How ULIP is better than Mutual Fund when it comes to your financial planning


Talking about financial planning, we always refer to savings. Mutual Funds is the first name that comes to our mind when we think of investment. We have come a long way from mutual funds. Now, we are getting acquainted with a product that is winning the attention for its two-in-one potential. You will come across many investors confusing Mutual Funds with ULIPs or Unit Linked Insurance Plans. Each one of these is different though. While Mutual Funds is an investment instrument, ULIP is a combination of investment instrument and an insurance product. If we must weigh between ULIP and Mutual Fund to decide which is the best for financial planning, ULIP wins the race. Here’s why ULIP is better than Mutual Funds.

Financial Protection for Family

When you invest Rs. 10,000 in ULIP, you get basic life protection, and your family gets maturity or claim amount when you are not around. It is above the investment return you get. Investing the same amount in Mutual Funds, you only get your return. In case you die, and your family must survive the hardship of life, unlike ULIP, Mutual Funds will not pay for the cover. You need to pay the extra amount and buy another insurance cover.

Tax Savings

The more you save tax, the more you save your money which you can use for other expenses of yours. In case of ULIP, you get a complete exemption from tax under section 80C (Investment), 10 (10D) (Withdrawal), and Maturity. Tax saving is not easy with Mutual Funds because only ELSS schemes let you do so. Willing to save tax? ULIP is the answer.

Long-Term Investment Benefits

With the stock market condition being volatile, investing your hard-earned money in Mutual Funds implies risking the money to lose. In case of ULIP, you need to invest for long. Every investor has mentioned and reiterated that long-term investment reaps returns. Another essential point is the choice to pick from non-risk to very high-risk products. As a result, you are investing in an instrument that promises you long-term wealth by investing less. With 100 percent liquidity, Mutual Funds lure you to withdraw the amount whenever you want to.

No Exit Load

You have no limits for making switches from equity funds to debt funds once you have invested your money in ULIP. With Mutual Funds, you must first exit, liquidate and then re-invest. You cannot change from one fund to another without exiting. There are chances that you may spend the money on unnecessary wants. As a result, you cannot sustain the money that you invested. Liquidity may not be a good factor when planning to meet your financial goals.

Lump Sum Amount During Maturity

When you invest for long-run, you get more time to earn interest. This way, you earn more, and eventually, you get a lump sum amount. We know that a lump sum amount is always better than getting in fragments. After maturity, you can use the money for key events such as the marriage of your child, college education of your child, world tour and much more.

You can invest and exit any time you want in Mutual Funds. With ULIP, you have a lock-in period. By the time, you survive the lock-in period, you forget about it, and it is safe and growing. Hence, people have started to opt for ULIP.

If you are planning to get the best ULIP plan, you can check our products online and compare them. We have some of the best ULIP plans that might interest you. We have Max Life Fast Track Super Plan, Max Life Platinum Wealth Plan, and Max Life Maxis Super Plan. Every plan is different and has unique features. With immense investment benefits, you have the best way to plan your financial goals. Without financial planning, meeting financial goals become a little difficult. With a little planning and investment in ULIP, you take the right step to building your wealth. Choose from high growth fund, super growth fund, and slow growth fund based on their risk factors. Financial planning means growth and protection of money. ULIP is the best way to get both.