Do ULIPS Look Better Than Mutual Funds after Long Term Capital
Gains

Why equity mutual funds were better investment options before LTCG &
Why they still continue to be a better investment even today

Reason 1 : Mutual Funds give better returns than ULIPS

In ULIPS not your entire premium is invested, Returns you see are not on the premium but on the actual invested amount. In Mutual Funds all
charges are cut in a single shot via expense ratio and then NAV is
calculated Mutual Fund is a simple math NAV * Number of Units which
gives the value of your investment, Its crystal clear, Whereas in ULIPS
there are huge array of charges
Premium allocation charge which is deducted upfront
Policy admin charge gets deducted every month which can go maximum
up to 500/- per month
Fund management charge at 1.35% after this NAV is arrived at, Then the
mortality charges through which your Insurance is funded gets deducted
every month by deduction of units, Mortality charges also increases as
the age increases, This is the precise reason why insurance & investment
should never be mixed, Maximum chunk of charges are deducted during
first 5 years of your investment in which the need of insurance company
through which you had stay invested is over, Now its need of investor to
stay invested to see some returns, Units are no longer cut when fund
value reaches the sum assured, ULIPS can bring down your returns by 5-
10%, A pure term plan is a better option for your insurance needs, Term
plan premium component looks very small with inflation at later part of
your life. If returns are 12% tax works out to be 1.2% still mutual fund
looks better as difference in returns are big
Reason 2
No lock in when it comes to open ended mutual funds & in case of ELSS
its only 3 years as compared to a 5 year lock in of ULIP, MF’S offer you

Having worked several years into Life Insurance, Health Insurance, Mutual Funds & Closely with people into financial planning i am now putting my first step in investment advisory

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