What are the striking features of ULIPs as compared to ELSS Mutual fund schemes?
The horizon of investment is not the same. ELSS is medium term whereas ULIP is more long term.
The tax advantages are higher in ULIPs (entry + maturity) as compared to ELSS.
Lock-in period for ELSS is three years. During this period you cannot reduce your risk.
Lock-in period for ULIPs is three years but, through switching facility, you have the flexibility to change your investment pattern.
Maturity benefit after three years in ELSS is taxable as Capital gains at 10 per cent or 20 per cent.
In ULIPs, maturity benefits are tax-free as per the current tax laws and partial withdrawal also is tax-free.
ULIPs offer protection-cum-market-related returns. Under the same product, you have a wide range of investment options.
With Ref: http://www.thehindubusinessline.com/iw/2007/11/25/stories/2007112550981300.htm
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