Unit-Linked Investment Plans are a unique offering in today’s investment and insurance landscape, and companies are rolling out ULIPs to serve different goals for the buyers. People are now buying ULIPs as investments towards their retirement planning and life goals. But have you considered looking further to pension schemes after buying a ULIP? While ULIPs are great tools for retirement planning, pension plans have their own unique value proposition. Pension plans definitely deserve a consideration even if you already have a ULIP in place. Let’s see why.
ULIPs like the Invest 4G Plan work for retirement planning because they help you create a generous corpus of funds, depending upon your needs and financial capabilities at the time. They allow you to control the amount of risk that your funds are subject to, while at the same time, exposing your funds to their maximum potential. Subject to the market conditions, long term ULIPs have the potential to turn the buyer’s funds accumulated over time, into a sizable corpus by maturity. Other benefits of Invest 4G ULIP by Canara HSBC Oriental Bank of Life Insurance include:
Pension plans basically entitle you to regular and periodic disbursement in return for a lump sum amount or reimbursement of the premiums that you made through the policy term. There are various types of pension plans being offered in India today. Before looking at their benefits, let’s see what they are and what value proposition they make for you, the buyer.
Both ULIPs and pension plans will help you save taxes. Under section 80C and 80CCC of the Income Tax Act, 1961, the premiums your pay towards ULIPs and pension plans are exempt from tax respectively - both are subject to an annual limit of 1.5 lacs per annum. On the other hand, while withdrawals under ULIPs are exempt from taxes (subject to Section 10D), pension plans do attract taxes on maturity. You can withdraw a third of your maturity amount without taxes and the rest can be used to buy immediate annuity for further tax planning.
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