ULIP – Everything you need to know about ULIP

Most people in their late 20s want to invest their money to earn returns and improve their standard of living. In addition to that, they also want to secure the life of their loved ones by investing in Life Insurance plans which will safeguard the future of their family, in case of death or accidents. If you are one who is stuck on this crossroad, then ULIP is your safest bet. ULIP, which stands for Unit Linked Insurance Plan, is an insurance plan that can help you protect your family while also helping you in investing money.

ULIP is a wealth creation tool that offers life cover. In the case of ULIP, a certain part of your premium is invested in order to seek returns, and the residue goes towards covering your life. One must remember that the returns one gets from the ULIP are subject to fluctuations in the market. However, you have proper control over your funds, and you can switch your funds from equity to debt funds.

Benefits of ULIP

Just like other forms of life insurance, even ULIP offers a whole lot of benefits to the insured and their family, making it an idle choice for those who are very thoughtful of their future. Explained below are the benefits that you will get while buying your Unit Linked Insurance Plan.

Savings: This is perfect for those who have been having a hard time saving money. Though saving is hard, you know it is the right thing to do, and it can only be mastered by making it a habit. ULIP helps you achieve your financial goals through saving.

Investment: It is one of the safest forms of investment available in the market. A ULIP plan will generate money by investing some part of the premium, making it the right choice for investing your money. As mentioned earlier, It even lets switch between equity and mutual funds. What’s more, you can also invest more money into your already existing savings.

Life Coverage: ULIP is one wealth creation tool that also offers Life coverage. Apart from helping you save and invest money, it also extends its help by providing security to your loved ones in case of any death.

Tax Benefits: One of the major benefits that you get with ULIP policy is tax benefits. Unlike some tools of wealth creation, your ULIP plan qualifies for tax exemption. Under Section 80C, you get tax benefits upto Rs 1.5 Lakh on your premium. In addition to that, all the earnings from your ULIP plan are tax-free. Even the money you receive at the end of the policy is tax-free as per Section 10 (10D).

Things you need to do before you finalise your ULIP Plan

Research: First step is to do proper research before you settle on a ULIP plan. This helps you know each and every aspect of your insurance plan.

Analyse your needs: See what your needs are and prioritise them accordingly. If it is to get good returns, then you should invest in a ULIP plan that offers high-returns at high risk.

Competitors Analysis: With so many insurance companies in the market, you now have the luxury of choosing a better plan. So, jot down all the things you need from your ULIP plan and see which plan fits all your wants and requirements.

Fees & Charges: Depending up your insurer, a ULIP plan may have some fees associated with it. Some insurance companies even charge entry and exit fees, which should be considered before you opt for a plan.

The bottom line is that ULIP is one of the best insurance plans that you can buy in today’s time. With so many benefits, you just cannot go wrong with it. 

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Author: Eddy

Eddy is the editorial columnist in Business Fundas, and oversees partner relationships. He posts articles of partners on various topics related to strategy, marketing, supply chain, technology management, social media, e-business, finance, economics and operations management. The articles posted are copyrighted under a Creative Commons unported license 4.0. To contact him, please direct your emails to editor.webposts@gmail.com.