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ULIP As An Investment Option For Senior Citizen

Updated On Sep 08, 2021

Old is often termed as the golden year of life. However, for it to be truly golden, iis necessary to be financially self-sufficient in your latter years. Even in your later years, efficient saves and investing can help you achieve financial security and stability. ULIPs are the most effective technique to accomplish this. Unit-Linked Insurance Plans (ULIPs) combine insurance and market-linked investment funds into a single product.

What makes these designs even better is that they are extremely adaptable. The policyholder has unlimited control over everything from investment funds to policy duration and more. Furthermore, ULIP investment alternatives allow you to withdraw a portion of your fund in times of crisis without having to liquidate your entire portfolio.

Reasons Why ULIP Is An Investment Option For Senior Citizens

The following are reasons why ULIP is an investment option for senior citizens

1. High Profits

ULIPs can give substantial returns to shareholders due to their ability to produce massive yields across funds. ULIPs might invest more in a certain type of financing depending on the policyholder's risk profile and investment situation. A ULIP that spends more inequities funds has a better chance of achieving higher returns, but these products are also tougher due to market volatility.
ULIPs can also invest a bigger amount of their funds in corporate bonds, which provide lower yields but more security for the capital invested. ULIPs also enable policyholders to participate in fusion funds, which offer a balanced mix of equity and debt funds, ensuring good returns while also ensuring the security of assets invested.

Must Read: Unique Features Of ULIP That You Must Know

2. Withdrawals In Parts

In the life of senior persons, economic emergencies can happen, needing immediate action. In these cases, ULIPs can be quite valuable because they allow insurers to make fractional distributions from the funds after a certain period has passed. Most ULIPs provide a five-year lock-in period after which policyholders can withdraw assets for emergency financial situations where payments are required right away. These payments could be used to offset unforeseen medical expenditures or other cash constraints.

3. Dexterity

Insured with ULIPs have the ability to move funds at any time. Because consumers can easily move between plans, they can efficiently handle their investments based on their individual risk profiles and financial goals. Many ULIPs permit consumers to make unlimited free modifications each year, enabling them to swiftly swap funds tailored to the needs and market mood. In some situations, switching funds might help investors beat the market and achieve higher returns.

4. Coverage for Life

The much more important benefit of buying a ULIP is the life insurance cover it offers the policyholder. The policyholder ensures that their descendants are protected at all times of unforeseen circumstances by acquiring a life insurance policy.

5. Benefits From Income Tax

Insured who engage in ULIPs might benefit from a variety of tax benefits. Income tax benefits are provided by several articles of the Income Tax Act of 1961, including itemized deductions on premiums and exclusions on the fund acquired at maturity. Policyholders who migrate across funds to maximize their returns are also eligible for tax benefits.


A ULIP is a product that combines income and coverage. Insured can pay their premiums either annually or monthly under this plan. A component of the payment is used for insurance coverage, while the remainder is deposited. The investments in these programs are exposed to the risks involved with the capital market. In his or her investment portfolio, the policyholder carries the investment risk. As a consequence, it's best to focus your financial decisions on your objectives as well as your tolerance for risk.

Also Read: How To Benefit From Unit-Linked Insurance Plans?

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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