Loss from ULIP, Can it be offset from taxable income?

Dear Shyam,

The gains on your ULIP Policy are tax-free and hence you cannot treat the loss on the same as capital loss and off-set against any other income.(a similarity could be drawn between this and LTCG on equities).You have to ignore the capital loss.

Thats bad news. But Thanks for the information Balaji.

Shyam

Dear Shyam,

Appreciate your disappointment.But do remember for the future-never invest in an ULIP(unless there are drastic changes in the way they are operated).If it's any consolation,try to treat any loss incurred as the cost of knowledge/education.Contrary to what your agents must have told you,real long-term wealth is not created by such products.

ULIP IS A LONG TERM PRODUCT.MAXIMUM CHARGES ARE DEDUCTED IN FIRST THREE YEARS.AFTER THAT ONLY LITTLE CHERGE IS DEDUCTED.SO EVEN IF FUND VALUE IS LOW,YOU CAN CARRY ON ULIP.AND IF YOU WANT HIGH RETURNS,YOU SHOULD PAY PREMIUM WHEN MARKET IS DOWN AND ALSO THE PAYMENT SHOULD NOT BE YEARLY BASIS.IT MUST BE MONTHLY OR QUARTERLY SO THAT ONE CAN GET THE BENEFIT OF COST AVERAGING.E.G MAX INDIA LIFE INSURANCE DEDUCT 37 % IN FIRST YEAR,22 % IN 2ND YEAR,17% IN 3RD YEAR AND 7 % FROM 4TH YEAR ONWARDS.SO DONT GET DISHEARTEN AND CARRY ON ULIP AND INVEST ACCORDING TO MARKET.