Sagar, 21-year-old, had just initiated his professional career. Like every other youngster, the salary would be credited on his bank account at the start of the month and then it would be eventually exhausted on pizzas, movie tickets and uber. These secondary expenses had reached the brim and so Sagar decided to speak to his seniors and plan that who could guide him to invest in a plan that would inculcate the habit of savings.
Sagar’s Senior, Amit, introduced him to Unit-linked insurance plans or ULIPs. He told him that the new age ULIPs are being recognized as one of the best investment options in recent times, especially for the young millennial audience.
Sagar inquisitively asked Amit, “What makes New Age ULIPs such a smart investment option for millennials in the current volatile market?”
Amit replied, “ULIPs are like gateways to the world of equity. ULIPs have are like a combination of investment and life insurance. ULIPs are great for youngsters like you because they have a 5-year lock-in period which helps to inculcate the habit of saving, so that’s definitely a plus.
Even if you look at it from their tax saving perspective or having the option of choosing from different funds, the benefits of ULIPs are worth the time and money invested.
Let’s look at how the new age ULIP is an innovative and investor-friendly plan;
No administration or allocation charges: During the earlier days, ULIPs were looked down upon because of their additional charges that would eat up some part of the premium amount paid by an individual. However, the new age ULIP like Edelweiss Tokio Life Wealth Plus has zero administration or allocation charges. Which means your premium is invested in the fund of your choice thus enabling you to reap more benefits.
Switch between funds: ULIPs allow you to switch between funds and maximize the value of your returns based on your requirements. You can choose between pure debt, pure equity, and balanced funds to invest in. If your funds start to incur losses, then you can switch between funds to save yourself from incurring a further loss. Most ULIPs have limited or charge when you switch between funds. Edelweiss Tokio Life Wealth Plus provides unlimited free switches. You can switch between the top-rated funds based on your risk appetite.
Additional Allocation: This is the most unique feature of Edelweiss Tokio Life Wealth Plus. It is a plan where the company also invests with you in the form of additional allocation and premium boosters. The first five years the company will invest 1% p.a. of the premium paid along with you in the fund, from the fifth to the tenth year this would increase to 3% p.a. and eventually from the 15th onwards, it would increase to as high as 7% p.a. This feature will help you get maximum returns because it’s not just you but the company as well who will invest in your fund!
Tax Benefits: The strongest highlight of investing in ULIPs is its tax saving abilities. You get tax benefits at the time of investment and at the time of maturity. The investments made in ULIPs are deductible from your taxable income under section 80C and your returns from ULIP investments are also exempted from tax as per Section 10(10D)
Available Online: ULIPs are available online as zero cost ULIPs because there is no distribution cost or commission other than fund management charges (FMC) and mortality charge as per the guidelines. As a millennial you are already internet savvy when it comes to fulfilling most of your tasks, so why not research on the new age ULIPs available online?
ULIPs are cost-efficient and easy to purchase. ULIPs are a preferred investment solution to millennials who have just started to consider investing and do not want to risk volatility of the market because of their low risk, easy switch and high return giving characteristics and easy switch options.
Amit then added, “So Sagar, when are you planning to start investing?”
Sagar smiled and replied, “Today, so that I don’t delay it any further!”