Unit-Linked Insurance Plans (ULIPs) are hybrid financial products combining the benefits of both insurance and investment under a single integrated plan. They offer policyholders the dual advantage of life cover and market-linked returns, making them a popular choice for individuals looking to achieve long-term financial goals. If you are wondering, “Why should I invest in ULIPs?” or “Are ULIPs complicated?”, read on to get a better understanding of why these plans may be suitable for you.
What is a ULIP?
A Unit-Linked Insurance Plan or ULIP, is a life insurance product that provides risk coverage for the policyholder along with the opportunity to put their money into various qualified market-linked options.
If you are looking to create investments but do not want to forgo the security offered by life insurance, ULIPs may be a suitable option for you.
Common Benefits of ULIPs
Wondering why to invest in ULIPs? Here are a few benefits that may answer this question.
Life Cover:
Provides financial protection to your family in case of your untimely demise.
Market-linked Options:
Offers a range of fund options to invest in, including equity, debt, and balanced funds, catering to different risk appetites.
Flexibility:
Allows switching between funds based on market performance and changing financial goals.
Tax Benefits:
Lets your premiums paid as well as benefits received, be eligible for tax exemptions as per the prevalent tax regulations.
Wealth Creation:
Helps in building a corpus for future financial goals such as children’s education, marriage, or retirement.
Investing in ULIPs
These products offer the combined benefits of insurance and investment, providing both protection and wealth creation. ULIPs are ideal for individuals seeking a disciplined and systematic approach to saving and growing their money.
One of the primary steps to ensure the plan is right for you is to select the right policy. You can do this by using a ULIP calculator to get premium estimates. When investing in a ULIP, ensure that it does not burn a hole in your pocket.
Furthermore, to ensure a correct decision, you ought to also understand which of the ULIP benefits will best appeal to you.
ULIPs are versatile financial products that offer the dual benefits of insurance and wealth creation. They are suitable for individuals looking for a disciplined investment approach with the added advantage of life cover.
Disclaimer:
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. IndiaFirst Life Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and IndiaFirst Life and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
Under no circumstances, including but not limited to negligence, shall IndiaFirst Life or its directors or employees be liable for any special or consequential damages that are alleged to have resulted from the use and/or inability to use this site or information contained within, even if IndiaFirst Life and/or its employees or directors have been notified of the possibilities of potential damages or losses.
Tax benefits are as per the prevailing Income Tax Laws including the Income Tax Act, 1961 and are subject to change from time to time.
Unit Linked Life Insurance products are different from traditional insurance products and are subject to market risks. Please know the associated risks and the applicable charges from your sales representative or the intermediary or policy document issued by the insurance company. The premium paid in Unit Linked life insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of the fund and factors influencing the capital market and the insured is responsible for his/ her decisions.
The investment risk in investment portfolio is borne by the policyholder.
The various funds offered under Unit Linked Insurance contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. Unit Linked Funds are subject to market risks and there is no assurance or guarantee that the objective of the investment fund will be achieved. Past performance of the investment funds does not indicate the future performance of the same.
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