ULIPs

Best SIP Funds to Invest Online 

Returns: 9.9-11.9% (Past five years) 

Despite attempts by distributors and insurance companies, the perception about Ulips has not changed much. Investors still consider them very costly and financial advisers continue to hold them in contempt. But it is time to bury the shady past of Ulips. New Ulips launched by insurance companies are low on costs, which translates into better returns for investors. 

Aggressive Ulip plans earned over 20% in the past one year. That may not appear impressive compared to the 30-35% that equity mutual funds earned for investors. The 11.96% returns from Ulips in the past five years are not even a patch on what equity funds have earned since 2012. Besides, some of the charges of the Ulip are not deducted from the NAV so the actual returns for the investors may be even lower. 

But Ulips have one distinct advantage over mutual funds. Switching from equity to debt or vice versa does not have any tax implications. Being insurance policies, the income and capital gains from these plans is tax free under Section 10(10D). This makes a Ulip a convenient rebalancing tool for investors who reset their portfolio's asset allocation every year. 

 They will also be useful for investors wanting to put money in debt funds but are deterred by the taxation of short-term gains. The minimum period for long-term capital gains from debt and debt-oriented funds has been increased from one year to three years. If held for less than three years, the gains are added to your income and taxed at the normal rate. But there is no tax on short-term gains from Ulips. 

Smart tip: If investing large sum, opt for liquid or debt fund of the Ulip and gradually shift the money to equity funds. 

What to see in a Ulip 
CHARGES: The most important consideration. Some charges are built into the NAV while others are levied by deducting units. Look up all charges mentioned in the brochure. 
FUND OPTIONS: Look at the various fund options available. There are three basic funds: equity, debt and liquid, but some insurers offer hybrid funds and other options. 
SWITCHING: Know how much the Ulip will charge for switching from one option to another. Normally 3-4 switches a year are free, though some offer up to 12 free switches. 
WITHDRAWALS AND TOP UPS: Find out rules relating to top up investments and withdrawals from policy. 

COVER: Be sure whether your Ulip will pay only the sum assured or also the fund value in case of a mishappening. Some Ulips pay only the sum assured, though their premium is also lower. 

SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

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