October 12, 2019
TCP : ADVERTORIAL
To achieve your life goals, you can either have the approach the more difficult path or take the smart way. The hard path involves working multiple jobs, odd shifts, and spending frugally. On the other hand, the smart way means putting your money to work for you and create wealth that suffices your life goals as well as those of your loved ones’.
No one likes living a life with financial hardships. To make sure that you don’t have to deal with limited finances ever, you need to create a robust financial plan that can help you meet your goals while saving up for the future. The insurance market offers an array of financial options that provide you investment benefits, beyond just savings.
Investment plans such as ULIP plans (or Unit Linked Insurance Plan) offer you ample opportunities to create wealth while securing yourself and your loved ones against any contingencies. To know and understand and know more about ULIP benefits and requirements, here are some details to start with.
What Are Ulips, And How Do They Work?
If you have been searching for an investment plan that provides you 360-degree financial security, then ULIPs are what you need. ULIP plans are designed to give investors the dual benefits of savings as well as life insurance cover; thus combining wealth creation opportunities with the added security of life cover.
ULIP plans from reputable insurance companies such as Max Life Insurance do this by putting a portion of your investment into life insurance and the remaining into equity or debt fund or both to help you meet any long-term goals such as retirement, house purchase, or other significant events that need saving for. Since this is taken care of on your behalf by fund managers, you as the investor are free from all the hassles involved tracking the investments. That being said, you can also review your investments through their Net Asset Value (NAV) , which is updated by the insurers daily.
Moreover, ULIP plans have a lock-in period of 5 years, as approved by the Insurance Regulatory and Development Authority of India (IRDAI) . Therefore, ULIP benefits are best utilized when you remain invested in them for an extended period of say 10 or 15 years.
ULIP Benefits- Why Invest In Them?
Here are some advantages of ULIP plans that you should know about:
1.ULIP plans give you the chance to switch fund allocation between debt and equity instruments, as per your risk appetite and market knowledge. This is another factor that makes ULIP plans popular as an investment option.
2.As mentioned earlier, ULIP plans provide a life cover along with the opportunity for investment. This ensures you and your family’s financial security in case of emergencies such as road accidents, cardiovascular conditions or untimely demise.
3.Another factor that makes ULIP plans an attractive investment option is its tax saving capabilities. The premiums paid towards a ULIP is tax deductible under Section 80C, while the returns on maturity are tax-exempt under Section 10(10D) of the Income-tax Act.
4.ULIP plans are your path to fulfilling your long-term life goals. So whether your long-term goals involve buying a house, a new car, child education, marriage, or anything that requires substantial financial assistance, then ULIP is a good investment option. The invested amount under a ULIP gets compounded; thus, making the net returns generally more. To achieve maximal returns, you need to remain invested in the ULIP policy for more extended periods.
5.After a lock-in period of 5 years, you can make partial withdrawals from your ULIP, to take care of any emergency requirements
6.ULIP plans provide you an opportunity to make additional investments through top-ups or loyalty or booster additions. These additions enhance your fund value as well as help in increasing your protection quotient as well.
To Get the Most of Life, Invest in a ULIP Plan
Overall, ULIP plans help make your plans a reality by providing comprehensive financial security. If you have not thought about investing yet, its best, you do so as soon as possible. Starting early allows you to give your savings the much-needed time for growth. Stay invested, regardless of the market conditions, and refrain from exiting or surrendering the ULIP before maturity or unless the goal is achieved.