A guide to retirement planning with ulips

1. A Guide To Retirement Planning With ULIPs If you are looking to invest somewhere with retirement as a goal in your mind, then a Unit Linked Insurance Plan 0r ULIP is the right choice for you. Investing in a Unit-Linked Insurance Plan (ULIP) will not only help you reduce your tax liability but will also ensure that your wealth grows over the investment period. What’s more? A ULIP also offers the protection of a life insurance risk cover that helps you secure your family in case of an unforeseen situation. Let’s see how ULIPs work. ULIPs are an investment cum insurance product which offers the dual benefit of a life insurance cover as well as an investment. You have the flexibility to invest the premium into various market instruments like stocks, bonds or funds (equity, debt or hybrid). What’s more? You can easily switch between funds depending on your risk appetite and life stage goals. Now that you have a basic understanding of what ULIPs are, here are five compelling reasons to help you make the right decision: 1.Fixed lock-in period If you are investing in ULIP plansto save for your retirement, you can benefit from the built-in lock-in period. ULIPs have a lock-in period of five years. This helps bring in a financial discipline in your life and also ensure that you are not tempted to opt out of the ULIP and use the money for any other purpose. Every investment you make can be withdrawn only after the completion of the lock-in tenure. 2.High returns It has been noted that ULIPs returns can be higher as compared to any other insurance product and this is primarily due to it being a market-linked product. The amount you pay as a premium can be invested in different asset classes, that can be either equity only, debt only or a hybrid mix of both. You can invest in equity only instruments if you have a high risk and high return outlook. However, it is recommended that you make investments not only based on risk appetite but on life stage goals as well. 3.Dual benefit A term insurance plan offers you tax benefit and a life cover but does not help grow your wealth. Therefore, you should opt for ULIPs. This investment avenue offers a tax advantage, a life cover, and helps you build your wealth. From a tax saving perspective, ULIP investments can be claimed as a deduction under Section 80C of the Income Tax Act, 1961. 4.Flexible

2. In ULIP plans, you have the flexibility to switch between funds. If you feel that a particular fund is not performing well, you can switch from one fund to another with ease and convenience. You can choose the funds based on your long-term goals as well as your risk appetite. You are also free to change the fund allocation at any time. 5.Ideal wealth-creating tool As compared to any other traditional investment product, ULIPs have shown higher returns over a long term and provide tax benefits under Section 10D of the Income Tax Act, 1961. This implies that your returns on maturity are exempt from tax. Many fixed deposit investors are now switching to ULIPs for their flexibility and high return-generating capacity. 6.No LTCG Tax on ULIP Returns Apart from tax exemptions under 80C and 10D, ULIP plans are also exempted from the LTCG tax. The Long Term Capital Gains tax is levied on products like equity investments, mutual funds and ELSS. As per the LTCG rules, the returns earned on these investments are taxed at 10% on profits exceeding Rs. 1 lakh. But the returns you earn on ULIPs in the long run are exempt from this LTCG tax, helping you to accumulate a larger corpus for your retired life. Thus, ULIP is an ideal investment tool for your retirement plans. The trick is to choose the right fund at the right time. So why wait? Start your retirement planning with ULIPs from Finserv Markets today! Tax Benefits for Senior Citizens – Budget 2019 While the Indian middle-class is happy with the recent budget, there were no specific tax benefits mentioned for senior citizens. This is rather unfortunate as many senior citizens in India desperately need certain benefits to live comfortably. However, all is not bleak as there were certain introductions that could indirectly benefit senior citizens. One of them is the full tax rebate offered to individuals earning up to Rs.5 Lakh per annum. This will greatly benefit both senior citizens and super senior citizens who don’t have a fixed income or are living off pension. This was recently announced by Piyush Goyal – the acting finance minister. He pointed out that the deductions on senior citizens’ medical expenses can be used to bring the taxable income below the threshold of Rs. 5 Lakh. According to Mr. Goyal, two income categories of TDS threshold should be raised so that it could potentially benefit senior citizens. He has proposed increasing the TDS threshold on interest derived from post office and bank deposits from Rs. 10,000 to Rs. 40,000. The finance minister also suggested increasing the TDS threshold for income earned from rent from the

3. current Rs.1.8 Lakh to Rs.2.4 Lakh per annum. He has also proposed the exemption of income tax on notional rent on a second self-occupied house. This will be beneficial for people who for a number of reasons are compelled to maintain two different houses, especially for the care of their parents. While this may not benefit all senior citizens, it could certainly reduce the tax burden on many Indian citizens over the age of 60 or their family members. Standard deductions were recently increased from Rs. 40,000 to Rs.50,000. This should also help senior citizens in a number of ways. He also further proposed certain reforms in the pension scheme. There are many ULIP plans (Unit Linked Insurance Plan) in India which could greatly benefit the senior citizens of our country. Let’s take a look at some of the ULIP benefits for senior citizens: There are many ULIPs designed for senior citizens that will take care of their needs after retirement. By applying early, you can avail monetary benefits which will be a huge surplus after you hang up your boots. The financial benefits obtained from such plans can provide for medical emergencies. ULIPs are very flexible and transparent. Now that you’re aware of the various benefits of ULIPs, you can buy a ULIP on Finserv Markets, which you think suits your goals the best.