ULIP at Bajaj Finserv Markets

1. ULTIMATE ULIP INVESTMENT GUIDE What are ULIPs? A mix of investments and insurance, ULIP or Unit Linked Insurance Polices offer policyholders the potential of creating wealth with the additional security of a life cover. Under ULIP schemes, a portion of the premium paid by the insured is dedicated towards their life cover while the remaining amount is invested in funds that are either debt, equities or a combination. This allocation depends on the risk appetite of the policyholder and in turns dictates the returns in conjunction with market performance. ULIP: The Smartest Tax-Saving Tool Unit Linked Insurance Plan (ULIP) is a good investment avenue life insurance product. It is a market-linked product that has quickly gained popularity among investors. Many people are keen on investing in this product for the dual benefit it offers i.e. the benefits of a life insurance cover as well as the opportunity to invest in various market instruments. However, before you decide to park your money in ULIPs, you need to understand what it is, and how it can benefit you. What is ULIP? A ULIP is an investment cum insurance product that is slightly different from many other investment products. Unlike other products that help you achieve a singular goal of wealth creation, ULIPs offer you the opportunity to achieve the dual goal of security as well as wealth creation. By investing in this product, you can a 10x life insurance cover as well as the opportunity to invest in various market instruments such as stocks, bonds or funds (equity, debt or a hybrid). Benefits of ULIPs •Tax Benefits •Impact Of LTCG •Flexiblity •Return On Investment Why invest in ULIP? Tax Benefits: Now that you know what ULIPs are, you need to understand the benefits of investing in the same. When you invest in a ULIP plan, the premium amount paid by you is eligible for a deduction under Section 80C of the Income Tax Act, 1961. There is a limit of INR 1.5 lakhs on the deductible amount. However, the premium paid should be below 10% of the sum assured in the policy.

2. You can also enjoy tax-free withdrawals in a ULIP. You can withdraw the money when the policy matures, or in case of the death of the policyholder or partially withdraw the money when you wish to, after the lock-in period/maturity. The death benefit will remain tax-free. In case of maturity of the policy or partial withdrawal postmaturity, the proceeds will be exempt under Section 10 (10D) of the Income Tax Act, 1961. Please note, a ULIP plan comes with a lock-in period of 5 years. Impact of LTCG: Moreover, ULIP plans are also exempt from LTCG or Long-Term Capital Gains tax. This is also one of the reason why ULIPs have gained popularity over some of the existing investment products like Mutual Funds and ELSS (Equity Linked Savings Scheme) which are taxed at 10% on profits exceeding Rs. 1 Lakh. Flexibility: Further, ULIP plans allow you to choose your preferred asset class. This means you get to choose between stocks, bonds or other money market instruments. You can also opt for a combination of equity and debt depending on your risk appetite and life stage goals. You can easily switch between funds if you think that one fund is not performing as per your expectation. Thus, ULIPs are not only considered as an ideal investment option as compared to other investment products available in the market, but it is also a smart tax-saving tool due to deductions under Section 80C and 10D. With the ability to generate wealth over a period, ULIPs are considered as an ideal investment option for individuals across various age groups looking to invest for a long -term with a definite goal or objective. Advantages of Online ULIPs over Offline ULIPs Online transactions are fast becoming the most preferred mode for purchases, and ULIP plans are no exception to this trend. All of the leading insurance providers in India sell their ULIP plans online. Gone are the days when you had to rely on an agent or visit insurance company offices to invest in ULIPs. Thanks to online availability, investing in a ULIP policy has become as simple as buying clothes or shoes online. Listed below are the major advantages of buying ULIP plans online: – •Relatively Cheaper – Online ULIP plans are much cheaper than its offline counterparts as the cost of agent’s commission is eliminated. •Saves time – When you set out to buy offline ULIP plans, you will need to visit the insurance company branch or meet the agent. On the other hand, you can invest in online ULIPs from the comfort of your home or even on the go. •Less Paperwork – Buying ULIPs online involves less paperwork. All you need to do is visit the official website of the chosen insurance company and invest in a ULIP by filling up the application form and uploading a few documents.

3. •Safer – Buying ULIP plans online is relatively safer than buying offline. This is because agents are not involved while buying a ULIP plan online. Agents may suggest ULIP plans that pay them a higher commission rather than suggesting the one that’s best for you. Hence, it is not wise to rely on an agent’s advice completely. However, with online ULIP plans, you are free to make your own decisions based on the benefits of the policy listed on the website. As you can see, buying a ULIP plan online is not only convenient but also economical and safer than offline policies. However, you still need to choose carefully, as there are numerous ULIP plans available in the market today. Here are some tips that will help you choose the right ULIP policy online: – •Look for ULIP benefits such as flexibility to switch, transparent charges, adequate life coverage etc. before finalizing a plan. •ULIP returns are dependent on the performance of the market and the type of fund you choose. If you want to generate higher returns, consider investing in equity ULIP schemes. However, bear in mind that equity schemes also come with higher risks. •Ensure that the life cover is adequate, to help your family live the life you planned for them. •Choose debt, equity or balanced funds as per your risk appetite. At Finserv Markets, we offer ULIP plans such as Bajaj Allianz Future Gain ULIP and Bajaj Allianz Life Goal Assure ULIP that are flexible and let you manage your investments according to your needs, goals and choices. To know more or invest in these ULIP plans, visit Finserv Markets today! ULIPs Classification – Type 1 and Type 2 ULIPs Over the last few years, Unit Linked Insurance Plans (or ULIPs) have emerged as a popular financial instrument. The interest in this product has piqued for multiple reasons: 1) ULIPs are a blend of insurance and investments, 2) The tax benefits provided by these plans help save a considerable amount of money and 3) Investors can choose from various investment strategies to maximise their returns. What’s more? ULIPs offer flexibility to the policyholder in terms of premium amount or payment frequency. Moreover, the various charges/fees associated with ULIP products has also decreased recently. In your quest for the best ulip plans, it is important to know the different types of ulip available.

