Common features of Unit Linked insurance plans
Published On Jul 11, 2021
Unit Linked Insurance Plans are a mix of insurance policy and investment tools, which provide the opportunity to grow your corpus easily. Under ULIPs you get to avail the benefit of life cover and you get the opportunity to save your earnings in a high-yielding investment tool.
Before purchasing a policy, you should always go through the plan carefully and thoroughly to know about its features and benefits offered under the plan. This way you can be equipped with knowledge of what the plan offers and you can make an informed purchasing decision. Below mentioned are some of the common features of Unit Linked Insurance Plans.
Common Features Of Unit Linked Insurance Plans
Following are some of the common features of Unit-Linked Insurance Plans(ULIPs):
- Provides Life Cover: ULIPs are a type of life insurance plan. ULIPs provide dual benefits of life coverage and the opportunity to invest. Since ULIPs are a type of life insurance plan, in case the life assured passes away during the policy term, the insurance company will provide a death benefit to the nominee.
- Multiple Fund Options: One of the most popular reasons why people want to invest in ULIPs is because ULIPs provide a variety of market-linked investment options. You can choose to invest in equity funds, debt funds, cash funds etc. You can also choose to switch between the funds anytime during the policy term. You can choose to invest in a fund option that you think will provide you with high-yielding returns.
- Fund Switching: In case you are not satisfied with the type of fund you choose or you think there is going to be a change in the market conditions, you can switch from one fund to another under Unit-Linked Plans. This way you can avoid market fluctuations by opting for a different fund type. You switch funds anytime during the policy term without any additional charges.
- Partial Withdrawal: Under ULIPs you can avail the facility of partial withdrawal in times of crises or anytime during the policy term. You can withdraw a portion of your assets. This facility under ULIPs ensures that you do not have to liquidate your assets in difficult times.
- Loan Against Policy: Loans against the policy are allowed under ULIPs. It requires less documentation and the lending company may provide a lower interest rate.
ULIPs are a unique kind of investment insurance plan. This plan provides life cover and the opportunity to grow your wealth via different market-linked investment options. This type of plan offers wealth appreciation and helps you ensure a financially secured future for your loved ones even when you are not around. Before buying a policy you must go through all the features of the plan carefully to familiarise yourself with the plan. This will help you make an informed decision.
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.