptions on Premiums

The money invested in Unit Linked Insurance Plans is invested further in debt, equity, or money market instruments. Depending on certain conditions, the policyholders enjoy the benefit of the tax deduction on the premiums paid. This rule is stated under Section 80C of the Income Tax Act. The current limit for tax deduction is up to Rs. 1.5 lakh, which means that the premium paid for your ULIP will be deducted from your taxable income. 

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Top-up your Investments 

ULIPs offer periodic top-ups that allow the policyholders to invest their excess cash. If the premium paid for these top-ups does not exceed 10% of the assured sum, then the policyholder can also leverage tax benefits under section 80C and also exemptions under section 10 D. 

Above all, these exemptions do not hamper your financial planning, as these top-up investments generate additional returns to handle your tax liabilities.

The Final Verdict 

Those who want high returns, tax exemptions, and assured life cover simultaneously must invest in ULIPs. People often invest in mutual funds besides purchasing a life insurance plan. However, balancing multiple investments can prove to be a difficult task. Therefore, you need to search for a product that offers comprehensive benefits. In that sense, ULIP is the best instrument that helps you enjoy multiple benefits like insurance, savings, investments, and tax-saving. They provide you with a high return, decent financial life cover, and tax exemptions. Above all, the risk associated with ULIP varies from high to low. So, ULIP is indeed the best tax-saving tool for investment.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^Tax benefit are for Investments made up to Rs.2.5 L/ yr.
~Source - Google Review Rating available on:-

Grow your wealth & meet your Financial goals

Systematically Invest in high growth plans with returns upto 18%*
View plans
Standard T & C Apply*
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
Invest More Get More!
You Get
₹1 Crores*
You Invest
You Get
₹80 Lakhs*
You Invest
You Get
₹50 Lakhs*
You Invest
capital guarantee
Investment Calculator
  • One time
  • Monthly
/ Year
Sensex has given 10% return from 2010 - 2020
You invest
You get
View plans

Ulip plans articles

Recent Articles
Popular Articles
Tata Life Flexi Growth Fund NFO

30 Nov 2023

Tata Life Flexi Growth Fund is an open-ended New Fund Offering
Read more
Unit Linked Health Plan

21 Nov 2023

A Unit Linked Health Plan (ULHP) is a type of insurance product
Read more
Bajaj Allianz Life Midcap Index Fund NFO

31 Oct 2023

Bajaj Allianz Life Midcap Index Fund is a newly launched New
Read more
How Does a ULIP Works?

30 Oct 2023

A Unit Linked Insurance Plan (ULIP) is a unique financial
Read more
ULIP vs Life Insurance

30 Oct 2023

Individuals planning to buy insurance are often confused with
Read more
ULIP Calculator
A ULIP Calculator is a financial tool designed to help you compare ULIP plans and estimate the maturity amount
Read more
Bajaj Allianz Life Midcap Index Fund NFO
Bajaj Allianz Life Midcap Index Fund is a newly launched New Fund Offering (NFO) offered by Bajaj Allianz Life
Read more
SBI Life Smart Privilege Plan: Benefits & Features
SBI Life Smart Privilege is a unit-linked, non-participating life insurance plan offered by SBI Life Insurance
Read more
7 Things to Know About the Tax Benefits of ULIPs
Nowadays, Unit Linked Insurance Plans, i.e., ULIPs, have evolved as the popular income tax saving investment
Read more
Flexi Cap Fund
A Flexi Cap Fund is a type of investment option that allows you to put your money into a mix of different-sized
Read more

  • Zero% commission
  • No hidden charges
  • Expert Advice
  • 100% calls recorded
Invest ₹10k/month Get ₹1Cr
Tax free on maturity*
Mobile +91
*T&C Applied.
Download the Policybazaar app
to manage all your insurance needs.