- 15 NOV 2018
Benefits of Unit Linked Insurance Plans
Amey was on a tea-break. He looked confused and so his friend Suraj asked him “What happened? You look confused…”
Amey replied, “Yes. With so many investment products available in the market, it becomes difficult to select a single plan.”
Suraj then asked him, “Do you have clarity and goals set?
Amey said. “Yes. I want to accumulate wealth for early retirement.
Suraj then convincingly replied, “Then, it is easier for you to decide which product to opt for. You can go for ULIPs as it will provide you the benefits of both the worlds – investment and insurance!
There are a number of benefits associated with it. Allow me to explain:
It is not important for you to have technical expertise in this subject. Just like how you have professional managers in mutual funds, similarly, these fund managers help you in making an investment with a Unit Linked Insurance Plan. They are supported and guided by an entire team of analysts, researchers, economists and other professionals to help you make the right decision.
Since ULIPs are insurance products, they offer you a life cover as well. On one hand you get a life cover, on the other hand, you make the investment as per your choice. This way not only do you ensure protection as well as plan your finances for the future, both at the same time. However, it is recommended that you purchase a term insurance plan along with ULIP as it offers greater security.
It is possible to make additional investments in the form of ‘top-ups’. When the market scenario is good or when you feel you have surplus funds to invest, you can top-up your premiums to enjoy great returns in the future.
ULIP serves people who have varying risk capacity and not those who are opposed to taking any kind of risk. Depending on the amount of risk an investor can take, you can select the type of individual funds. ULIPs offer different types of funds such as equity which invest in company stocks, balanced which have a healthy mix of equity and debt, and pure debt funds where the risk involved is low but the chances of earning high returns is also lower.
Needs change over a period of time which also lead to change in investment goals. In case of a Unit Linked Insurance Plan, an investor is free to switch from one fund to another. This is another form of flexibility that this plan offers. Edelweiss Tokio Life – Wealth Plus allows the investor to make unlimited switches without any cost involved.
A ULIP also allows the ‘partial withdrawal’ of money which may be required during an emergency.
After listening to all the benefits of ULIPs, Amey thought of considering it to fulfill his retirement goals!
- 21 FEB. 2019
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