ULIP and mutual funds

Mutual Fund is the better investment instruement than Ulips. In ULIP the large part of your investment goes into the various charges like Fund management, administrative & mortality charges which gives you less units & ultimately the lesser returns. In Mutual Fund if you invest online there will be no charges. Prefer term insurance plan along with Mutual Fund investment which will fullfill both the needs.

Mutual funds are regulated by sebi and there are restrictions on charges. Mutual funds are pure investments while ULIPs also offer insurance. MFs offer more flexibility when investing is considered and on the other hand ULIPs charge heavily in the initial years. So ULIPs qualify as a good option in terms of return only if you are going for long term. While only tax saving MFs qualify for sec 80 C all ULIPs offer tax benefits.  I think if investing is your sole purpose then mutual funds are better otherwise it is better to go for ULIPs.

Mutual Funds have higher rate of return than ULIPS in a span of 4-5 years. The reason MF is compared to ULIP,i.e.,ULIP is an instrument that comes under sec 80C and its an investment option blended with insurance cover.

At th outset, it can be concluded that ULIPS are better than MFS. But, i would like to coin some important differences that will let you know why MFS are better than ULIPS.

1. ULIPS carry high charges in the initial years of investment that eats away a substantial portion of your investment. Compared to it MFS have low entry charges.

2.Insurance companies sell ULIPS emphasizing upon its unique nature of insurance cover blended with a good return on investment. But one can start with a good MF and simultaneously opt for a term plan that can give o greater insurance cover than ULIPS.

3. MFS are governed by SEBI, which ensures proper disclosure of all the related information for the investors compared to ULIPS which governed by IRDA.

I agree with all of you..

If one is making an investment, Mutual Fund is always better than Insurance.. As everyone have stated the important aspect of Allocation caharges.

Also i believe that there are mutual fund schemes for all the customers i.e. Debt for the one who do not want to take much risk, equty schemes, balanced, liquid, so many options are there for investor in Mutual Fund...

Mutual funds give good results becuse it not given more commission to bussines agents but Unit link insurens polices they will give 35% on our money to agents then our investment was only 65%. in mutual funds our investment is 97.25% will go to our investment

Mr.Sumeet i agree with you,definitely mutual funds are a better option to invest than ULIP because in mutual funds the money is being invested in various industries or companies so you are at lesser risk of losing money as the loss in one company can be compensated by the gain in another one.

But if we consider the rate of return than ULIP is giving higher rate of returns than mutual funds.

what would you say on that?

Ya, actually, as the allocation of your money is higher in mutual funds rather than the ULIP plans. Also, there are other charges apart from life insurance premium, which are being levied by the insurance companies. So still if u opt for life insurance policies, be sure about the money which will be allocated further in the equity and debt markets

Yes,the regulator ,IRDA now needs to get the insurers to be transparent in their expense ratio,& not only from showing to the prospect the upfront charges.

Have a benchmark limit for all variable/charges then can we compare between the two.  

At any point of time mutual fund is the better option. ULIP kills the investors return. Instead one can plan his investment according to his requirements, so that he benifits out of it. If one wants insurance den he/she should be goin for a term insurance so that he is covered for a higher amount. and if he/she wants a lumpum amt at the maturity one should carry out a SIP of the required amount. He will get more then what he is expecting. but it should be in a large cap scheme so that der is less volatality in the fund.

Benefit of MF over ULIP

ULIP (Unit link Insurance Plan) in my sense its a combination of Insurance and Wealth creation product its not a Perfect Investment Instrument due to its long Term in nature and High Mortality Charge and Hidden cost lack of Liquidity and its also MARKET LINKED Product ,For wealth creation MF is Good.

Reasons why MF Few is Given Below,

1. Liquidity
2. Detail Analysis of Portfolio
3. Transparency
4. Minimum Expenses
5. No hidden Cost
6. Broader Choice of MF scheme
7. MF have both Short to Long Term Plan

 Still Many thing to Say About MF ,so in My Sense MF is Best ,but I dont reject need of ULIP or Insurance Product its depend upon person need.In my sense a person should consider Term Plan for Risk Coverage and MF for wealth Creation

Mutual funds have more leverage in them its convenient for people who have fixed target for investment and also do not want to get involved in decision of deciding the portfolio.