New regulations introduced to tax ULIPs

The central government has notified new rules to tax the Unit Link Insurance Plan (ULIPs). People who were planning to opt for ULIPs in order to get tax-free proceeds will have to reconsider and check whether or not they are eligible for such exemptions under the new rules.

ULIPs are a mixture of insurance and investment tool. The insurance company would divide your money, it would use some part of the premium money to invest in equity/shares, and the rest of the funds are utilized to cover your insurance. As the money is put into diverse portfolios and provides a balance in risk and secure investment, many people opt for this option. A Major plus point for investing ULIPs is that it helps the investor claim tax deduction under 80C.