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5 Things You Must Know About Tax Benefits Of ULIPs

Published On Jan 13, 2022 10:00 AM By InsuranceDekho

The Unit Linked Insurance Program (ULIP) is very much a finance and insurance package wherein the lifetime guaranteed provides health insurance as part and his or her overall financial strategy. The fee alternative, which can then be selected anywhere at moment even during policy's duration and at maturity, has been one of the standout advantages of ULIPs. People preferred ULIPs over other investment opportunities because of their versatility. It is viewed as a credible method of reaching long-term wealth desired objectives. This is because it combines returns, financial benefits, and protection.

It is really a particular type of financial strategy which also contains factors linked. A percentage of the prepayments is dedicated to insurance coverage, whereas the balance is placed in institutions of their selection. Various insurance carriers provide such a range of investment opportunities.

5 Things You Must Know About Tax Benefits Of ULIPs

5 Things You Must Know About Tax Benefits Of ULIPs

Below are the 5 things you must know about the tax benefits of ULIPs:

  • Policy Term Flexibility

Long-term investment plans, Unit Linked Insurance Plans (ULIPs), are a type of unit-linked insurance. As a result, most of them have a 5-year lock-in period. You can choose from a variety of ULIPs depending on the policy's length and lock-in term. There is a five-year lock-in period on all Future Generali ULIPs.

  • Compare ULIP Features

With the help of an online comparison tool, choosing a ULIP becomes easy. You can use these tools to examine different Unit Linked Insurance Plans and choose the one that provides the best mix of investment-related risks and returns.

  • Ability To Choose From A Variety Of Funds

A Unit Linked Insurance Program enables you can choose between a multitude of portfolio opportunities to find one which best serves your appetite for risk. You can choose whether to invest in a stock if you've had a high degree of confidence. You can participate in borrowing or perhaps a blend fund should you want to obtain a less risky route.

  • Tax Benefits

A ULIP provides tax benefits to a person for premiums paid under section 80C of the Income Tax Act of 1961, subject to the requirements and limits set forth therein.

Section 10 (10D) of the Income Tax Act of 1961 exempts the death and maturity benefit received from a ULIP, subject to the criteria mentioned therein. When an amount paid to a policyholder is not exempt under section 10(10D), it is subject to tax deduction at source under section 194DA of the Act.

  • Administration Charges

For something like the management of your insurance, Future Generali pays back these costs each week. In particular, those fees are calculated as a percentage of the monthly premium (0.1 percent of the Annualized Premium, to be exact).

As a corollary, the with very an annual insurance admin fee of Rs.50 to Rs.500. The business pays back them from the unit balance at the beginning of each season by canceling out the unit in balance.


Amongst the most effective tax-advantaged asset classes commercially available is ULIPs (United Linked Insurance Plans). It blends providing liquidity and life insurance coverage within one handy solution. It's unusual to encounter an investment strategy that incorporates every one of the rewards of a ULIP. It delivers higher returns than tax-saving bank deposits, NSCs, and postal service deposits with much the same 5-year lock-in term. The favorite aspect is that these are your ULIP monthly installments but also the maturation benefit is income. ULIPs have traditionally been recognized among the most tax-efficient investment options available in the United States. When it relates to ULIP affects the market, it was a wonderful way to obtain funding.

You may also like to read - How to Choose The Right ULIP Plan In 5 Easy Steps?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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