If you’re saving for the long term, you’ve probably heard this debate a dozen times: Why not just do a SIP in a mutual fund instead of locking money in a ULIP?
The answer isn’t one-size-fits-all. Mutual funds and ULIPs like HDFC Life Sampoorn Nivesh Plus are built differently. Here’s how to decide when a ULIP actually makes sense.
The Case for Mutual Funds (straight equity SIP)
- Liquidity: No 5-year lock-in; you can redeem anytime.
- Choice: Hundreds of schemes, from large-cap to sectoral to thematic (AI, EV, infra, pharma).
- Charges: Expense ratios are lower (1%–1.5% for direct plans).
- Transparency: NAVs and portfolios disclosed daily; independent SEBI oversight.
For pure wealth-building with no insurance need, mutual funds are the simpler, flexible route.
The Case for ULIPs like Sampoorn Nivesh Plus
- Life cover bundled in: Even the basic Classic (Life) option gives you insurance along with investments.
- Switching flexibility: You can move money between 10 funds anytime without tax.
- Tax treatment: As long as annual premiums stay under ₹2.5 lakh (post-2021 rule), maturity is tax-free under Section 10(10D).
- Discipline: 5-year lock-in stops premature exits.
- Charges capped: Fund Management Charge max 1.35% p.a.; other charges taper off after initial years.
Where ULIPs Score vs SIPs
1. For high-income earners within ₹2.5 lakh annual premium limit
ULIPs offer equity-like growth plus tax-free maturity.
By contrast, in mutual funds, long-term equity gains are taxed at 10% beyond ₹1 lakh.
2. For those who want investment + insurance in one plan
ULIPs combine both goals, so you don’t need to manage two separate instruments.
3. For investors who value switches without tax hassles
Inside a ULIP, you can shift — for example, from an Opportunities Fund (mid-cap) to a BlueChip Fund before retirement — and it doesn’t trigger capital gains tax.
Where Mutual Funds Still Win
- If you want maximum flexibility (no lock-in, no insurance add-on).
- If you’re investing more than ₹2.5 lakh premium annually in ULIPs—then maturity proceeds lose tax-free status.
- If you want niche exposures (international funds, sectoral themes like AI/green energy directly).
- If you’re disciplined, want tax-free maturity, and like the idea of managing switches inside one policy, Sampoorn Nivesh Plus works.
- If you want absolute freedom and already have separate life cover, mutual funds via SIPs make more sense.
In the end, ULIPs like Sampoorn Nivesh Plus or SIPs—they simply serve different purposes. The right choice depends on whether you value tax efficiency, built-in insurance, and fund-switch flexibility, or you prefer the pure-play transparency of a mutual fund SIP.
Both paths can grow wealth, but the right choice depends on whether you value tax treatment + bundled cover (ULIP) or flexibility + wider fund universe (MFs).
Take Your Next Step with Confidence
Whether you want to guide others as an insurance advisor or simply stay updated on ULIP strategies like Sampoorn Nivesh Plus, here are two paths to explore.
