Here’s why a ULIP should be part of your best investment plan

Creating an investment plan is of utmost importance. It enables you to save & grow your money to meet your long-term financial goals & needs. Whether it’s saving for a comfortable life post retirement, growing your money to meet your child’s needs or to start a business in your later years, an investment plan gives wings to all these dreams.

And though there are many investment instruments available in the market today, this article will tell you why a Ulip is a must add to your best investment plan.

Firstly It Gives You Two Benefits In One.

Ulip is short for ‘Unit Linked Insurance Policy/ Plan’. This means, unlike most other investment instruments, a ULIP provides you dual benefits. This means that, along with an investment plan, you get a life insurance cover that safeguards the financial wellbeing of your loved ones, even in your absence.

It Adds Flexibility To Your Best Investment Plan.

An investment plan should be able to cater your specific needs, income, risk appetite & other savings instruments. A ULIP offers the flexibility you need and allows you to invest in market-linked portfolios according to your requirements.

It allows you to choose from a range of premium paying options such as monthly, quarterly, half-yearly and yearly; you can choose a payment method based on your income. Further, an investment plan should complement your already existing savings instruments.

For example, if you’ve invested in conservative or safe plans such as fixed deposits, government bonds, etc. you can opt to have your money invested in high-risk, high-reward equity based portfolios. Conversely, if you already have aggressive investments, then you opt for safer debt-linked portfolios and have your money grow a safe yet respectable rate of returns.

Withdrawal Options:

A ULIP also allows you to get access to your money at predefined intervals. This allows you access to funds in emergency situations & gives you peace of mind that you have funds that you can utilize through life’s twists & turns.

You Can Even Avail Loyalty Benefits.

Some ULIPs allocate Loyalty Additions, which is a percentage of one Annualized Premium, to the Regular Premium Fund Value every five years. For example, at the end of the 10th year of your plan, you will receive 15% of your annualized premium as a loyalty benefit. This percentage only increases every 5 years, with some ULIPs offering as much as 30% of the annualized premium as loyalty benefits at the end of the 25th year.

Ulips Also Give You Fund Boosters.

There quite a few ULIP that also boost the value of your fund. These fund boosters add a percentage of your annualized premium to the Regular Premium Fund Value at maturity. Some plans offer additions as high as 90% at the end of the 15th year of your tenure.

ULIPs add tax benefits to your best investment plan.

ULIPs fall under the ‘E-E-E’ or Exempt-Exempt-Exempt tax savings bracket. This is because the premiums invested into a ULIP allow you tax deductions as high as Rs. 1, 50,000 every year under section 80C of the Indian Income Tax Act, 1961. Further, the returns earned and the maturity or death benefits are also exempt from taxation under 10 (10D)

These were just a few reasons why a ULIP deserves a spot on your Best Investment Plan.

Do consult a financial expert or talk to one of the joint home loan providers to get a better picture of how such a plan can help you with your financial goals.