Are you scurrying around in order to save taxes? Or are you a last-minute tax planner? Whatever the case is, take a deep breath and relax. Because we’ve got you covered for a lifetime with the help of Unit Linked Insurance Plans (ULIP). A ULIP Plan is a perfect saving option for all the investors looking for a long term and tax-free investment.
The increasing need and popularity of ULIPs have made it all the more attractive to the majority of investors. Serving the best features like a lock-in period, better returns, combinations of protection and growth has made it a go-to option for every investor. So if you’re still searching for the answer ‘why should I invest in ULIP?’, keep reading to find the reason why:
Reasons to opt for ULIPs this season:
- Longer lock-in period
The longer the lock-in period, the larger is the accumulation of wealth. This holds true, especially, in terms of a ULIP Policy. ULIP with a lock-in period of five years makes sure that an investor follows a disciplined investment habit.
As ULIPs are long-term investment plans, it is advisable to make an investment in a single ULIP plan, at a time. This is because ULIP tax benefits can be availed per year until the end of the premium paying term (PPT). Besides, the premium can be paid in the form of installments or as a whole.
- Higher returns
If you’re looking forward to yielding higher returns from your investment, then make ULIPs your one-stop destination. This is simply because of its equity advantage that makes ULIPs garner higher return as compared to the rest.
A ULIP Policy invests all the premium paid by you in various asset classes through different funds. You can switch between them through the free fund-switching option to maximize returns as well as safeguard your investments.
- Dual benefits
A policy which is a combination of insurance and investment is a go-to for every investor. This dual benefit is provided by ULIP Plans only. It not only protects all your life goals but also lets you invest in equity markets.
Additionally, according to Section 80C of the Income Tax Act, 1961, ULIPs offer tax benefits up to 1.5 lacs.
- Top up investment
When you invest in a ULIP, you get to invest excess cash through top-ups. If the annual premium does not exceed 10% of the sum assured, only then the top-ups are eligible for deductions under Section 10(10D).
Under a top-up facility, you can also add surplus funds if you find out that the fund that you are invested is performing well. This will eventually leads to the higher ULIP returns.
As the pattern of investment keeps fluctuating, it is advisable for the investors to invest in a market-linked product like ULIP, that generates wealth in order to help you meet your long-term goals.
A ULIP Policy is a plan directly linked to the capital market. It offers flexibility to invest in either equity or debt fund as well as aggregates the best of investment. Being a market-linked vehicle, it appreciates with increasing share value.
So what are you waiting for then? Invest in a ULIP Plan and make it your go-to investment option this tax-saving season to maximize your gains.