What is the difference between a mutual fund product and ULIP(Unit Linked Insurance Product)?
Mutual fund products are basically investment products whereas ULIP products are protection oriented products. For the sake of clear understanding, we are giving below a table showing the difference between the two:
Mutual Fund Products
Insurance (ULIP) Products
One time investment and medium term in nature (i.e. just 1-3 years).
Continuous investment and Long term in nature (5 to 10 years)
Substitute for direct investment in shares.
Alternate for a traditional insurance policy.
Primary objective is capital appreciation or return on investment.
Primary objective is life cover.
No entry load on investment.
Load by way of premium allocation charges, fund management charges, surrender charges etc.
80C Tax benefits not available except for Tax Savings Schemes.
80C tax benefits available (except for Single Premium policies)
Better return than from ULIP (No. Risk Cover)
Lower return than similar Mutual fund products but includes risk cover.
     
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