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5 Reasons to Invest in ULIPs for Retirement
Tax-Exempt Maturity Value (& investments): ULIPs are amazing when it comes to accumulating tax-free wealth. You can invest as much as you want and build a corpus of multi-crores, all tax-free. All you need is to ensure that your annual investment into the plan does not exceed 10% of the life insurance sum assured in the policy. If your investment into the ULIP investment plan exceeds this ratio in any financial year, the returns on the excess amount will be taxable at maturity. If you are investing for more than 15 years this amount can be huge, which is highly likely for a retirement goal . It is also very likely that you’d want to allocate more surplus to the plan from time to time. The recommended solution is to make sure your life cover in ULIP plan is more than 10 times of your expected annual investment. For example, if you plan to start your investment with Rs. 2 lakhs a year, apply for a sum assured of Rs. 25-30 lakhs. This will allow you additional margin in the future to add more funds to the plan, without incurring tax liability on maturity value.
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Top 5 Reasons to Choose ULIPs For Building a Retirement Corpus
Tax-Exempt Maturity Value: ULIPs are good when it comes to accumulating tax-free wealth. You can invest as much as you want and build a corpus of multi-crores, all tax-free. All you need to ensure is that your annual investment into the plan does not exceed 10% of the life insurance sum assured in the policy. If your investment in the ULIP investment plan exceeds this ratio in any financial year, the returns on the excess amount will be taxable at maturity. If you are investing for more than 15 years, this amount can be substantial. which is often needed as a retirement goal . It is also very likely that you’d want to allocate more surplus to the plan from time to time. The recommended solution is to make sure your life cover in the ULIP plan is more than 10 times your expected annual investment. For example , if you plan to start your investment with ₹2 lakhs a year, apply for a sum assured of ₹25-30 lakhs. This will allow you additional margin in the future to add more funds to the plan, without incurring tax liability on the maturity value.