ULIPs are fast becoming popular in India due to the multiple benefits they offer to investors. If you haven’t considered investing in ULIP yet, then check out this post to know why you must invest in one.
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A ULIP (Unit Linked Insurance Plan) is a hybrid plan that can grow your wealth and provide insurance cover. It is fast becoming popular in India as investors do not require to invest in different plans to get different benefits when they can avail of the same benefits by purchasing a single ULIP.
Once you understand the benefits of investing in ULIPs, you might as well consider purchasing one.
Five Reasons to Invest in ULIP
- Dual Benefits in A Single Plan
ULIP is the only investment plan in India that offers the dual benefit of insurance and investment in a single plan. The premium paid toward a ULIP is divided into two parts. The first part is used to secure life insurance cover for the policy buyer, whereas the second part is used to invest in equities and debt funds to grow the wealth of the policyholder.
Therefore, a ULIP buyer doesn’t need to buy separate insurance and investment products, which saves a lot of premium amounts and makes personal finance management easier.
- Flexible Withdrawal Facility
Most insurance products come with a lock-in period during which you can’t withdraw your money. ULIPs, on the other hand, provide the option of withdrawal during the lock-in period, although it is not recommended as this will attract charges and deduction fees. Click here: cbdgummies
Nevertheless, the option of withdrawal during the lock-in period can be very helpful when faced with a financial crunch or an emergency.
- Flexibility in Investment Options
ULIPs offer the following flexibility in investment options.
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- Risk Management
The policyholder is free to move his investments between funds with different weightage to equity or debt. For instance, you can choose to give more weightage to debt funds if you are a risk-averse investor, or you might go for more equity exposure if you like taking risks to optimise your returns.
Alternatively, you can also let the policy automatically manage your risk exposure as per your age, where your equity exposure will keep decreasing as you grow older.
- Top-Up
This option allows you to invest more money in your existing plan instead of purchasing more plans. More information click here: mypetnews
- Change Fund Manager
You can change the fund house that manages your investment fund in ULIP. You can redirect your future premiums into another fund house during the commencement period of the fund. There is no limit on the number of changes you can make.
- Tax Benefits
You can be eligible for a tax exemption of up to Rs 1.5 lakh every year on the amount paid toward ULIP premiums under Section 80C of the income tax act.
- Potential of Higher Returns
A ULIP investment can generate significantly higher returns than traditional fixed return instruments when invested for the long term. Therefore, it can be an effective tool to fight inflation in the long run.
A ULIP can be a one-stop investment solution for many of your financial goals. However, consider the insurance provider’s reputation as well, among other factors, before joining the ULIP bandwagon. For more information visit this site: topnewsplus
