Unit Linked Insurance plan (ULIP) is a kind of policy that provides dual benefits. In the first half, it acts as a life cover, while the other half is a potential investment to satisfy your long-term goals. With a host of investment options, it offers paramount flexibility to make investments as per your risk tolerance. They also help you to switch between funds at your convenience and obtain guaranteed returns for a better tomorrow.
Today, ULIPs are an ideal investment for all those who want to save sufficient money and adopt smart investment plans. Whether you wish to save money for your child’s educational future or marriage, ULIPs can help make this possible on time. Let us know more about why you should consider this type of insurance as an investment option in need.
1. Dual Benefit
The best part about opting for a Unit Linked Insurance plan is that it allows you the opportunity to receive dual benefits. One of an investment plan and the other of a life cover. So, the premiums are also segregated into two different segments for your convenience. One that is invested in the former and the other in the latter. This dual benefit allows you to cater to all of your life’s goals at the same time without compromising on either.
2. Tax Benefits
ULIPs are also eligible for tax benefits. This means that one can claim a deduction worth Rs. 1.5 Lakhs per annum under Section 80D. This is only applicable to the premiums paid. The amount that you receive under this plan also comes to you tax-free. However, they fall under Section 10 (10D).
3. Switching Funds
The flexibility of switching between one fund option to another is very purposeful. You can do this by considering the market conditions and your requirements. As such, you can also consider your time horizon and risk appetite when switching between the right funding options as per your needs. Equity funds can be an incredible investment if you are open to market risks. This is because with high risks come high returns too.
But if your risk tolerance is low, you can always choose debt funds. You can make these switches as many times as you want within one specific financial year. For more details, you can connect with your insurance provider.
4. Premium Redirection
What if you want to start paying premiums for a different type of fund? Yes, you can always choose such better investments using ULIPs. This means that all the premiums you had paid earlier will remain invested there while the new ones will be redirected to a different fund. This way, your investment options expand, and the likelihood of returns increases.
5. Choosing A Top-up
Your goals and requirements cannot be stagnant for all your life. They will naturally fluctuate as per your lifestyle and wants. This means the need to top up the plan will arrive at some point or another. Such a thing indicates a better top-up option that you can leverage to invest enough money in your current policy as long as the tenure is on.
6. Partial Withdrawal
Financial urgencies can crop up at any given time. This means you may find yourself in a situation where you need to gather some amount of money urgently. During this time, if you do not already have sufficient savings at hand, you can break into your ULIPs savings and make a partial withdrawal. However, you can do this only after you have served the lock-in period of 3 to 5 years respectively. This helps you to stay disciplined with your financial savings and investments at every step of the way and yet cater to your financial urgencies properly in need.
The Bottom Line
If you are looking to invest in ULIPs, the time is now. Tax exemptions, flexibility, convenience, dual benefits, and high sum assured are some of the main reasons why you should opt for it right away. So, speak to your financial advisor to know more about this insurance plan and find out how it can be leveraged by you and your family in the long run. Do not forget to consider essential factors like the charges involved, claim settlement ratio, and fund performance when purchasing this plan.