BloombergQuint's Big Decisions podcast gets you the insights you need to make big money decisions with confidence.
Unit-linked insurance plans gained significance after the introduction of long-term capital gains tax. They were pitched as alternatives to mutual fund investments because of their tax-free returns and the added advantage of mortality cover.
But even before the government stepped in to cap the tax-free returns that can be earned through this investment product, there were arguments being made against them, according to Kirtan Shah, chief financial planner at Sykes & Ray Equities.
A number of charges that aren't immediately visible reduce the attractiveness of the ULIP as an investment product, Shah said. Not just that, the low amount of life cover these products have isn't enough to justify the premium payment, he said.
On this BQ Big Decisions episode, BloombergQuint speaks to Shah about the nature of ULIPs and the implications of the government's latest move.
Listen to the full conversation here:
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