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Life Insurance 688 views January 2, 2020
Unit Linked Insurance Plans (ULIP) is a hybrid insurance plan which provides life insurance cover and opportunities for investment along with tax benefits under section 80C of the Income Tax Act. ULIP Plan offers the insured individual coverage of risk together with options for investment in some qualified investments plans such as mutual funds, stocks and bonds. ULIP is a one-integrated plan consisting of the investment part and the protection part which can be managed according to insured’s needs and choice.
The investments in ULIP are subjected to the risks which are associated with the capital market. The insured individual in ULIP bears the risk on the investment portfolio. Hence, you should make an investment choice on the basis of risk you are willing to take. The policyholder or the insured should also consider the future needs of the fund invested by him/her. A unit-linked insurance plan is much more transparent as the charges are clearly stated upfront in the plan. The charges include allocation charges, fund management charges, etc.
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Unit Linked Insurance plans come with various features which help the investors to make sure about the security against all any future adversities, enjoy benefits on tax and maximise the financial corpus. A unit-linked insurance plan is one of the best investment choices that you can make. Some of the key features of ULIPs are stated as follows:
The premium that you pay is invested in the different funds available under the plan. You can choose any fund as per your risk appetite. The most common types of funds available under ULIPs are as follows-
Here is a list of some of the most popular and attractive unit-linked plans which are available in India
|Best ULIP plan of LIC – LIC’s New Endowment Plus|
|ULIP plan ICICI – ICICI Pru Signature|
|HDFC ULIP Plan - HDFC Click 2 Wealth|
|ULIP by AEGON - Aegon Life iMaximise Secure Plan|
|Bajaj Allianz ULIP - Bajaj Allianz Future Plan|
|ULIP by PNB MetLife - PNB Metlife Smart Platinum|
Unit- Linked Insurance plan is a flexible investment plan that can easily adapt to the changing financial needs of the insured. It gives the flexibility to switch between different ULIP funds and enable you to match your changing risk-bearing capacity. ULIP also offers to make partial withdrawals if you need the funds urgently and also facilitates you to make lump-sum additions to your premium amounts for increasing your investments at any time, through the facility of top-up in the insurance policy.
ULIP plan enables you to reap the benefit of market investments with lower risks than investing directly. As a policyholder, you are provided with a choice to choose from 6-7 types of investment funds with each having its unique feature. You can make a choice according to your risk-bearing capacity and investments goals.
In ULIP plans, you can choose from a wide variety of fund options according to your needs and risk appetite. If you want higher returns and willing to take higher risk, you can invest in equity-based plans. Whereas if you do not wish to take high risk and are satisfied with medium or low returns, you can invest in debt funds or balanced funds.
Unit- Linked Insurance Plans are one of the most tax-effective saving investments option available in the market. The premiums which are paid towards ULIPs are exempt from income tax up to Rs 1.5 Lakh under the prescribed section 80C of the Income Tax Act. The returns on ULIP are also tax-free under section 10(10D) of the Income Tax Act.
ULIP provides with dual benefit of life insurance as well as market-linked investments from a single policy scheme. Besides securing the future of your family and loved ones, you can also gain higher returns on ULIP plans and maximise your wealth.
Because of the benefit of hybrid nature of ULIPs, you can utilise the funds received from ULIP to meet the expenses at the time of important events in life such as child’s education, marriage, etc. Therefore, ULIPs are a great investment option in order to plan your long term financial goals.
A secure retirement plan is important for peace of mind. Retirement ULIP plans help to secure the golden years of one’s life without impacting the current budget of the insured individual. By investing small premium, you can easily build up a huge substantial corpus for your retirement.
ULIP plans are transparent in term of levied charges as well as in terms of an investment portfolio. Thus, if you invest in ULIP plans you will be properly informed about the value and the number of fund units that you hold.
The life insurance part of the ULIP plan secures your family’s in the event of your demise. Thus, ULIP plans ensure that the financial condition of your family does not get much affected even in your absence.
ULIP Plans have numerous benefits and features in favour of an investor or policyholder. The NAV of the ULIP is a smart tool for tracking the investments and ensure that the investors stay invested in the best ULIP plans. Investors should make use of the best ULIP plans in order to plan their future money requirements smartly. Before making an investment in Unit- Linked Insurance plans one must compare various types of plans and various plans provided by various insurance companies to make a wise decision and gain best returns from the investment. The investment should be made keeping in mind one’s needs and requirements.
There is a variety of ULIP plans to meet your diverse financial needs. Whether you want to save for your retirement or for your child’s education or if you want to invest your savings for earning higher returns, there are ULIP plans for every need of yours.
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