How To Buy A ULIP Online In India?
Published On Dec 25, 2021
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Clients are becoming much more aware of the fees associated with financial products. After all, costs eat into profits, and the long-term consequences are more severe.
The unit-linked insurance plan (ULIP) is one of the market-linked tax-saving options that many taxpayers are seriously considering, owing to its low cost in its online version. Most life insurance companies offer online Ulips, which may be purchased by going directly to the company's website.
How To Buy A ULIP Online In India?
Since you're thinking about buying a ULIP online, here are a few things you must know:
Why Are ULIPs Available Online At Such A Low Price?
Endowment plans are eligible for an income tax deduction under Section 80C if the life insurance provided is equal to or greater than 10 times the annual premium paid. These policies would thus be eligible for tax-free maturity returns under Section 10(10 D) of the Income Tax Act of 1961.
It's worth noting that when it comes to long-term savings, endowment plans offer the best returns and security. In most situations, the plans demand that a premium be paid on a yearly basis. Customers who choose these plans should check their ability to pay premiums over time to prevent having their policies lapse. Personal needs, income, risk appetite, present life stage, future demands, and other considerations should all be examined before deciding which policy to purchase.
Are ULIPs The Most Tax-Efficient?
Aside from the price, there are tax advantages to investing in Ulips. Compared to direct equities and equity mutual funds, Ulips provide a long-term capital gains tax (LTCG) benefit on investments. In addition, even if the premium was paid in instalments, ULIP investors can reclaim the entire amount at the end of five years, however, it is advised to stay invested for longer. Only units or contributions that have completed the lock-in period can be redeemed in an ELSS or a tax-deferred savings account.
Online ULIP’s Buying Process
Before starting the online purchasing process, it's a good idea to familiarise yourself with the entire process of purchasing ULIPs online, from filling out personal, medical, and income information to disclosing material information, uploading documents, making a payment, and finally receiving the policy document. Importantly, find out from the assurer, by calling them, when you will receive documentation of the Section 80C deduction for the ULIP premium you paid. The majority of firms, including ours, have a smooth onboarding procedure. Documents can be scanned and sent at the time of purchase or later. Medical tests, if required, are simply handled by home visits at the customer's convenience.
What To Do?
Ulips over the internet offers a tax and cost advantage over other alternatives. Take into account the assurer's fund performance before making a decision. Link it to a long-term objective for better results, and keep the ULIP going until it reaches maturity. Making an informed buying decision as an online investor might assist you to avoid being misled into buying something you don't want.
What Are The Costs Associated With An Online ULIP?
Unlike in the past, when expenses were not capped and online Ulips were not available, today's Ulips costs are not only capped but also significantly less expensive than their older forms. The majority of online Ulips do not have a Premium Allocation Charge, and the Policy Administration Fee is also rather inexpensive. Remember that mortality charges will apply until the fund value falls below the ULIP sum assured. Following that, where the death benefit is more than the fund value and sum assured, no mortality charges are applied in Ulips.
ULIPs, or Unit-Linked Insurance Plans, are a type of insurance policy that integrates life cover with the ability to invest. A policyholder can protect their loved ones from unforeseen threats while also building wealth to achieve future goals with the help of ULIPs. A portion of the policy's premium is invested in the specified fund type, while the remainder is utilised to secure life insurance coverage.
You can select an investment fund to generate lucrative returns from ULIPs based on your risk appetite and long-term goals.
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.