How To Choose A Right ULIP?

A Unit-Linked Insurance Plan (ULIP) is one of the most beneficial investment plans available currently. It is not only an investment, but also an insurance plan. Not only do you have opportunities to let your wealth grow, but also guarantee a death benefit for your family members in case of your unfortunate demise. 

A ULIP provides you with ample opportunity to let your finances thrive in the present along with securing the future of your loved ones with a life cover. There are a number of ULIPs available in the market, offered by varying life insurance companies. To choose the right ULIP, check out the most essential factors to consider.

Also Read:- What is the Right Time to Purchase a ULIP?

How To Choose A Right ULIP?

You must consider the following factors while choosing a Unit-Linked Insurance Plan - 

1. Value of Death Sum Assured

Besides being an investment plan, a ULIP is also an insurance plan. Therefore, it is important to carefully choose the amount of coverage you require. There are several things that can affect this such as future plans of new homes, growing children, illnesses and even your family’s current lifestyle. You would want them to maintain it after your death which is why it is important you take it into consideration.

2. Available Fund Options and Their Composition

A ULIP also provides you with choices with regards to your investment plans. You can choose to invest in equity, debt or balanced plans. According to the risk you are willing to undertake, you can choose your investment as well as change the amount of money you have invested. This is why ULIPs are so famed to be flexible and cater to the choice of the policyholder.

3. Policy Tenure

To truly get the fruits of your investment with a ULIP, you must stay associated with it for a long time. The sum that you have invested gets compounded regularly which makes for high returns. There are also benefits available for investing for longer periods in the form of boosters and additions to your assured sum. This adds to your investment. Thus, you should also check if the policy term of your ULIP matches your investment time horizon or not.

4. Investment Strategy

ULIPs generally come with two types of investment strategies namely self-management of funds or dynamic/automatic fund management. Some ULIPs offer both these strategies while some ULIPs come with only a single strategy. So, while selecting a ULIP, do check if the investment strategy offered under the plan matches your investment style.

How To Get The Best ULIP?

The most important thing to find the best ULIP is to browse through the large variety of ULIPs available. Make sure to look at multiple plans before settling on one. To fixate on a particular ULIP is not a good idea and you might miss out on some great plans. You can compare different ULIPs easily and conveniently at InsuranceDekho at a single platform and get the best ULIP quickly.

You May Also Like To Read:- What is Fund Switching in ULIPs?

Difference Between ULIPs And Mutual Funds

Endnotes

Make sure to evaluate all the above factors with the ULIP you have in mind. They are important factors that will help you determine the right ULIP for yourself, your family as well as your finances.