Why should you choose ULIPs as an Investment Option?

Why should you choose ULIPs as an Investment Option?

How much you choose to grow your wealth and what efforts you take to do so has an important role in your overall financial condition. Over the years, one of the most effective ways to generate wealth has been equity investments. With so many investment sources available, it is easy to initially make mistakes out of confusion. However, after some experience and some assistance, you can get some considerable profits in a decent amount of time. 

Now, while you are busy making efforts to generate wealth over the years, you also need to ensure that your family has enough financial protection. You have to take measures that guarantee that they will be financially secure even in the worst of times. At this point, you might think that the wealth you will be collecting may be enough for all their needs. But there is a lot of uncertainty in that idea. In such a situation, the safest option you have is insurance. However, spending on insurance and wealth generation can be too much expense. Hence, your best option is a ULIP plan.

ULIP plans offer you financial security and almost constant returns. These plans can transform your financial condition by a large margin while offering you the right amount of financial protection. Here are few reasons you should invest in ULIPs:

  • Combined benefit 

ULIPs offer you the combined benefit of investment and insurance. ULIP provides a wealth creation opportunity and life insurance cover. These funds grow at a steady rate and earn your profits. With these dual benefits, any aspiring investor can look to ULIPs for starting off. 

  • Flexible premium payment 

Many benefits come with buying a ULIP plan. One of the best ones that a policyholder gets is that of flexible premium payment. To know the premium to be paid, you can use a ULIP plan calculator. A policyholder can select their premium payment frequency themselves. This includes yearly, half-yearly and monthly options. Moreover, the rupee cost averaging principle applies to the annual premium of a ULIP. 

  • Switching funds

ULIPs offer you a great deal of transparency and flexibility. This means you know what you are getting into and how it seems to be working. Hence, you can make changes to your investments as you see fit. One of those changes is changing between ULIP funds. This way, you can switch to a fund that you feel would give you higher returns. However, you should note that most insurance providers only allow a fixed number of switches free each year.

  • Smaller investments 

When you have to invest a small amount at a single time, the investment does not affect your way of living much. ULIP premiums are usually taken in small amounts over a long period of time. As a result, an investor can be regular with their investments. Due to the smaller amount of a single payment, you are most likely to never miss a payment. Moreover, if you invest regularly and keep the amount invested for a long time, you could have substantial returns. 

  • Tax Benefits

Taxes are always something that you wish you could save money on. But to do it well you have to do it right. One of the most common tools used by people to save tax is insurance. With a ULIP policy, you can get tax benefits through Section 80C & 10(10D) of the Income Tax Act. As per Section 80C, you can get a deduction of up to ₹ 1,50,000 for a financial year. As per Section 10(10D), the maturity amount you would receive from the policy would be exempt from income tax. 

These are just some of the benefits that you can avail if you choose to invest in ULIPs. However, money is a very important part of life. Hence, you should be extremely sure that ULIPs are the way for you to go. If they are, buy a ULIP at the earliest and you will be in for a long time of great returns. 

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