A Unit Linked Insurance Plan (ULIP) is the savvy combination of insurance and a financial plan which provides you with death or maturity benefit with the bonus of investing a portion of your premium in market-linked funds. Amongst the numerous investment products, it is considered one of the best products for the smart investor since it has multiple benefits that increase your wealth potential.
As an investor, you are used to investment pitches that give you jargon instead of telling you how ULIPs will help you bring more wealth. Here are some important reasons to add ULIPs to your portfolio.
ULIP works for you
If you have financial dependents, they need protection against any eventuality. It is essential to be realistic and understand that any problem for you will result in the financial burden of your family. A ULIP plan can provide for your family with the needed financial assistance in the form of the death benefit in your absence. If you can see the plan mature, you are still provided with the sum assured in the way of maturity benefit. Hence, whatever the outcome, ULIP will always work to your advantage.
ULIP is an excellent tax saver
One of the best things about a ULIP is its ability to function as a tax-saver. As ULIP’s are still considered as an insurance plan, hence it is the only market linked product for which you don’t have to pay the newly introduced LTCG tax of 10%. Aside from this, a ULIP allows you to save tax under section 80C, and 10(10D) all of this will deal with your growth in the long run.
ULIPs give you higher returns
With one of the lowest lock-in period of 3 years, a ULIP can provide you higher returns than any other investment products in the current market. Over the last five years, some of the top ULIPs have provided a compounded annual return of 18%, which is higher than the returns provided by FDs, ELSS or even most mutual funds. As they are linked to the market, the sky is the limit for your investments.
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ULIPs work well with the trends
Being the only market linked investment product without any added tax liability, ULIPs have become the foremost choice of investors wanting to earn returns on their investment. As they also provide a life cover, you get dual benefits under a single plan. With the new age ULIPs, the costs attached have come down by a vast margin making ULIPs highly affordable when compared to other investment products.
ULIPs help you in making smart choices
When you invest in a ULIP, you have the option to choose the funds of your choice between equity or debt funds. You also have the decision to switch from one fund to other anytime you want. Whatever decisions you make with your ULIP plan, it has the potential to make them the most favorable choice for you. Investing in ULIP is quick, easy and the smartest thing you can do for your portfolio.
For working towards a better future and working towards wealth in the long-term, browse through the extensive list of ULIPs at Edelweiss Tokio Life.