When planning your financial future, the question often arises: “Is it enough to have just one type of insurance policy?” Many people wonder whether they should stick to a simple term plan or add a ULIP to their portfolio. Balancing between adequate life cover and wealth creation is a challenge many face.
Understanding the Main Function of Term Insurance and ULIP
Term insurance is straightforward and offers a large cover for an affordable premium. It ensures your family’s financial stability in the event of your untimely demise. However, it doesn’t offer any return if the policyholder survives the term. This is where a ULIP (Unit Linked Insurance Plan) comes into play.
A ULIP plan, on the other hand, provides both life insurance and investment opportunities. With a ULIP, part of your premium goes towards life cover, while the rest is invested in market-linked instruments. This allows you to potentially grow your wealth over time, and you can use tools such as a ULIP returns calculator to estimate your investment’s future value.
Benefits of Holding Both Policies
Having both, a term plan and a ULIP, can offer a well-rounded financial safety net. Here’s why:
1. Comprehensive Protection:
A term plan ensures your dependents are financially protected, while a ULIP gives you the added benefit of wealth accumulation.
2. Tax Benefits:
Both plans offer tax deductions under Section 80C of the Income Tax Act, helping you save on taxes.**
3. Flexibility:
ULIP plans allow you to switch between funds based on market conditions, while the term plan provides a fixed payout, giving you peace of mind.
While a term plan provides essential life cover, a ULIP plan offers the added advantage of investment growth. Combining both can help you achieve a balanced financial portfolio, ensuring your family is protected and your wealth keeps growing simultaneously.
** Tax exemptions are as per applicable tax laws from time to time.
Disclaimers:
Unit Linked Insurance Products are different from the traditional insurance products and are subject to risk factors. The Premium paid in unit-linked life insurance policies are subject to investment risks associated with capital markets and NAVs of the units may go up or down, based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. IndiaFirst Life Insurance Company Limited is only name of the Insurance Company and _________________ (UIN__________) is only the name of the Unit Linked Life Insurance contract and does not in any way indicate the quality of the contract, its future prospects, or returns. Please know the associated risks and the applicable charges from your Insurance Agent or the Intermediary or policy document issued by the Insurance Company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale.
IndiaFirst Life Insurance Company Limited, IRDAI Regn No.143, CIN: U66010MH2008PLC183679, Address: 12th & 13th floor, North [C] Wing, Tower 4, Nesco IT Park, Nesco Center, Western Express Highway, Goregaon (East), Mumbai – 400 063. Toll free No – 1800 209 8700. Email Id:customer.first@indiafirstlife.com, Website :www.indiafirstlife.com, Fax No. +91226570600. Trade logo displayed above belongs to our promoter M/s Bank of Baroda and is used by IndiaFirst Life Insurance Co. Ltd. under license. Adv. Ref. No.:_________.
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