ULIP or unit-linked insurance plans are insurance products which give the policyholder the option to invest along with getting insured. A percentage of the premium which the policyholder pays is utilized towards the insurance, and the rest is invested in the funds of choice of the policyholder. This gives the policyholder the added benefit of return on investment along with a traditional insurance policy in just one plan.
The new generation ULIPs
As the internet and digital era is at its peak, it has allowed the ULIPs to evolve according to the new generation. Thanks to these new generation ULIPs, the insurance companies are now able to sell insurance plans directly to the customers. This has helped in bringing down the cost of the middleman and has directly rewarded the customers by lowering the effective cost of these plans.
You can now buy a ULIP directly from the websites of the insurance companies which can be compared online with each other to find the best among all. Some new generation ULIPs have a lower cost than many mutual funds. This makes them the perfect product to invest in, and you are also provided a life cover which you can’t get under any mutual fund scheme.
As the new generation ULIPs have a longer lock-in period of 5 years, funds managers have more time, and the returns are always higher when the ULIPs are considered with a long-term view. In addition to this, many good online insurance companies provide risk cover for your ULIP plan. Like the Wealth accumulation accelerated cover (WAAC) by Edelweiss Tokio which has been rated five stars by Morning Star.
Why invest in the new generation ULIP
Certain things make the new generation ULIP a perfect insurance product:
- Higher returns: Over a long period, getting 15 to 20% return is possible.
- Switching facility: A policyholder can switch between funds of his/her choice
- Easy liquidity: The policyholder has the option to surrender the policy after the lock-in period of 5 years.
- Insurance cover: The sum assured is a minimum of 10 times of the annual premium paid by the policyholder which can be increased anytime.
Edelweiss Tokio Life’s ULIPs have constantly been rated five stars by many websites as it provides one of the best Unit linked investment plans in the market. You are provided with the facility of customizing the policy by adding different riders, some of which are the Accidental total and permanent disability, Accidental death benefit, critical illness, etc.
Apart from the riders, you also get Tax benefits under section 80C and 10(10D).