If you are planning long enough to fulfill the dual purpose of providing life coverage to your family as well as achieve your financial goals, then ULIP plans are the most beneficial plans that can help you to achieve both the purpose of market-linked growth of your investment and life protection. Unit-linked insurance plans are a market-linked product that combines the very best of investment and insurance. It is a policy which is linked to the capital market and offers flexibility to invest as per the risk appetite. These duel benefit backed by flexibilities of ULIPs make them an attractive investment option.
ULIP is a financial instrument that provides the investors with the best of both the investment and insurance the world. ULIP Plans are provided by the company that offers customers to avail the benefits of insurance along with the benefit to create wealth in order to achieve their financial goals.
The best ULIP plans offer customers a choice to finance on various investment tools like stocks, bonds, and mutual funds as well as insurance coverage. ULIPs a truly act as a popular financial instrument among customers by providing the dual benefit of protection combined with the freedom to choose your investment options.
ULIP Plans by as:
ULIP for Retirement
In this plan, the premium paid during the tenure of the policy is collected by the insurer and paid to the policyholder after retirement, in the form of annuities.
ULIP for Wealth Collection
This plan collects your wealth over a period of time and provides flexibility to achieve the future financial goal. Moreover, it also protects your finances from unwanted violation of market. This plan is recommended for people who are in the early thirties and late twenties.
ULIP for Children Education
As children are an important asset of any family, every parent priority is to ensure their child’s future. There are numerous ULIP plans that provide money back after a couple of years of premium payment, this helps to build your child future and support your child in important events of life.
ULIP for Health Benefits
In additions to some basic benefits, Unit Linked Insurance Plan efficiently provides financial support to fulfill medical contingency.
As a Unit Linked Plan, this policy has additional benefits too
- By investment in equity, depth and other forms of investment ULIP plan offer potential for good returns. Depending on one’s risk-taking capability and investment appetite you can invest well in this plan and get good returns at the end of the policy tenure.
- ULIP is one of the most transparent financial products available in the market. Their charge structure, the value of the investment, internal rate of return, etc. are shared beforehand with the prospective customer. NAV’s on a daily basis is shared on Life Insurance Company’s website.
- Another most important advantage offered by ULIP plan is that they offer good liquidity. ULIP plan offers partial withdrawals of money in case of emergency or sudden requirements of funds. Leaving only minimum amount in unit-linked account most plan allows insured to withdraw fund after 5 years to a great extent.
- Another major advantage offered by this plan is that it offers flexibility to control one’s investment. The plan also protects your investments during volatile times and helps you to reach your financial goals. Depending on the investment objectives life stage, goals and risk-taking ability you can choose from available funds under ULIP plan. If in case the insured finds that the funds are not meeting the requirements, then they can switch the funds to another available fund which meets your requirements.
- UNIT linked plans as a single product offers multiple benefits. It not only secures the life insured and their loved ones from uncertainties of life and provides them life coverage. It also offers various investment opportunities in addition to the tax benefit.
- ULIP Plans are great to inculcate the habit to save regularly. It has been observed that the average unit costs are likely to be less as compared to the one-time investment plans. Moreover, the plan also helps you to save bundles on taxes by tax benefit under section 80C of income tax act.
- This plan is a great investment option for those investors who don’t have ample amount of time to continuously monitor their investment. One can take advantage of market-linked growth with participating actively in the stock market. According to your own choices if you feel the need for greater return, then you can easily switch to high growth fund having a higher investment in equity.
- As an effective tax saving instrument, the insured can avail several tax benefits under income tax act. The life insurance plans come under tax deduction under section 80 C, section 80D allows tax benefit for critical illness rider as well as life insurance plans. Maturity proceeds withdrawals are an exempt tax under section 10D.
- The life insured has an option to enhance the coverage provided by the ULIP Plan by choosing the riders. Riders provide supplementary, add-on benefit to the insured on top of the basic coverage provided by the plan.
- The ULIP plan has transparent structure features and offers comparatively fewer expenses as compared to the other insurance policies.
- The plan offers flexibility to switch between funds.
- The Unit linked insurance plan offers both death and maturity benefit to the insured and in addition it also offers add-on coverage as death benefit riders.
- ULIP Plans offers different premium paying frequency.
- A wide fund option is available that suits both risk taker and averted.
Wrapping it Up!
Being an investment cum insurance policy, ULIPs are considered as one of the most productive options of investment. However, before zeroing in on a particular plan, it is important for investors to have a proper knowledge of the market and evaluate the various different aspects of investment.