What Is The Buzz About Ulip Policies?

Owning life insurance is more of a necessity than a luxury. It ensures that your family’s financial future is secure, regardless of the situations that they may encounter. As there are so many policies and investment schemes available in the market, it only makes sense to enroll in a reliable policy and avail the benefits offered by it.

Among the various types of policies available today, the ULIP policy is in a buzz these days. Unlike other policies that only offer monetary support to your family in the event of your death, the unit-linked insurance plans also offer you an opportunity to make financial investments in market-linked channels to gain higher returns on your investment.

That’s why they’re getting more and more popular with time. They offer combined benefits of life insurance and capital market investments, which allows you to make a comprehensive financial security plan for the betterment of your family’s future. The money you pay is invested in the market by professional fund managers who take gainful financial decisions on your behalf.

Why is ULIP The Best Investment Option These Days?

ULIP policy packs several exciting features that make it one of the most promising investment opportunities available in India. Here’s a list of benefits offered by ULIPs that make them one of the best investment options these days:

1. Combined Investment and Insurance Benefits

With the infused benefits of both insurance and investments, ULIPs are a perfect choice to ensure proper financial safeguard for you and your family. In case you pass away during the policy tenure, your chosen nominee will receive a death benefit to manage burial or funeral charges and bear daily expenses without depending on anyone.

Moreover, a specific part of your premiums is used to make investments in market-related instruments like debt and equity funds. Hence, you also gain returns at the time of your policy’s maturity. You can even switch the funds as per your requirements and accomplish all the goals and aspirations that require financial support in life.

2. Triple Tax Benefits

If you own a ULIP policy, you can enjoy tax benefits on three different aspects of the plan. This allows you to claim tax rebates during the investment, returns, and withdrawal phase of your unit-linked insurance policy. You can also enjoy tax deductions on yearly premiums paid for the benefits offered by the policy.

Additionally, after completing the specified lock-in period, you can also withdraw your funds along with the returns gained over time. Even the sum assured or maturity amount is exempted from any form of taxation. The maturity proceeds that you receive through the plan are also eligible for tax benefits as per the prevailing laws of the Income Tax Act of India.

3. Top-Up Benefits

With ULIP investments, you can also increase the value of your principal investment amount as per your financial preferences. These plans offer a top-up feature that allows you to invest additional money in your existing policy in exchange for additional premiums and enjoy returns on the cumulative principal amount afterward.

This proves to be very beneficial when your chosen funds are performing well. Whenever you detect good returns from your investment in ULIP plans, you can add a surplus amount of money in the existing value to enjoy even higher returns and grow your financial corpus to a great extent for a comfortable future.

4. Multiple Fund Options

ULIP policies allow you to invest your capital in several market-linked investment options like equity funds, debt funds, and hybrid funds as per your financial preferences and risk-bearing capacity. Moreover, it also allows you to switch between the various funds available at any point during the tenure of your policy.

This kind of flexibility is only available with unit-linked insurance plans. Moreover, you can also choose to make the partial or total movement of your capital from one fund to another for added convenience, that too without having to pay any additional charges. If you like to follow market trends, this feature can help you grow your capital to a great extent.

5. Made for Long-Term Investments

ULIP policies usually include a lock-in period that may range anywhere between three to five years. Moreover, you can also choose to extend or discontinue the policy once the lock-in period is finished. If you choose the latter, your accumulated corpus will be transferred to a discontinuance fund, which also consists of the returns gained through the investments.

Although you won’t be able to enjoy the liquidity of funds during the lock-in period, you can feel free to withdraw your money as per your will once the lock-in period expires. If you choose to withdraw money before your policy’s tenure, it will be provided after subtracting the applicable surrender fees relevant to the preferred policy.

6. Better Than Others

There’s a reason why ULIPs are considered better than other insurance plans available in India. They not only allow you to invest capital in several unique asset classes but also provide tax-saving benefits and higher returns on your investment by allowing you to shift between multiple funds, based on their performance.

Talking about other investment policies like endowment plans, they only tend to pay a fixed amount after a specific period. In the case of fixed deposits, you have to wait for at least five years to gain returns on your principal amount. Moreover, the latter doesn’t even provide tax benefits as ULIP does.

If you want to attain all-around financial security for your loved ones and fulfill all your dreams in life, make sure you consider investing in a ULIP plan as soon as possible. You can invest in the best ULIP plans available at very affordable rates and provide an unparalleled set of features for your financially bright future. Make sure you choose a good ULIP plan with your preferred fund options and a variety of portfolio management preferences.