Difference between ELSS Mutual Fund and Life insurance tax saving under section 80c.

  

1. In ELSS mutual fund the lock In period is 3 years but in life insurance the lock in period is 5 years .
2. ELSS is for wealth building but life insurance cover life and wealth both 
3. ELSS invest in equity thus giving Higher returns and have higher risks Life insurance(Traditional ) have Low Risk and in ULIP switching allows between equity and debt.
4. ELSS gains are taxed at 12.5% i,e Long Term Capital Gain (LTCG) ULIP maturity are Tax Free under section 10 (10D) if premium is less than 2.5 Lakh Annualy.
5. ELSS has lower management charges i,e approx 2.5% AUM ,in ULIP the management charges are higher

Which you should choose between ELSS and mutual fund and life insurance .

Choose ELSS if your goal is pure wealth creation with the shortest possible lock-in and you can handle market volatility.

Choose Life Insurance if you need financial protection for your family or prefer tax-free maturity proceeds. Experts often recommend buying a Term Plan for high life cover and using ELSS for investments.