ULIP plans are the modern-day optimised policy choice for insurance buyers. These plans aim at providing a comprehensive life insurance policy by considering uncertainties to life and other financial expenditures. A ULIP plan or a Unit Linked Insurance Plan divides the premium amount into two sectional categories. One is used as a fee for the assurance of life insurance cover, while the other half is invested into bonds and securities like equities. This ensures that apart from financial security on the death of the policyholder, ULIP funds also generate steady income for financing different life expenditures.
Let’s understand how you can keep yourself protected and invested in a ULIP plan.
Ways to Stay Protected and Invested with ULIPs
Here is how to keep yourself protected and invested with UILPs:
Additional Value Intact
Unlike a general life insurance policy cover, ULIP plans have an additive value for the buyer. These plans are linked to market performances and deliver the suitable returns depending on the choice of fund and growth. This makes ULIP a comprehensive life insurance policy as compared to others. There are several policies that give a promising return to the policyholders as well as additional benefits.
For example, the Param Rakshak Plus policy by Tata AIA life insurance policy offers various benefits for the policyholder.
Developing one’s Own Investing Strategy
ULIP investment is a long-term affair and has unique values attached for different kinds of users. Depending upon the risk aversion a user can plan his entire investment. One may gain market knowledge to purchase funds of their choice based on their individual need for returns and financing expenditures.
Tax Benefits under ULIP Policy
Buyers are generally concerned about the final value of the fund they are entitled to,after the reduction of taxes and other charges. With a ULIP plan policyholder enjoys ULIP tax benefits for the payment of premiums under Section 80C of the Income Tax Act, 1961. Timely ULIP renewals also ensure that users get tax benefits for the given year. The per-year premium paid is deductible from the year’s total income of the buyer.
Option to Switch Funds
ULIP plans come with the option to shuffle funds as per the buyers’ needs and wants. A given policyholder has the right to select a different fund, say from debt to an equity-based one on his anticipation of market returns. This feature ensures that no restrictions are imposed on the amount of gain one can make out of a ULIP plan.
Partial Withdrawals Allowed
A ULIP plan has the facility of partial withdrawal, which allows users to withdraw from their fund value in case of an urgent financial requirement. This, however, is subjected to the condition that the policy at least completes the lock-in period of 5 years which is a very short temporal constraint.
ULIP policies are the best choice for anyone seeking to live a financially secure life with their family. Although a stock of money gets blocked with the continuance of a ULIP policy over time, this doesn’t mean that the user is at a loss. ULIP plans are known for long-term capital gains due to long-term market stability. Policyholders, therefore, must have an idea of the countless benefits of a ULIP fund while keeping themselves protected and invested for a longer period in future.