#GameofLifeGoals: How ULIP helps?
Unit linked insurance plan offers investors the dual benefit of investment and life protection. The insurer invests a part of the premium paid towards ULIP insurance in the money market, earning you the profits of volatile market conditions.
Though anyone can make ULIP investment, these schemes get higher returns if you stay invested for the long term. ULIPs are ideal for people having long-term goals such as kid’s higher education abroad, creating business capital or saving for retirement.
Here are the three significant ULIP benefits that help you create the corpus to meet your financial goals.
1. Flexibility to switch funds:
The significant benefit of ULIP investment is the flexibility of changing funds during its tenure. Depending on your risk appetite and investment goals, you can choose from other well-performing fund types such as large-cap equity funds, balanced funds, growth funds, and income funds.
To switch funds, all you need to do is choose the right policy and change the fund allocation and continue with your new funds until the term-end. Switching funds of your ULIP policy is hassle-free and serves investors well getting out of the underperforming funds.
2. Dual benefits:
Along with providing life protection to your loved ones, ULIP investment is an excellent way of saving tax. Under the Income Tax Act 1961, Section 80C, you can invest in the ULIP plan to save tax up to Rs. 1.5 lakhs.
Moreover, the returns upon maturity are also exempted from tax under section 10 (10D). It’s a dual-income that ULIP offers with tax-saving and helping you earn high returns from market-linked investments.
3. Safer for first-time investors:
First-time investors are often overwhelmed by the vast investment options available in the market. Unlike other investment funds, ULIPs are more reliable and ideal for first-time investors. Depending on your risk appetite and investment goals, you can choose from the minimal to high-risk plans.
Moreover, the funds are managed by expert managers, so you don’t have to worry about keeping rigorous market updates. ULIP policy is one of the investment options that offer decent returns along with various renewal options that help you create wealth over time.
Overall, ULIP investment is ideal for first-time investors or people looking for long-term investment. However, you should seek a financial expert to help you select the high-performing ULIP plan to save tax and gain higher returns on your investment.
