India, March 10 -- A Unit-Linked Insurance Plan (ULIP) is often positioned as a combined solution for insurance and long-term investment. While its market-linked returns attract attention, the tax benefits associated with ULIPs are equally important and frequently misunderstood. A clear understanding of these tax aspects is essential before including ULIPs in a financial plan.

This guide explains how a Unit-Linked Insurance Plan is taxed, what benefits are available at different stages, and how tools like a ULIP calculator and the power of compounding calculator help in realistic planning.

A Unit-Linked Insurance Plan is a life insurance product that combines risk cover with investment. The premium paid is split into two parts:

Returns...