Life insurance combined with investment

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Posted: Sun May 10, 2009 9:56 am Post subject:

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but you take insurance with investment, the most advantage is this that its tax free, whatever the cash value becomes,you can take out without paying tax on it. what other people say that we should mix up inv with insur

It is not tax free. If one surrenders their policy and takes the cash surrender value, they will pay income tax on the gain. Any growth is tax deferred.

It might help to realize that a life insurance policy doesn't have a "cash value" even if the insurance company uses that term. It actually has a "cash surrender value". It may just sound like semantics, but it is an important disctinction. The "cash surrender value" is the amount of money that the insurance company will give you if you surrender the policy. It also determines the amount of money that the insurance company will be willing to give to you as a loan.

Loans aren't taxable, but a loan on a universal life policy, greatly increases the odds of the policy lapsing. If a policy lapses and more money has been taken out of the policy than has been paid, taxes will need to be paid on the gains, yet there may be no money available to pay the taxes.

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Posted: Wed May 13, 2009 10:29 am Post subject:

unit link insurance plan is life insurance solution that provides you benifit to investments in equity. Investment is denoted in units and represented in value that it has attained called net asset value. policy value varies according to the value of underlying asset. returns depend on performance of funds selected by policy holder in capital market. you option of selecting schemes, balanced fund, equity fund, debt fund. investment risk is generally borned by investor. you have option of investing in lumpsum (single premium) or premium payments. ULIP investors can shift their investment in different schemes according to their requirement or market condition at nominal cost or no cost depending from insurance company to company. You can as well add different rider to ULIP plan of your choice were premium increases accordingly. Kindly look for different expenses. for example - mortaliti surrender, premium allocation, fund management, fund switch and admin charges with service tax.