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Is Investing in a ULIP a Good Decision?

Updated On Apr 22, 2021

Think twice before you squander your current income. To secure a better financial future, you must use your current income judiciously. The best way to do this is to purchase an investment or an insurance plan to keep your future secured financially. A single plan which offers you both these benefits is a Unit-Linked Insurance Plan (ULIP).

A ULIP brings you both the benefits of an insurance as well as an investment plan. You get life cover with an opportunity to invest in various types of funds as per your investment style and risk appetite. 

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

Benefits of a Unit-Linked Insurance Plan (ULIP)

Here are some of the most essential benefits of ULIPs. Know them to find out if purchasing a ULIP is a good decision for you and your finances.

1. Dual Benefit of Life Cover and Investment

One of the biggest reasons why ULIPs are so popular is the dual benefits they provide in a single plan. Not only does it provide you with an insurance plan, but also an investment option. With it, you can invest in equity as well as debt and balanced funds while keeping the future of your loved ones secured in your absence.

2. Investment Flexibility 

A ULIP also has incredible flexibility which gives investors a great opportunity to have control over their savings. All investors are free to increase or decrease the degree of risk they want to undertake in terms of their investments. You can also freely switch your investment between equity, debt or balanced funds. Top-up facilities let you add on any amount to your existing investments, anytime.

Furthermore, this flexibility also helps you get great returns. Regular investments mean your money gets compounded and makes for higher returns. There are also various rewards as you stay invested for long periods. These include boosters and additions to your invested sum. 

3. Partial Withdrawals

A ULIP also lets you withdraw your funds, unlike usual investment plans. There is enough flexibility to withdraw your funds partially without having to compromise your assets. This is especially useful after a specified lock-in period that is applicable to all ULIPs. 

4. Loan Facility

Some ULIPs also allow you to avail a loan under the plan once it has acquired a certain surrender value. The availability of loan facility helps you meet unplanned financial requirements with ease.

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

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Final Verdict

As evident from the above factors, a ULIP is a very beneficial plan. It brings you multiple benefits and advantages under a single, easy plan. Plus, it has ample potential to grow your assets and investments. 

Nonetheless, the choice of an insurance and investment plan is an extremely personal one. Therefore, you should evaluate your needs, both current and future, as well as your circumstances to truly know if buying a ULIP is a good decision. 

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