Imagine having the appetite to invest in the market for your long-term goals and, at the same time, wanting the financial security of your family by investing in a life cover. You don’t have to invest in two different plans anymore, as ULIP is the solution you’re looking for.
A Unit Linked Insurance Plan, also called ULIP, is a type of life insurance that helps you get the dual benefit of life cover that serves as financial protection for your family and a long-term investment plan. A ULIP plan allows you to invest in a life cover and make investments in equities or debts of your choice. How it works is that a part of your payment towards a ULIP plan will go toward life cover, and the other part of your payment will go toward the investment of your choice.
This is particularly beneficial for an investor who wants the security of a life cover and plans to invest to achieve long-term financial goals.
In this article, we will look at why ULIP is a great choice to achieve your long-term financial goals and get life cover.
Benefits of a ULIP Plan
Life Cover of Your Choice:
The most unique part of a ULIP plan is that you can choose which life cover you want to invest in.
You can compare various life covers that are available to check which is a better choice for you. Life cover can provide financial support to your family in your absence.
Investment of Your Choice:
Investments are of mainly three types, equities, debts, and a mixture of both, called balanced funds. Investing in equity funds means buying shares of a certain company. Investing in debt funds means investing in debt instruments. A balanced fund is where you can invest in both equity and debt funds.
A ULIP plan will help you invest in the funds of your choice. You can invest in equities, debts, or balanced funds. If you have a high-risk appetite, then you can invest in an equity fund. There is also an option of switching between funds.
Long-Term Planning:
A ULIP is created in a way that you can plan for your long-term goals, such as retirement or your children’s education. It provides both life cover and allows you to make investments in equity and debt funds, so you know your money can grow to help you meet your future goals.
Tax Benefits:
A ULIP plan also provides tax benefits. You can save up to Rs. 1.5 Lakh under Section 80C by investing in a ULIP.
Liquidity:
One of the benefits of a ULIP plan is its liquidity. A ULIP plan allows you to withdraw some money after the initial lock-in period of 5 years. Thus, you can withdraw money in case of any emergency.
But it is advised that you do not withdraw money unless it’s an emergency.
In conclusion, if you have the appetite to invest in the market for your long-term goals and, at the same time, want to provide financial security to your family, then opt for a ULIP plan.
