Wealth creation is not just about investing. It is also about securing the financial needs of your loved ones at different stages in life, even in your absence! ULIP plan, referred to as the Unit Linked Insurance Plan, is a complete solution in this regard.
ULIP Policy provides the right balance between insurance and investment. Let us explore the features to understand how.
- Extensive Life Cover to Secure You and Your Family: One portion of the premium amount paid towards the ULIP plan provides life cover, which is the sum assured for your nominee in case of your unexpected demise. ULIP insurance can be extended to provide life cover for your spouse and children as well.
- Market-linked Investments for Wealth Generation: The other portion is invested in the security markets for market-linked returns. ULIP investment is either made in equity funds, debt funds or hybrid funds.
- Flexibility of Investments as per Risk Appetite: Based on the risk appetite, you can invest in the funds. If you are risk-averse, you can invest in equity funds. For low and moderate risk appetite, invest in debt and hybrid funds, respectively. The best ULIP plan for you will be based on your choice of risk tolerance level.
- Ability to Switch Funds to Maximize Returns: Best ULIP plans are known for providing diverse investment fund options. You can switch between the funds as and when the time demands. ULIP becomes a good investment if you make the switch at the right time. Returns from ULIP will be calculated and based on the returns like any other securities instrument.
- Long-term Investments with a Lock-in Period: There is a five-year lock-in period for the ULIP policy. Partial withdrawal is permissible after that, which can help you fund certain short and long-term financial goals. Thus, ULIP benefits can be associated with long term goals.
- Transparency of ULIP Charges and Fees: ULIP charges in India are slightly higher owing to policy administration and fund management operations. However, it is certainly in tune with the investment made and clearly laid out in your policy document. Also, many insurance providers offer a refund or cancellation of these charges. So, make sure to check the ULIP charges before proceeding with the purchase.
- Attractive Tax Benefits on Premiums, Life Cover and Maturity Benefits: The premium paid towards ULIP plans and the returns for the investment qualifies for a tax deduction and tax exemption under Section 80C and Section 10(10D) of the Income Tax Act, 1961, respectively.
ULIP plan is considered a comprehensive plan for insurance and investment needs. Edelweiss Tokio ULIP plans provide seven different funds. You can opt to manage the funds from your end or let the team manage them for you. You can start investing in the plan with a fixed small amount regularly. It is devised to provide a complete solution for your financial independence. Ensure to invest and insure for a secure living!
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Neha Panchal - Financial Content Writer
Neha used to be an Engineer by Profession and Writer by passion, which is until she started pursuing full-time writing. She's presently working as a Financial Content Writer, with a keen interest in all things related to the Insurance Sector.