Why ULIP Investments Are Advantageous?
Updated On Oct 30, 2021
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Premium payment options are more flexible with ULIPs. You can switch between equity and debt funds if you want to. You can take a portion of your money from ULIPs whenever you need it. Depending on your risk appetite, you can also choose where to invest.
ULIPs also provide tax advantages on both the premiums paid and the returns received at the end of the policy.
Why ULIP Investments Are Advantageous
Below are the top reasons why you should invest in ULIPs:
1. ULIPs Offer Flexibility
A variety of equity, debt and balanced fund options are available in most ULIPs. As a result, you'll be able to invest your money according to your risk tolerance and expected return. ULIPs also allow you to move your money between funds to maximize your earnings.
Change your Life Coverage whenever you want: You can choose your Sum Assured* at the start of your policy with ULIPs. Some ULIPs additionally allow you to increase your Sum Assured during the plan's term to meet your changing protection needs (E.g. marriage, childbirth, etc.). Sum Assured refers to the guaranteed minimum amount that your nominee will receive while you are away.
Change your premium investment amount with flexibility: In addition to your normal premium, you can additionally pay ULIPs a top-up amount. This is an excellent approach to maximize the value of your money.
Ability to choose a rider on the fly: Riders are extra protection options that can be added to your ULIPs. The Unit Linked Accident and Disability Benefits rider is one of the most prevalent riders. It raises the amount of Life Cover received by the family in the case of unintentional death. It also assures that your Life Coverage is maintained in the event of accident disability.
2. ULIPs Offer Transparency
The way charges work in ULIPs is transparent, and the following elements help you make educated decisions:
Example of a benefit
Consumers have the right to a sales benefit image. A benefit graphic can help you figure out how much you've spent on premiums and benefits. It also contains important information about the possible returns according to the Sum Assured and premium chose. While you are away, the Sum Assured is the minimum guaranteed fee paid to your nominee.
3. Free-Look Period
A free-look period is offered by most life insurance plans, including ULIPs. If you are not satisfied with your policy after 15 days, you can cancel it. After deducting the policy's relevant expenses, you will be reimbursed for the whole premium.
4. Net Asset Value (NAV)
It's critical to keep a close eye on the performance of your policy. The company provides daily NAV updates to assist you in your effort. The price at which a fund's units are purchased is known as its NAV. The performance of your assets is shown by a change in the NAV value (increase or decrease).
5. ULIPs Promote Savings With A Purpose
You must save in order to achieve significant life goals such as purchasing a home, funding your children's further education, or planning for a happy retirement. One of the most practical solutions is to use ULIPs, which are long-term systematic investment alternatives.
ULIPs are designed to help you invest your money in a disciplined manner and are designed to help you achieve specific financial goals. Without such a strategy, your long-term objectives may be jeopardized in order to meet immediate needs.
6. Brochures And Publications Outlining Major Features
While benefit illustrations are helpful in illustrating the measurable characteristics of ULIPs, you should also be aware of the various features and perks that ULIPs have to offer.
You may discover more about the advantages of your coverage by reading the product brochure. Once your insurance is published, you'll obtain an important segment paper that summarises the plan's important features. This, combined with the product material, ensures that you understand the plan you've purchased completely.
Life insurance firms, as previously indicated, provide ULIP as a product. ULIPs allow you to invest while also protecting yourself. A ULIP may not provide as much life coverage as a term plan, but it does provide some coverage.
Also read - Various Types Of ULIPs Explained
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.