How can ULIP increase your take-home salary

What is a ULIP?

A unit-linked insurance plan is among the better insurance products currently available in the market. A ULIP offers a policyholder life protection against future contingencies with the option to invest in different asset classes like equity, debt, and other money market instruments.

A portion of the premium which the policyholder pays is invested in funds of the policyholder’s choice. It allows a policyholder to financially protect his/her family against any unfortunate event and enjoy a return on his/her investments at the same time.

How can ULIP increase your take-home salary?

Investment cost

The best thing about a ULIP is that it allows policyholders to invest in different asset classes and earn a hefty periodic return on their investments. If not a ULIP, you will have to invest in two separate plans to get life protection and earn interest on your investments, which is very expensive.

A ULIP increase your take-home salary as you only have to invest in one plan to get benefits of two. You can use it as an insurance product and at the same time as a financial product to invest in the market. It reduces the overall cost of investment, and you don’t have to spend your savings towards two separate plans.

Return on investments

The ultimate goal of a financial plan is to provide a financially secure future for one’s family. And the best way by which this goal can be achieved is through the process of building wealth over time. While a traditional insurance plan provides a death benefit (lump sum amount) at the time of death, it doesn’t provide an option to build wealth through money market instruments.

When you invest in a ULIP, you are provided with various opportunities to build wealth as you earn a return on your investments, which adds to your take-home salary by a considerable margin. You can choose the funds in which you want to invest and earn profits depending on the market conditions. A ULIP also allows you to TOP-UP your plan, and you can pump the additional amount of money in the plan anytime you want.

As you can earn a huge return on your investments, a ULIP is the best option to consider if you want to increase your take-home salary.

Tax savings

Tax saving is the most crucial part of a sound financial plan. It increases savings and the overall profits. As long as the investment in insurance products is concerned, ULIPs are considered as one of the best tax savings instruments. Subject to certain restrictions, the premium paid towards a ULIP is tax deductible under section 80C of the Income Tax Act.

Apart from saving tax and increasing your salary, the amount of money paid at the time of maturity or death is fully exempted from tax. This makes a ULIP a perfect insurance product to save tax and increase your take-home salary and your overall savings.

Edelweiss Tokio Life provides ULIPs which are tailor-made to match your needs – looking to protect their lives against any unfortunate event and also create wealth in the process.

Chirag Iyer - BFSI Enthusiast

Chirag is a writer and an avid reader who loves to drink coffee! His other interests include boxing, karate, and singing.