Agents like to project traditional insurance plans as instruments that offer triple benefits: life insurance cover, long term savings and tax savings. The reality is quite different. Traditional policies are not the best form of life insurance. A term plan can give a 10 times bigger cover at a fraction of the cost. Nor are they a good investment because the returns are barely 5-6%. But they are certainly the worst way to save tax. They require a multi-year commitment and are not very liquid.
Last year, the insurance regulator tweaked the charges on traditional insurance plans and introduced some customer-friendly rules. Traditional products will now offer an insurance cover of at least 10 times the annual premium. The surrender value will depend on the premium paying term of the policy and the minimum surrender value now stands at 30% of all the premiums paid.
Despite these changes, the plans don't qualify as good investments. The only benefit is that the income is tax-free, but then, so is the income from the PPF and tax free bonds. Another positive feature is that you can easily get a loan against such policies.
1.ICICI Prudential Tax Plan
2.Reliance Tax Saver (ELSS) Fund
3.HDFC TaxSaver
4.DSP BlackRock Tax Saver Fund
5.Religare Tax Plan
6.Franklin India TaxShield
7.Canara Robeco Equity Tax Saver
8.IDFC Tax Advantage (ELSS) Fund
9.Axis Tax Saver Fund
10.BNP Paribas Long Term Equity Fund
You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds
Invest in Tax Saver Mutual Funds Online -
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
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