How ULIPs Provide Low-Cost Financial Protection For Your Loved Ones
Posted: Oct 26, 2019
Don’t we all wish to provide our families with a comfortable life? Being the top priority of our lives, we put in years of hard work to ensure that our loved ones are protected from every uncertainty. However, there are times our hard-earned savings isn’t enough to secure the future of our loved ones. And that’s when a Unit Linked Insurance Plan (ULIP) comes into the picture. With a ULIP Plan, you can build a long-term fund to accomplish the life goals of your loved ones.
Before purchasing a ULIP Policy, it is essential to understand what it is and how it works. In case you’re wondering what a ULIP is, let’s begin by understanding the definition:
A ULIP Policy is a combination of insurance and investment in a single product. It not only protects your family from any financial setback like your demise, but also ensures your participation in the equity markets. A dual benefit product like a ULIP plan will help you and your family to meet several life goals without worrying about inadequate resources.
As a policyholder, you get to enjoy the benefits of a ULIP Policy to the fullest. Moreover, these benefits are also extended to your loved ones in times of need. Here’s a closer look at how ULIPs provide low-cost financial protection to your dear ones:
1. Uses your savings to generate wealth
Savings are a crucial part of our lives. Since many people strongly believe in their savings habit, they tend to give the benefits of investments a miss. When you keep a specific amount aside in your bank lockers, it stays there for a long time without being used. However, if you utilize your savings in an investment vehicle, the chances of the growth of funds are comparatively higher.
2. Secures the financial needs of your family
The biggest advantage of a ULIP Policy is the provision of life coverage. Under a ULIP Policy, you will receive a life cover to help you deal with financial contingencies. For instance, if you’re caught in an unfortunate event, the life coverage amount will act as financial support to meet the needs and requirements of your loved ones in your absence. This way, your family wouldn’t have to depend on anybody to accomplish their financial goals without your presence.
3. Accomplishes the goals of your loved ones
It is a market-linked product, which provides ULIP returns based on market performance. Moreover, the policy offers additional boosters, which help in the protection of your family’s future. Therefore, when you’re not around to protect your family, a ULIP policy will do its job effectively and allow them to accomplish their life goals. In simple terms, a ULIP plan lets your family work towards the goal and achieve it accordingly.
4. Reduces your investment risks
When you invest in a ULIP policy, you can select from equity funds and debt funds. The selection between the funds can be made based on your risk appetite. For instance, if you’re a high-risk taker, then invest in equity funds. A risk-averse investor should invest in debt funds. While equity funds garner high returns, the debt funds yield low returns.
In a nutshell, a ULIP is increasingly becoming the preferred investment option for many individuals looking for a product that covers both their needs of investments and insurance. You should also see to it that you start planning for investments at an early age. The earlier you start planning, the earlier your goals can be achieved. Moreover, the higher will be your accumulation of funds.
A mother of 2 lovely kids. Digital Marketer by profession and a blogger by passion! Here to inspire and motivate people with my writing.