Top 5 Reasons To Buy A ULIP Today

You can buy ULIPs online from the convenience of your own home in today's internet-driven world. It speeds up and simplifies the procedure. ULIPs, in comparison to their previous incarnation, are unquestionably progressing. You can get a triple benefit from Unit-Lined Insurance Plans: life insurance, high returns, and tax savings, all while minimizing

 the risk of losing money. The ULIP is better for you in the long term if you get it early. So invest in ULIPs now to protect your financial future and that of your family.

Unit-Linked Insurance Plans (ULIPs) are a fantastic tool that provides both insurance and investment benefits. ULIPs have undergone a full makeover with cheaper charges because of the amended criteria of the Insurance Regulatory and Development Authority of India (IRDAI). Today's new breed of ULIPs merits a fresh look. Let's have a look at the key factors that make ULIPs such a good investment option.

Top 5 Reasons To Buy A ULIP Today

Below are the top 5 reasons to buy a ULIP today:

• Flexibility

Changes and customizations to ULIPs are common, and they are usually pursued through the following channels:

The sum assured amount is set by the assured at the start of the plan; some ULIPs allow you to increase it over time.

Most programs allow you to adjust your premium amount after a certain length of time. In addition, many plans provide a top-up function that allows policyholders to invest more through their policies and increase their investment returns.

Most ULIPs include the ability to choose your fund option at the time of initiation and at predetermined intervals thereafter. You can choose from conservative, aggressive, or a combination of the two funds to suit your needs.

• Benefits Illustration

The insurance firm is required to inform you exactly how your premium is used, what sections are withdrawn for charges, and how the policy will develop in relation to the chosen sum assured. A minimum of two scenarios, a 6% and a 10% return rate, are used. For additional information on the plan, service providers will also provide you with pamphlets and a key features sheet.

• Disciplined Savings Mechanism

ULIPs are a long-term logical investment decision, a wise approach to save for specific goals, as opposed to traditional savings, which are frequently diverted from their original purpose in the event of an emergency.

• Tax Benefits

When you invest in ULIPs, you can deduct your life and health insurance plans under Section 80C, as well as life insurance plans with critical illness riders under Section 80D of the Income Tax Act. Furthermore, section 10(10D) exempts from taxation the proceeds at maturity or withdrawals from life insurance policies.

By investing in ULIPs, you may combine wealth building with risk management, and most providers will often provide information on the performance of your various funds, increasing the value of your investment. These are compelling reasons for everyone to get a ULIP.

• Assured Benefits

ULIPs provide guaranteed payouts that shield your investment from market volatility. It means that the money you put in will be safe and secure, and you will never lose it. The assured benefit is 101 percent of the total premiums paid in this case. Many people might wonder why they should acquire an equity-oriented plan when all they need is stability, which can be found in conservative instruments like PF, bank FDs, and so on. The solution is simple: debt does not yield high profits in the long run like equities, as evidenced by the previous fact.

• Transparent Structure

Because ULIPs are transparent, all commissions and fees are listed in the policy document. Furthermore, charges and commissions in ULIPs are capped and distributed equitably during the policy term. It means that a larger portion of your premium will be invested in the market to generate profits. It is superior to other investment programs in which a significant amount of the first-year premium is dedicated only to fees and commissions.

• Loan Benefit

A loan against the policy can be obtained only when the policy has attained a surrender value, that is after the policy has been in force for at least one year and all premiums have been paid on time.

Conclusion

New-age ULIPs are a great way to develop money for the future, including retirement and kid savings. ULIPs can be combined with other investment vehicles such as MFs or PMSs, depending on the aims and time horizon. In terms of performance, cost, and taxation, the effectiveness is clear.

Also read: 

Types Of ULIP Charges You Must Know About

Understanding The Basics Of ULIP Investments

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.