A Detailed Comparison Of Money Back And ULIPs
Updated On Feb 21, 2022
Table of Contents
- Benefits of a Unit-Linked Insurance Plan (ULIPs)
- Most Significant Benefits of Money-Back Guarantees
ULIP stands for Unit Linked Insurance Plan. These are a combination of insurance and investment plans. The Policyholder pays the Premium, which is then divided into two halves. The money is split between providing coverage to the insured person and investing in the stock market. The remaining half is invested in the stock market, while the remaining half is utilised to insure the covered individual. Because the investment made through these plans is invested in the market, and the Policyholder is the sole risk bearer, there is a risk factor.
Money Back Plans are an excellent choice for those who would prefer not take chances and have assured returns on their investments than cope with market swings. The Money Back Plans are similar to the Money Back Plans in that they combine insurance coverage with an investment portfolio. Premiums are paid at the insured's discretion at predetermined periods. This plan differs from others in that it contains Survival Benefits, which are a percentage of the Sum Assured given at predetermined intervals to the insured individual so that he or she can utilise them in an emergency or save them to create wealth. We'll compare and contrast Money Back Plans and ULIPs in this article.
Benefits of a Unit-Linked Insurance Plan (ULIPs)
ULIPs have the following characteristics:
ULIPs provide you with a lot of options.
These plans are adjustable because they give policyholders the option of investing in a number of funds. The Policyholder can also initiate a Partial Withdrawal with additional expenses.
In case of an emergency, there are funds available.
Money is required at some point in one's life. You can use the Partial Withdrawal Facility to get funds whenever you need them, at any point in your life.
Make sure your child's future is secure.
ULIPs offer a return on investment that is linked to the market. These greater rates of return can help you develop a fund to fulfill your child's financial demands.
Make planning for your post-retirement life.
The returns on ULIPs, as well as the insurance, are higher in the long run. If you start investing in ULIPs at a young age, you can accumulate funds that will benefit you when you retire.
Most Significant Benefits of Money-Back Guarantees
The following are characteristics of money-back plans:
Returns are assured.
The Money Back Plans are unaffected by market changes. Guaranteed returns include Maturity, Death, and Survival Benefits, to name a few.
Income from a second source
The Survival Benefits are a supplemental income stream that is provided at regular intervals throughout the Policy Term. These Monetary Values are available to the Policy Holder to employ in any way he or she deems fit.
Benefits of Maturity and Death
Money-Back Plans offer guaranteed returns on investment. When the Policy Term expires, you will undoubtedly receive the Sum Assured. In the event of the Policyholder's untimely death, the Lump Sum will undoubtedly be paid to the Nominee as a Death Benefit.
The Riders round out the coverage offered by the current Plan. Accidental Death, Critical Illness, and other riders will protect you against any unforeseeable or unplanned disaster.
As you can see, each of these programs has its own set of benefits, drawbacks, pros, and downsides. All you have to do now is go over the details and evaluate each plan to see which one best fits your requirements. We advocate investing in ULIPs if you are willing to take risks in exchange for higher profits. The Money Plan, on the other hand, is geared toward consumers who choose Guaranteed Returns over taking risks.
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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.