4. The premium paid towards a ULIP plan is typically split into two parts – one part goes towards providing a life insurance cover to the policyholder, and the other part is invested in market instruments like stocks, bonds or funds (equity, debt or hybrid). Depending upon the risk appetite of the investor, he / she can choose the type of fund they want to invest in. An aggressive investor may put his money in equity only funds, while a conservative investor may put his money in debt funds or a balanced mix of both. Most ULIP investors are aware of these basic benefits, yet there is still some ambiguity when it comes to choosing a good ULIP plan. Very few people know that there are actually two types of ULIP plans. It is important for ULIP policyholders to understand the difference between the two types ulip policy types that are available in the market today, namely – type 1 and type 2 ULIPs. To understand the fundamental difference between these two, we need to look at the basic structure of ULIPs carefully. As mentioned earlier, in an ULIP plan, the premium paid by the policyholder gets divided into two parts. A life insurance cover and an investment. If you have invested in type 1 ULIPs, and unfortunately there is an unforeseen incident, the insurance company will pay your nominee the sum assured or the accumulated fund value, whichever is higher. On the other hand, if you have invested in type 2 ULIPs, the insurance company will pay your nominee the sum assured plus the accumulated fund value. In type 1 ULIPs, the insurance company initially faces the risk of paying the entire sum assured, in case of the policyholder’s unfortunate demise. However, this risk decreases year after year as the policyholder regularly pays his premium. Also, the returns gained, on the portion of premium invested, accumulate over the years. Obviously, one would think that type 2 ULIPs are better, as the financial benefit derived from these plans is higher. Most insurance companies charge the policyholder an extra cost for the added risk that they assume. Hence, policyholders have to pay a higher premium for type 2 ULIP plans. In both cases, type 1 and type 2 ULIPs, it is advisable to invest from a long term perspective. The longer your policy period, higher will be the financial benefits derived from the same. Now that you know the difference between the two types of ULIP plans, get a free investment plan quote at Finserv Markets and buy one of the best ULIP plans in India available today. Difference between a Participating & a Non-Participating Policy If you are familiar with Life Insurance, you may already be aware that there are many types of Life Insurance policies such as Term Insurance, Whole Life Policy, Unit Linked Insurance Plans (ULIPs) etc. Participating and Non-Participating insurance is a broad classification of Life Insurance policies based on their participation in the company profits. Participating policies pay out dividends to the policyholders or in other words, the policyholders “participate” in the company profits which is paid in the form of dividends. Participating policies not only provide

5. life insurance protection but also offers returns. For example, ULIP plans pay out bonuses or dividends which is why they are classified under Participating policies. On the other hand, Non-Participating Life Insurance policies do not pay out any dividends and hence the policyholders do not get to participate in the company profits. A major benefit of Non-Participating policies is that the premiums are relatively lower than Participating policies. For example, Term Insurance or Permanent Life Insurance policy is a Non-Participating policy as it doesn’t pay out any dividends. Apart from these basic differences, below are some key points to understand about participating vs non participating insurance. Guaranteed Vs Non-Guaranteed Benefits A Non-Participating policy offers only guaranteed benefits. On the other hand, Participating Policies offer both guaranteed as well as non-guaranteed benefits. The sum assured payable upon maturity or death of the policyholder is the guaranteed benefit. Alternatively, the Non- guaranteed benefit includes cash dividends and bonuses. Secured Vs Unsecured Returns A Non-Participating policy is somewhat secured. However, Participating Policies are less secure in the sense that future bonuses are not guaranteed. Therefore, in Non-Participating policies, you do not have to worry about paying a higher premium if the insurance company did not fare well in a particular year. In Non-Participating policies, both the premium and benefit amount is safeguarded from any fluctuations in the economy. Why A Participating Policy May Be the Best? For many, Participating Insurance Plans like ULIPs represents a very safe and stable investment vehicle that offers dual benefits of insurance and returns. The returns received from ULIP plans are responsive to market interest rates. Moreover, there are also tax advantages as ULIPs fall under the Exempt-Exempt-Exempt (EEE) tax structure i.e. exempted at investment stage, exempted at accrual and exempted at withdrawal. The cash value in your Life Insurance policy is further protected both by the total assets of the Life Insurance company, as well as the insurance regulator IRDA’s guidelines. If you are looking for a stable investment with good returns, tax advantages as well as Life Insurance benefits, a Participating policy like ULIP is the best choice. You can buy a ULIP plan online with Finserv Markets to enjoy all of these benefits. Participating policies exists with a relatively insignificant risk while non-participating life insurance policies are more secured as they offer only guaranteed benefits. However, there are safe and stable participating policies which offer good returns and have tax benefits which one can invest in without worrying about the returns.