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Should I go for a combination of ULIP and ELSS?

Dhirendra Kumar discusses whether a combination of ULIP and ELSS is a good investment option

Should I invest in a mix of ULIP and ELSS?
- Rahul

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We keep insisting that one should only go for term insurance, but never for ULIPs. Although ULIPs get you the 80C advantage, they will not give you the best of insurance or investment. Ideally, one should never mix up insurance and investment. Insurance, an important requirement, needs proper planning, which should be in line with one's requirements. For example, if you are single and have no financial dependents, then you don't need any insurance.

However, if you are married or you have a financial dependent, then your need for insurance increases, as you will not have any financial net worth at a young age. As you move along the life phases, the need for insurance multiplies.

The only way to achieve that need is to pay the premium for a term insurance, which can get you a large coverage. As you start building your financial net worth, your insurance requirement will come down gradually. All these needs can't be fulfilled by a ULIP. So, whatever 80C window you are left with, let ELSS take care of that. Just make sure that you are disciplined with your ELSS investments.