For most people, “Tax” implies money going out of income. Tax is a part of wealth creation and is just as essential. However, tax can also add to your wealth if you invest in tax saving investment options.

Author:IndiaFirst Life | Date:07 Oct 2022 | Time:08:56:00

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For most people, “Tax” implies money going out of income. Tax is a part of wealth creation and is just as essential. However, tax can also add to your wealth if you invest in tax saving investment options. This not only helps you save tax, but also earns you high returns, and gives you the added benefit of long-term financial security for your family. 

Unit Linked Insurance Plan (ULIP) is the most preferred tax saving investment plan as it gives you the double benefit of life insurance and investment. ULIP is similar to a mutual fund wherein part of your payment is invested in financial instruments to provide long-term returns. The difference is that the other part of the ULIP investment goes towards providing you with life insurance cover, i.e., the amount you are insured for. A mutual fund does not have an insurance component. In the unfortunate event of your untimely death during the policy term, the insurance amount, known as “sum assured”, is paid to your family.  

A Savings Plan cum Investment Plan, here is what makes ULIP the best tax saving investment plan to add to your financial portfolio. 

  • Maximise your returns: Unlike standard term insurance, ULIP invests your premiums into market-linked instruments such as equity and debt securities. This keeps your portfolio diversified and hedge risks as if one asset class does not perform well, profits earned on the other can balance it. It offers a wide variety of investment strategies that can help you adjust your portfolio as per your priorities, risk appetite or fund performance. The longer you stay invested, the more the chance of your fund value and maturity corpus increasing.  

  • Flexibility to switch between funds: Your life’s priorities and goals evolve with age. When you are young, you can afford to take risks or you may have surplus funds to invest. As you age, responsibilities increase, and you may need to accumulate funds for a medical emergency or an imminent milestone event such as your children’s higher education or marriage. ULIP lets you switch between funds easily to accommodate changing requirements. This makes it more than just tax saving investments. 

  • Tax benefits: Investment in ULIPs is eligible for deduction from taxable income under Section 80C of the Income Tax Act, 1961 up to ₹ 1.5 lakh per annum. The returns earned from ULIPs policies are tax-free subject to conditions of Section 10(10D) of the Income Tax Act (1961) 

  • Financial security for your family’s future: Keeping your family financially protected tops your list of priorities. ULIPs are long term investment plans that perform the dual task of keeping your family secure, while growing your wealth. They offer a minimum life insurance cover that is 1.25X your annual/Single premium. However, depending on your policy, some companies even take that up to 40X or higher. This amount is paid to your family in the unfortunate event of your death during the policy term. 

As you can see, ULIPs are more than just income tax saving options. They can take care of multiple financial needs – from immediate tax saving to funding future aspirations and goals. They can be wealth generators and grow your capital immensely, provided you stay invested for a longer period.   They offer a variety of investment strategies, funds and options to switch between funds and fulfill your needs as your priorities evolve. Most importantly, ULIP grows your money while safeguarding your family’s future.


Income Tax benefits will be made available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. IndiaFirst Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in documents/mail. To know the tax benefits available to you, please consult your own tax consultant.



IndiaFirst Life

Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 663 crore, is one of the country's youngest life insurance companies. Our key differentiators are our simple, easy-to-understand products that are fairly-priced and efficiently serviced.We offer a diversified suite of over 46 need-based products & Riders (as of 31st March 2022) catering to varied customer segments, leveraging multiple distribution capabilities and augmenting various investment options. In all, propositions under the categories of Protection, Assured Savings, Wealth, Pension, Health and Group Funds for Employee Liabilities form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and competitively priced with risk management being our core strength.

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