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ULIP for Health Benefits

ULIPs can help you build a corpus for future medical expenses and protect yourself and your family from the financial burden of medical costs. They offer tax benefits, flexibility, and life coverage.

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ULIP for Health Benefits

ULIP for Health Benefits
July 03, 2023

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In this policy, the investment risks in the investment portfolio is borne by the policyholder

Many Indians struggle to deal with the financial burden of medical expenses. Health insurance plans may not cover all the costs of treating critical illnesses or injuries. Building a corpus for future health expenses can help you deal with medical costs. Unit-Linked Insurance Plans (ULIPs) let you invest for the future while providing life insurance coverage in the present. Let’s see how ULIPs offer health benefits.

ULIP for Health Benefits

ULIPs are investment instruments that offer life insurance coverage and investment opportunities. You can use ULIPs for health benefits by investing and building a corpus to pay for future medical expenses. With a ULIP for health benefits, you can protect yourself and your family from the financial burden of medical costs.

Types of ULIP Plans Offered for Health Benefits

Insurance companies do not offer specific health ULIPs. However, you can select a ULIP based on your investment horizon, current financial status and expected future costs.

How Do ULIPs Provide Health Benefits?

ULIPs can provide health benefits in several ways. Here are some of the ways ULIPs can benefit you.

  • Corpus for Future Costs

    Many regular health insurance policies do not cover critical illnesses or their treatments. ULIPs help you build a corpus that you can use to pay for the treatment of uncovered heart ailments or cancer.

  • Tax Benefits

    The premiums paid towards ULIP policy are eligible for tax benefits under Section 80C# of the Income Tax Act, 1961.Proceeds received on surrender/partial withdrawal/maturity of ULIP plan are exempt from tax subject to provisions mentioned in Section 10(10D)# i.e if the premium payable for any of the years during the policy term does not exceeds 10% of the death sum assured.

    In addition to the above, for policies issued after 1st Feb 2021 tax exemption on maturity proceeds will be available if premium paid in any of the years towards such matured polices does not exceed Rs.2,50,000. Out of the total matured policies in a financial year, exemption u/s 10(10D) will be available only towards those polices who’s aggregate premium in any years does not exceed Rs. 2,50,000/.

    Income from rest of the policies exceeding the mentioned limit will be chargeable as capital gains.

    Death proceeds are also exempt from tax for all ULIP plans.

  • Financial Flexibility

    ULIPs allow premium payment flexibility, enabling you to choose a payment schedule that works for your current finances. Additionally, you can select a sum assured based on your family’s financial needs and choose investment funds that suit your risk appetite.

What Are the Benefits of ULIP for Health?

Here are some of the benefits of ULIP for health:

  • Life Coverage

    ULIPs provide life coverage, providing your family with financial stability if anything happens to you. They can use the corpus to pay for hospitalisation and medical bills.

  • Investment Opportunities

    ULIPs help you invest and grow your money while offering life insurance coverage. The corpus can help you deal with future medical costs.

  • Flexibility

    ULIPs enable partial withdrawals in emergencies. They also allow policyholders to make fund switches and maximise returns based on market conditions. You can choose a sum assured and investment timeline based on your family’s financial requirements.

  • Tax Savings

    ULIPs offer tax benefits under Section 80C and Section 10(10D) of the Income Tax Act of 1961, subject to prevailing laws.

How to Choose the Right ULIP for Health Benefits

Choosing the right ULIP for health benefits can be a daunting task. Here are a few factors to consider while making your decision:

  • Premium

    Assess your budget to determine how much you can afford to pay as a premium. Remember, the amount will impact your returns.

  • Health Goals

    You should select a ULIP that helps you build a corpus for your health goals. You want a policy that enables you to deal with the cost of a medical emergency.

  • Fund Options

    Understand your risk appetite and choose your ULIP fund allocation accordingly. You should assess a policy’s past performance before deciding.

  • Charges

    Evaluate the various charges that insurance companies levy on their ULIPs. Identify plans with low fees that align with your goals.

  • Policy Term

    The policy term is the duration of the ULIP plan. When choosing a ULIP for health benefits, select a policy term that aligns with your health goals.

    ULIPs for health benefits are a great way to prepare for medical emergencies and ensure that you have sufficient funds to cover your healthcare expenses. Evaluate your options and choose a policy that aligns with your health goals.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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Here's all you should know about ULIP insurance.

We help you to make informed insurance decisions for a lifetime.

What is ULIP Plan? Full Form, Meaning, Benefits and Features

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ULIPs, or Unit Linked Insurance Plans, are insurance cum investment plans that allow you to put money into stocks, bonds, or mutual funds. Read here to know more!

Understanding Advantages & Disadvantages of ULIPs

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ULIPs provide various tax-saving advantages under Section 80C and Section 10(10D) of the Income Tax Act. Check out this article to understand the updated tax rules for ULIPs.

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Disclaimers

#The afore stated views are based on the current Income-tax law and are subject to conditions specified u/s 80C and u/s 10(10D) of the Income Tax Act, 1961.

# Tax Laws are subject to change from time to time. The customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.

The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year.

Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.