Balance Advantage Fund: Protection against volatilityNovember 23, 2018
||POINT OF COMPARISON
||Type of product
||Insurance + Investment.
||Only Investment (no life coverage).
||Premiums paid towards the plan up to Rs.1.5 lakh are tax-free under the Section 80(C). The sum assured paid to the nominee would also be tax-free under the section 10(10D).
||Only ELSS based investments are tax-free up to Rs.1.5 lakh are tax-free under the Section 80(C).
||Part insurance – life cover and part invested in equity, hybrid, debts, bonds, equity, etc.
||Life cover is provided.
||No Life Cover
||Option to get comprehensive and complete protection by adding riders
||Chances of moderate to high returns Net Asset Value (NAV) depends on the type of investment funds and on the performance of market.
||Chances of high returns. Equity oriented investment gives high returns. Depends on the allocation of funds and market performance.
||Need to wait until completion of the lock-in period i.e. 5 years before exit.
||More liquid, except with ELSS which have a lock-in period of 3 years.
||When to consider buying
||When you want to provide financial security, and at the same time ready to accept investment risk.
||When you have disposal money and wish to gain high returns of sum.
||Depends on the investor but for good returns on investment – 10 to 15 years.
||No specified tenure
||Can be short, medium or long term.
||Ideal Time to buy
||Can be bought anytime depending on the requirement and amount one wishes to save.
||When one has less financial burden and have disposal money.
||Flexibility in switching fund allocations.
||No switching option
||Most of the mutual funds typically do not have any lock-in period, except ELSS which have a lock-in period of 3 years. You can buy and sell mutual funds anytime, closed funds.
||Fund Management Charges
||Higher in the initial years up to 5 years, and later on 1.35%
||Charges are 2.5%
||Long Term Capital Gain tax
||LTCG are tax free in ULIPS after 5 years ( even investment in debt funds or liquid funds also).
||LTCG varies from 10% to 20% depending upon scheme.