We have always some doubts in investment of
ULIPs Policies and Mutual Fund Schemes regarding their importance and return. Both
categories have their advantages and disadvantages. We are giving some major differences
between both the investment avenues and requesting to all of you at the time of
Investment your hard earn money, please take care of objective of both the
Schemes.
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MUTUAL FUNDS
Ø
Returns are higher
Ø
Fund management is active
Ø
Lower distribution fees
Ø
Tax liabilities in some schemes
Ø
Offers a range of products in debt and equity
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LIFE INSURANCE
Ø
Lower returns, but risk, too, is low
Ø
Ideal for long-term investors
Ø
Offers switching between asset classes without any load
Ø
No tax liability
Ø
Security is a big trigger of investing
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SIMILARITY (ULIP
& M.Fs.)
Ø A large number of individuals pool
their moneys in a single Fund.
Ø The Funds are invested through the
expertise of professional managers in shares and securities.
Ø The investments made are divided
into segments called ‘units’.
Ø One can buy or sell any number of
units on the prevailing NAV Price
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DIFFERENCE (ULIP & M.Fs.)
Ø Mutual fund dividends are tax
free. Growth schemes of mutual fund do
not give dividends.
Ø Encashment of mutual fund units
are subject to short term/long term gains as the case may be. Encashment of
units under ULIPs is not taxable.
Switching is tax free.
Ø Mutual fund have liquidity, ULIPs
are en-cashable after 3 years.
Ø Mutual funds do not provide any
life cover. ULIP taxes it at a very nominal cost.
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