MFs Vs ULIPs

[Abhisar]

- Anyone thinking to invest in ULIP Plan than you must give ULIP at least 10-15 yrs because of high charges initially.
- Mutual Funds are very suitable for Short term investors. In it you have the flexibility of withdrawing money anytme.

[Absar]

MF is better than ULIP
- MF no front end charges now
- But you have to pay commission for ULIP
- Then no life insurance coverage for MF But ULIP have many coverages like critical illness, PA etc.

[Abbas]

Primary Objective
MFs : Investments
ULIPs: Protection + Investments
Investment Duration
MFs : Works out for Medium term, Long Term Investors. Risky for Short Term investors.
ULIPs : Works out for Long Term Investors only.

[Nilesh]

ADVANTAGES ULIPS
•Can easily rebalance your risk between equity and debt without any tax implications.
•Best suited for medium risk taking individuals who wish to invest in equity and debt funds (at least 40% or higher exposure to debt). No additional tax burden for those investing mainly in debt unlike in MFs.

ADVANTAGE MFS
•Better returns than ULIPs.
•Lower charges than ULIPs.
•Very flexible and enables you to switch your investments from non performing MF's to better performing MFs
•Very Liquid can be redeemed at anytime.
•Best suited for medium to high risk taking individuals who wish to invest a significant portion in equity funds (at least 65% exposure in equities).

[Mukulz]

Liquidity
MFs: Very liquid. You can sell your MF units any time. Three years lockin in ELSS. Some MF's like those from Reliance have introduced redemptions at ATMs.
ULIPs: Limited liquidity. Need to stay invested for the minimum number of years specified before you can redeem.

[LastWarrior]

ULIPs may be good in the long run, but understanding them is very very complex. In the absence of the agent (after the deal). In practical, its very painful to futher follow up of fund switching, premium reminder, change of address or job. A pure term plan plus diversified MFs will do all work.

[koolz]

MF Vs ULIPs
Investment should not be mixed with insurance.
Mutual fund is for 1-5 yrs investment, ULIP is investment plus insurance.
It is advisable to take Mutual fund plus term insurance(low cost) instead of ULIP(High cost).

[Naresh]

Key features of ULIPs:

1. Combination of investment + insurance.
2. Long-term, systematic and goal-based investment.
3. Automatic asset allocation/Diversification in several asset classes.
4. Flexibility and transparency.
5. Switching funds at no extra cost.
6. Tax benefits under Section 80c of the Income Tax Act.

[nishant]

Mutual fund + term policies is definitely good combo. But suppose after five years if the client faces some problem in premium payment due to some financial trouble then ULIPs do not lapse but term plan does lapse, if the financial problem persists longer. And during this time if the client also gets health problem then he may not be able to reinstate the lapsed policy due to health reason (this may not be the case with ULIPs).

[sreesub]

I just cant see any reason to recommend ULIPs considering its horrible both as investment and protection. you barely get 5x(or at best 10x) as sum assured plus fees are so exorbitant that you lose money as investment. Unfortunately both myself and my wife had bought ULIP products without analyzing them and both have lost money despite being open for several years. I have thankfully made the call to close all of them and live with the loss instead of losing any more money.