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Thread: MFs Vs ULIPs

  1. #21
    PolicyWala Newbie
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    ADVANTAGES ULIPS
    •Can easily rebalance your risk between equity and debt without any tax implications.
    •Best suited for medium risk taking individuals who wish to invest in equity and debt funds (at least 40% or higher exposure to debt). No additional tax burden for those investing mainly in debt unlike in MFs.

    ADVANTAGE MFS
    •Better returns than ULIPs.
    •Lower charges than ULIPs.

    •Very flexible and enables you to switch your investments from non performing MF's to better performing MFs
    •Very Liquid can be redeemed at anytime.
    •Best suited for medium to high risk taking individuals who wish to invest a significant portion in equity funds (at least 65% exposure in equities).


  2. #22
    PolicyWala Newbie
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    Liquidity
    MFs: Very liquid. You can sell your MF units any time. Three years lockin in ELSS. Some MF's like those from Reliance have introduced redemptions at ATMs.
    ULIPs: Limited liquidity. Need to stay invested for the minimum number of years specified before you can redeem.

  3. #23
    PW Fan LastWarrior's Avatar
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    ULIPs may be good in the long run, but understanding them is very very complex. In the absence of the agent (after the deal). In practical, its very painful to futher follow up of fund switching, premium reminder, change of address or job. A pure term plan plus diversified MFs will do all work.

  4. #24
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    MF Vs ULIPs
    Investment should not be mixed with insurance.
    Mutual fund is for 1-5 yrs investment, ULIP is investment plus insurance.
    It is advisable to take Mutual fund plus term insurance(low cost) instead of ULIP(High cost).

  5. #25
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    Key features of ULIPs:
    1. Combination of investment + insurance.
    2. Long-term, systematic and goal-based investment.
    3. Automatic asset allocation/Diversification in several asset classes.
    4. Flexibility and transparency.
    5. Switching funds at no extra cost.
    6. Tax benefits under Section 80c of the Income Tax Act.

  6. #26
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    ULIP's... No..

    Go for a 'Diversified Mutual Fund', and 'Term Policy by LIC'.

  7. #27
    Moderator Expert's Avatar
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    Why ULIPs are not good over MFs?
    1- Higher Agent Commissions
    2- Costlier exit options
    3- No Track record
    4- Larger Commitments


    Good article read here - ET.com
    * SAFE
    Self Appointed Financial Expert

  8. #28
    PolicyWala NewBie
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    I think it will be wise to keep insurance, ie term insurance & SIP investments via MFs preferably dividend seperately bcos your charges for term insurance are much cheaper and if you take past 10 years records of good MFs the returns are much greater than your Ulips, whereas the charges in Ulips are much higher and mostly goes unknown as bundled.

  9. #29
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    Advantages to ULIP Plans -
    1. Transparency
    2. Tax free returns
    3. Switch between various options
    4. Tax Benefits

  10. #30
    Super Moderator PolicyWala's Avatar
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    Quote Originally Posted by Mahesh View Post
    Advantages to ULIP Plans -
    1. Transparency
    2. Tax free returns
    3. Switch between various options
    4. Tax Benefits
    Mahesh - I agree with all the above advantages, but if you compare with the dis-advantages than going with term + MFs is the best option.


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