Unit Linked Insurance Plans: A sound investment
ULIPs are best for a long-term wealth creation plan. A single plan offers dual benefits of savings and protection as it has both insurance and investment.
Author:Indiafirstlife | Date:29 Oct 2020 | Time:15:00:00
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If you are looking for a reliable option that helps you to generate wealth in the long run, then ULIP is the perfect choice for you. As ULIPs are best suited for those who are looking for a long-term wealth creation plan. This one single plan offers you the dual benefits of savings and protection. Popularly known as Unit Linked Insurance Plan, ULIP offers both insurance and investment. It offers life cover with good returns, and also helps in saving taxes. In fact, as per the current market situation, ULIPs have become one of the best investment options.
How does ULIP work?
When you make an investment in ULIP, the insurance company invests part of the premium in shares/bonds etc., and the balance amount is utilized in providing an insurance cover. There are fund managers in the insurance companies who manage the investments and therefore the investor is spared the hassle of tracking the investments.
ULIPS allow you to switch your portfolio between debt and equity based on your risk appetite as well as your knowledge of the market’s performance. Benefits like these which offer investors the flexibility of switching is a huge factor contributing to the popularity of these investment instruments.
Types of ULIPs
ULIPs are categorized based on the following broad parameters:
- Equity Funds: Where the premium paid is invested in the equity market and thereby is subject to higher risk.
- Balanced funds: Where the premium paid is balanced between the debt and the equity market to minimise the risk for investors.
- Debt Funds: Where the premium is invested in debt instruments which carry a lower risk but in turn also offer a lower return.
- Retirement Planning: For those of you who plan to invest for the retirement days while you are still employed.
- Child Education: You can invest with a long-term goal of saving to fund your child’s education or save for some unforeseen circumstances.
- Wealth Creation: You can make investments to build a heavy corpus that you can utilize for a future financial goal.
- Death benefit to Policy Holders Type I uliP: This pays higher of the assured sum value or the fund value to the nominee in case of death of the policyholder.
- Death benefit to Policy Holders Type II uliP: This pays the assured sum value, plus the fund value to the nominee in case of the death of the policyholder.
Hence, with so many investment options available in the market, it gets difficult to choose the one befitting your investment needs. Thus, you may choose ULIP as your investment instrument as it maintains a great balance between providing insurance cover and generating great returns.
BY
Indiafirstlife
Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 663 crore, is one of the country's youngest life insurance companies. Our key differentiators are our simple, easy-to-understand products that are fairly-priced and efficiently serviced.We offer a diversified suite of over 46 need-based products & Riders (as of 31st March 2022) catering to varied customer segments, leveraging multiple distribution capabilities and augmenting various investment options. In all, propositions under the categories of Protection, Assured Savings, Wealth, Pension, Health and Group Funds for Employee Liabilities form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and competitively priced with risk management being our core strength.
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