A ULIP, also known as Unit Linked Investment Plan, provides you with a life cover security along with the chance of creating wealth. It offers multiple benefits to the customers and is versatile. Investing in a ULIP can be beneficial as it is a hybrid investment that plays a significant role in creating financial security. Being a ULIP investment policyholder, you are also free to invest in other instruments like mutual funds, bonds, and stocks. A ULIP is an investment plan used to achieve long-term financial goals such as investment planning, tax planning, retirement planning, child’s future planning, insurance planning, etc.
Benefits of ULIP Investment Plan
- Freedom to choose the investment: There are primarily two main types of funds- Debt funds and Equity funds. A mixture of both funds is said to be balanced funds. Debt funds are responsible for investing in the debt instrument whereas, in equity shares, the investment takes place such as buying shares of the company. ULIP provides you with the freedom to invest in different funds as per your risk appetite or the investment goal.
- Market-Linked-Returns: ULIP plans give you the advantage of market investment with low risk. Being a ULIP policyholder, you stand a chance to choose between different types of investment funds as per your investment goals and risk appetite.
- Transparent structure: In terms of the investment portfolio and charges involved, ULIP plans have always been transparent. They offer not only the benefits of premium but also the policy tenure
- Investment with life protection: Along with the market-linked investment, you get a chance to enjoy the dual benefit of life insurance. You can also maximize your wealth and gain higher ULIP returns apart from securing the future of your loved ones.
- Liquidity: You may receive many benefits, but you can also withdraw a partial amount of money invested in the policy efficiently without any added cost. The option helps you take care of the immediate expenses like the examination fee of schools and colleges, emergency payments, family vacation, etc.
- Low risk: Unlike the other plans which are connected to the markets, the ULIP provides a lower proportion of risk. The annual returns are dependent on the investment made in the ULIP policy. Also, you receive the tax benefits based on Section 80C for paid premiums of the ULIP plan.
- Financial Security post-retirement: Everyone wants a secured future, for which they invest in various schemes and plans. Without straining the current budget, the ULIP plans help in providing the after retirement benefits. Also, by investing a small amount of premium, you can quickly build up a substantial corpus for your retirement.
Conclusion
After having all the basic information about the ULIP plans, you could be at a place to make a confident investment decision. The ULIP plans can be the best investment plan if you are willing to save for the child’s education, retirement or wanting to receive great returns.