ULIPs (Unit Linked Insurance Plans) serve as popular life insurance products in India. These insurance tools offer risk cover in addition to investment options (subject to capital market risks) in qualified investments of the likes of stocks, bonds, mutual funds, etc. for fulfilling your risk appetite. The two components of these single integrated plans – the protection part and the investment part -are capable of being managed in line with your specific choices and needs.
Be it for the sake of your child’s education, retirement planning, health reasons, the marriage of your children, or any other future fund-based needs, these unit-linked insurance tools will surely suit your goals. This article throws light on why a ULIP is a great investment option when compared to other investment plans.
Here, you will also understand the steps needed to buy ULIPs online.
Table of Contents
Is Buying Ulip Essential for You?
The important reasons for ULIPs being essential for your insurance cum investment needs are outlined below:
1. Feeds your Risk Appetite
Your investments in ULIPs are based on the extent and scope of your risk appetite. Say, you like to play with lower risks; in that case, you can go for investments in debt funds. Moderate risk players could opt for balanced funds bracketed between debt and equity funds.
On the other hand, high-risk players think of equity funds as a great investment opportunity. Equity funds, if chosen with care, provide high returns in the long run and as and when the market performs well.
2. Transparency
Ranking high on the list of transparent investment instruments, a ULIP online declares the exact charges involved, as well as the overall performance of the current account owned by you.
3. Flexibility
Unlike most other investment plans, it is possible for you to keep switching between different funds in ULIP. In other words, as per your changing risk appetite, you may want to shift your funds between equity, debt, and other financial tools across any given period of time.
4. Long-term investment
Most ULIP holders invest in this financial instrument for the sake of fulfilling their long-term needs and goals, such as purchasing a home, opening a start-up business, buying a car, etc. As the lock-in period of a ULIP covers 5 years, instead of the usual 1-3 years in most other investment options, it is bound to give satisfactory returns.
So, if you decide to exit an Ulip after a period of 5 years, you would end up getting a bigger amount than what you would get if you had put your money in a savings account without investing. The power of compounding fuels the returns from ULIPs, making your investments earn for themselves even though they remain locked in for 5 full years.
5. Tax Benefits
All investment options in India are not known to provide lucrative tax benefits; this is exactly why a ULIP is of primary importance for your portfolio. In investing in a ULIP online, you grow your money along with saving on taxes – isn’t that something?
6. Life cover
On offer by life insurance companies in India, ULIPs are significant investment and protection tools alike. They may not offer as high a life cover as provided by a term or comprehensive plan but do so nevertheless.
Steps to Buy Ulip
These easy steps will guide your purchase of ULIPs online.
1. Select from a wide range of options
It is better to select a ULIP that offers maximum fund options with allocations in equity, debt, mutual funds, etc. This will give you the flexibility to align your hunger for risks with a guarantee of sound returns.
2. Compare and buy ULIPs online
As there are numerous options available in the marketplace, it would be easy for you to get confused with regards to their lock-in period, returns, risk allocation, exit points, etc. Comparing and buying ULIP online is the best way of going about the process in a hassle-free manner.
3. Ability to switch and exit at call
It is important to check out the features, terms and conditions, as well as the fine prints that guide your investment in ULIPs. This will guarantee good returns while preventing any rude shocks later on.
Last Word
Your investments in ULIPs can be ably facilitated by insurance aggregator sites like Coverfox.com. These ideal investment options promise to take care of your long-term financial goals adeptly. It is well-advised that you go through the performance metrics and ratings of different ULIPs before making your investment.