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Tips And Advice To Choose The Best ULIP In India

Published On Sep 12, 2021 12:00 PM By InsuranceDekho

A ULIP is a financial solution that combines the finest features of both investment and insurance. In its most basic form, a ULIP, or Unit Linked Insurance Plan, is a composite product offered by insurance firms that provide both security and wealth growth. Because it is a market-linked investment product, ULIPs allow investors to profit from the capital market. When compared to other insurance products offered by insurers, ULIP is constructed differently. Long-term investments in ULIPs have typically yielded a return of 12-15 percent, according to past performance. Large-cap stock mutual fund performances have likewise shown comparable results.

Tips And Advice To Choose Best ULIP

The following are some considerations to make when selecting the finest ULIP  in India:

1. Choose ULIP Funds Based On Your Objectives

ULIPs allow you to invest in debt funds, equity funds, or a combination of the two. Long-term growth is provided by equity funds, while wealth preservation is provided by debt funds. So, depending on your objectives and risk tolerance, you can choose to invest in debt or stock. Furthermore, depending on your needs, you can shift your money between various funds in a ULIP.

2. ULIPs Allow You To Invest For The Long Term

ULIPs help you build wealth and achieve your financial goals in addition to providing life insurance coverage. If you invest in ULIPs for a long time, your insurance provider may provide you with extras such as Wealth Boosters and Loyalty Additions to help you grow your money even more.

3. Choose the Minimum Amount Of Life Insurance Coverage

ULIPs are designed to assist investors in achieving long-term financial goals such as further education for their children, marriage, and so on. In addition, ULIPs give financial protection to the policyholder's dependents in the event of the policyholder's death. As a result, it's critical to choose the correct amount of life insurance coverage while keeping all of your future demands in mind.

4. Understand Your ULIP Fees

  • Charges for Premium Allocation
  • Charges for Policy Administration
  • Fees for Fund Management
  • Charges of Mortality

5. Tax Benefits

According to the Income Tax Act of 1961, ULIPs also provide tax benefits.

The following are the tax benefits that you can get with a ULIP :

  • Stage 1: Entry Benefit: You can claim a tax deduction for paying your premium under Sections 80C, 80D, and 80CCC.
  • Stage 2: Earnings Assistance: The money growth you receive is tax-free.
  • Stage Three: Tax-Free Switching: You can switch between equity and debt funds without paying taxes.
  • Stage 4: Exit Benefit: You will be excused from paying taxes on the maturity amount.

6. Examine The Benefits Of ULIPs

The features of the top ULIPs in India are the last thing to consider:

  • Premium Redirection: ULIPs allow you to invest your future premiums in a variety of funds in addition to your base funds.
  • Top-Ups: Any money you have leftover can be invested in your existing plan numerous times or once.
  • Switching Funds: You should be aware of how many free switches are included in your ULIP. This is due to the fact that most insurance companies enable free switching between debt and equity funds.
  • Withdrawals in Parts: You can use this tool to withdraw a portion of the money you've invested in ULIPs. However, this feature is usually engaged after the lock-in time has ended.r


It's critical to look over the benefits and features of your ULIP once you've learned how to find the top ULIPs. As a result, it's a good idea to study your policy documents thoroughly. This will assist you in making the best selection possible.

Also read - ULIP Or SIP? Which Is Better?

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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