By Apoorva Mandhani
Unit Linked Insurance Plans (ULIPs) have had a rather colorful history since their inception. However, the makeover of ULIPs from a costly bundled product to a low-cost option has transformed them into attractive investment options. ULIPs combine the benefits of protection and savings with a single instrument. The major advantage of a ULIP over a traditional wealth creation tool is the benefit of life cover. It, therefore, serves a dual purpose in allowing your money to grow, while at the same time, protecting your loved ones future from lifes unexpected turns. Moreover, ULIPs inculcate the habit of regular and disciplined savings, a routine which forms the bedrock for successful long-term financial planning. This is coupled with the potential for earning higher returns by utilizing the power of equity and debt funds.
ULIPs as an investment option become even more attractive when considered in the light of the kind of performance that equities have provided in the recent past. For instance, equities, as represented by stock market index, Sensex, have provided returns of over 15% year on year in last 15 years. Therefore, a ULIP is an investment that can immensely empower an individual, especially in light of the fact that it is amenable to customization.
The latest ULIP to watch out for
Combining protection and growth, along with the flexibility of investing in a range of options, is as lucrative as it gets. And Bajaj Allianz Life Insurance is coming up with a product on the 22nd June 2017, that may just prove to be a gamechanger – An investment product which can help customers realize their long-term financial goals, by giving them the benefit of market upsides for staying invested even during periods of uncertainty.
The plan claims to provide the cushion of security and growth to meet future financial goals, by allowing the flexibility of investing in a range of options. Bajaj Allianz Life Insurances non-participating, individual, unit-linked regular/ limited premium payment endowment plan provides two investment portfolio strategy choices. The product offers high life insurance cover, as well as gives the option of assuming the benefit of accelerated cancer cover, combined with income benefit.
The policy is open to people up to 60 years of age, and is eligible for maturity from 18 to 75 years. Bajaj Allianz Life Insurance also promises to allocate loyalty additions to the regular premium fund value as percentage of one annualized premium at the end of every 5th policy year. This will begin from the 10th policy year. Besides, in its quest to give adequate control to the policyholder, the product contains the option to choose from multiple policy terms, and also allows policyholders to take maturity benefit in installments with its settlement option. Furthermore, fund boosters will be added to the regular premium fund value at maturity.
Why it will be a wonderful tax saving instrument
Apart from spending habits, the Centres demonetization drive has affected the available investment options as well. Amidst all this, this ULIP can be considered a more reliable wealth creation solution over the long term, keeping in mind the returns, protection and tax savings, all combined in one product. Moreover, the premium paid under the plan is eligible for the tax benefits under Section 80C of the Income Tax Act, and the maturity benefit, death benefits and surrender value are eligible for tax benefits under Section 10(10D) of the Income Tax Act. Therefore, ULIP premiums can be deducted from the taxable income up to the permissible limit under Section 80C, which is currently at Rs. 1.5 lacs. The only condition attached to this is that the premium amount should be less than 10% of the sum assured under the ULIP. So, if the sum assured is Rs. 15 lacs and the premium paid is less than Rs. 1.5 lacs, then the entire amount can be claimed as deduction u/s 80C. If the premium is more than 10%, say Rs. 2 lacs for sum assured of Rs. 15 lacs, then the deduction amount is capped at 10% i.e. Rs. 1.5 lacs.
In addition to this, the ULIP also offers fantastic tax savings on withdrawals. The plan further permits individuals to invest excess cash through periodic top-ups. These top-ups may also be eligible for deduction under Section 80C as well as exemption under Section 10(10D), provided the condition of the premium not exceeding 10% of the sum assured is not violated. In any case, the additional returns generated through top-up investments will ensure that the potential tax liability does not affect the policyholders financial planning. This effectively makes a substantial addition to the amount that has been saved after the long ULIP term. Besides, this is what sets it apart from all other market-linked investments, as the gains from even a debt fund in the ULIP are tax-free in the hands of the investor.
When the right policy partner allows you to live carefree!
Choosing the right partner can make a world of difference when it comes to choosing the right insurance policy. With the new plan aiding in fortifying the brands overall product offerings and, therefore, helping the buyers to chart their financial planning in a worry-free manner, Bajaj Allianz Life Insurance stays true to its motto – #JiyoBefikar!
Besides, Bajaj Allianz Life Insurance has garnered a reputation of trust over the years, with an impressive claim settlement ratio of 99.16%, a measure which, along with related data, provides an objective yardstick to consumers to determine the reliability of their insurance providers. It not only settles most of its claims directly, via electronic transfer for quicker dispensing of claim money, it also pays an interest of 8.75% for every days delay, in case the claim settlement is delayed beyond 30 days. Considering the strong positive brand image associated with Bajaj Allianz Life Insurance, coupled with the offered incentives, their new product is definitely to watch out for.
Stay tuned with us for more updates about the new product launch!!
Get live updates on the brand’s Twitter Handle @BajajAllianzLIC and follow the brand on Facebook for more updates about the event.
References:
.1. http://www.dnaindia.com/personal-finance/report-here-s-why-to-have-ulip-s-three-pronged-advantages-2472713
.2. https://www.bajajallianzlife.com/claim-assistance.jsp
.3. http://economictimes.indiatimes.com/wealth/insure/why-ulips-are-one-of-the-best-tax-saving-instruments/articleshow/50865553.cms
.4. https://www.bajajallianzlife.com/ulip/future-wealth-gain.jsp
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