What is the Right Time to Purchase a ULIP?
Updated On Apr 26, 2021
Unit-Linked Insurance Plans (ULIPs) are investment cum life insurance plans. These plans help you secure the future of your loved ones with a life cover and also help you appreciate your wealth over time by investing your hard-earned money in market-linked instruments.
Their dual nature and versatility make ULIPs a popular choice. However, there are often queries about the right time to purchase a ULIP. Although there is no such right timing, it is best to keep the following pointers in mind.
ULIPs are Long-Term Investments
ULIPs truly bear the best fruits when you invest and dedicate a long time to them. Since the amount you put in is compounded annually, the more time you keep your funds invested, the higher will be the returns. Plus, companies also often provide benefits like adders to long time investors. The more time you give it, the more you will be able to let your savings grow.
Also Read:- Things You Should Know About ULIPs
ULIPs have a lock-in period of five years. Therefore, these plans also help you maintain discipline when it comes to investing habits. They provide plenty of flexibility in terms of choice of funds and risks undertaking, but nevertheless, make for good financial habits. Even if you are young and only just starting out with investing, ULIPs are a good plan, to begin with.
Start as Early as Possible
Starting early with a ULIP is beneficial not only for your insurance component but also for your investment component. The older you get, the more complications arise in life. These include the risk of contracting diseases, more liabilities, more debts and much more. It makes it difficult to get insured and may result in higher premiums to reach your coverage goals.
If you start investing at a young age, you can gradually build up to your financial goals. You can pay regular premiums. Moreover, you can increase your premium amount with the top-up facility available with most ULIPs.
Although there is not much to note about the right time to purchase a ULIP, the above pointers serve to help you get an idea. Overall, it is always best to start early. That way, you will get more time to grow your funds as well as steadily work towards your financial goals.
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