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Need For ULIPs During Coronavirus Outbreak

Updated On May 10, 2021

ULIPs are unit-linked insurance plans which provide the dual aspect of both investment and life insurance. ULIPs provide various options to allocate your premium in 3 types of asset classes i.e equity, debt, and money market, you can select the fund option based on your risk appetite and investment avenues. The debt-oriented fund options involve less risk as compared to equity-oriented funds, during COVID-19, you can invest in debt-oriented funds to safeguard yourself against market volatility. There are various benefits that are provided by ULIPs to protect you and your loved ones during the Coronavirus pandemic, few of them are mentioned below:

Need for ULIPs During Coronavirus Outbreak

Following are a few reasons which are accelerating the popularity of ULIPs among investors during the ongoing Covid era:

1. Fund Options

ULIPs provide substantial liberty to its policyholders where they can choose to invest in debt funds, equity funds, or a combination of both. During COVID-19, the policyholders can choose to invest in debt funds to escape the extreme volatility of the market involved in equity funds. Investing in debt-related funds provides you moderate returns with low risk. 

2. Fund Switching 

One of the attractive features of ULIPs is fund switching where the policyholder can make changes in the fund option. This option is very necessary during the pandemic as you can switch to debt funds, you also have the option to redirect the proportion of the premium allocated via the premium redirection option. 

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3. Long Term Investment 

ULIPs are known to be a long-term investment as the lock-in period alone is 5 years. ULIPs need substantial time to grow and yield returns from the market. Some ULIPs also provide guaranteed additions to their policyholders for staying invested in the plan for a long time, such additions maximize your wealth and can be held accountable during any rainy day. The returns from ULIPs are comparatively higher than any other investment product. 

4. Tax Benefits

The premium paid by you in the ULIP is eligible for tax exemption under section 80C of the Income Tax Act, 1961. Apart from saving your funds and investing them, ULIPs provide the benefit of wealth maximization. Such exemptions can be used to increase your fund value at the end of the policy term. 

5. Life Cover

As many of you know that ULIPs provide life cover till the end of the policy term apart from the investment aspect. During the pandemic, you may have more expenses as compared to the income, any unfortunate incident can put more financial burden on your family. Life cover provided by the ULIP provides financial security to your loved ones even in your absence.

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ULIPs have the versatility to provide life cover along with investment solutions. During a pandemic where the investors need customizable fund options, ULIPs provide just the solution i.e fund switching option. Consider a ULIP today, if you require flexibility in the fund options along with life cover during the whole policy term. 

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.

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