Insure your savings

Q&A

Ulips, being insurance products, take away a major part of your contribution towards agents' commissions, insurers' expenses, fund management fees etc, leaving a small part for actual investment, on which, the insurer generates returns for its investors. Therefore, the investible amount goes down substantially in the initial years.

There are much better instruments such as PPF, ELSS, among others, where the returns are much higher.

For life cover, there are alternatives products such as term policies that are much cheaper.

For cover for medical expenses, there are mediclaim insurance policies for which there is a separate tax deduction up to Rs 15,000 under section 80D on the premium paid.  Investor: In your view, should I use Ulips for my 80C deduction?  Advisor: No.  The writer is a chartered accountant