Different Needs Through ULIPs
Updated On Jul 04, 2021
Table of Contents
ULIPs are suitable for availing market-linked returns. This feature of ULIPs makes it an exceptional option for obtaining larger returns when market circumstances are favorable.
These plans allow flexibility, in addition to the twin benefits of investing and life insurance, promoting an investor's investment habits. These programs cater to a wide variety of investors and address different investment goals.
Different Needs You Can Fulfil Through ULIPs
Here is how ULIPs cater to the different needs of an investor -
1. Wealth Creation
ULIPs have the option of equities and debt funds to generate larger returns. This will assist you in achieving life goals such as purchasing a new home, supporting your child's higher education. These plans are a popular wealth generation tool and yield higher returns in the long term as compared to other counterparts.
2. Insurance Cover
Since, ULIPs offer the combined benefits of Insurance cover and investment, these plans release money to the nominee of the policy, in case of unfortunate events related to the life of the policyholder.
It helps policyholders secure their future and the present by cultivating the investment component while relying upon Insurance coverage in the time of need.
3. Suitable For Investor With a Risk Appetite
ULIP provides plans with a wide range of risk variables. It provides a variety of funds for investors to choose from, depending on their risk tolerance. Under this plan, a high return on investment is typically preceded by a high amount of risk.
4. Creation of Emergency Funds
ULIPs come equipped with the feature of partial withdrawal. This essentially means that you can take a particular amount of money out of your current reserve. This provision is often permissible after a lock-in period, usually five years. This allows you to fulfil unexpected financial needs through your emergency fund built over a period of time without having to rely on your other assets and resources.
5. Fulfillment of Long Term Investment Goals
In a ULIP, money is compounded over a long period of time, which has proven to be beneficial. Investors like ULIPs as a long-term investment choice as these plans' net returns are nonetheless high when compared to their peers. These plans operate well in favorable circumstances and produce good long-term results.
ULIPs work in accordance with the market conditions to provide higher returns to the investor. These plans are available for a variety of investment objectives. However, the aforementioned factors demonstrate the ULIPs’ effectiveness for an investor.
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.