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What is ULIP?

ULIP stands for unit linked insurance plans. ULIP is a combination of insurance and investment. From a ULIP, the goal is to provide wealth creation along with life cover where the insurance company puts a portion of your investment towards life insurance and rest into a fund that is based on equity or debt or both and matches with your long-term goals. These goals could be retirement planning, children’s education or another important event you may wish to save for. Here policyholder can pay a premium monthly or annually. A small amount of the premium goes to secure life insurance and rest of the money is invested just like a mutual fund does. Policyholder goes on investing through the term of the policy – 5,10 or 15 years and accumulates the units. ULIP offers investors options that invest in equity and debt.

Importance of ULIP

Life cover

Unit Linked plans provide life cover additionally to high returns with a sum assured just in case of loss of lifetime of the policyholder.

Finance future funds

The longer you invest in ULIPs the higher the return you'll expect, hence funding you on long terms. it's greater rewards than other insurances.

Liquidity once you need it

The ULIPs provide options of partial withdrawal when and the way ever needed.

Disciplined and regular savings

The ULIPs are invested over a good range of funds, which may be altered as per the appetite of risk and return of the policy holder.

How Can You Save Tax By Investing In A ULIP?

1.Tax Benefits under Section 80C

The amount invested in a ulip is eligible for a deduction under Section 80C. The maximum amount that is eligible for the deduction is Rs.1, 50, 000

2. Tax Benefits under Section 10(10D)

The maturity amount in a unit linked insurance plan (ULIP) is fully excluded from Income Tax under Section 10(10D). When the premium paid is more than 10% of the sum assured for policy issued after 1st April 2012 or more than 20% for policies issued prior to 1 April 2012, the maturity amount received from ULIP policy is fully taxable.

Why you should invest in ULIPs?

Life cover

Life cover

First and foremost, with ULIPs you get a life cover coupled with investment. It offers security that a investors family can fall back on in case of emergencies like the untimely death of the investor etc.
Income tax benefits

Income tax benefits

Premium paid towards a ULIP is eligible for a tax deduction under Section 80C. Additionally, the returns out of the policy on maturity are exempt from income tax under Section 10(10D) of the Income-tax Act. This is a dual benefit that you can claim with this policy.
Finance Long Term Goals

Finance Long Term Goals

If you have long-term goals like buying a house, a new car, marriage, etc., then ULIP is a good investment option because the money gets compounded. As a result, the net returns are generally more.) This stands true even if you want to exit after the 5 year lock-in period in comparison to not having invested the amount at all and retaining it in a savings account or in the form of an FD.
The flexibility of a portfolio switch

The flexibility of a portfolio switch

As already mentioned, ULIPS are usually designed in a way that they allow you to switch your portfolio between debt and equity based on your risk appetite as well as your knowledge of how the market is performing. Insurance companies, on the other hand, allow a very few numbers of switches free of cost.

Low charges

Low charges

ULIPs come with very low alocation charges. As per IRDA the annual charges applicable to ULIP plans range between 2-2.5% pa for first 10 yrs.
Low charges

Savings & Investments

ULIPs give you the advantage of switching between funds depending upon their performance. This helps you to get a better maturity benefits on your invested amount by monitoring the growth..
Low charges

Covid-19 Covers

Ensuring financial protection to your family in case of your covid.
Low charges

Family’s Protection

ULIP is a life insurance plus investment plan that offers a life cover to the policyholder. In case of an unfortunate death, the dependant family of the policyholder will still be financially secured.
Low charges

Saving for Future Goals

When it comes to fulfilling future goals such as buying a new home, child’s education, retirement planning etc., savings are a must. Without long term savings plans, ... it is difficult to balance short term needs and future goals. ULIPs help you save systematically and help you plan for these future goals. Read more

Two Main Reasons Why Should You Invest In An ULIP Early On

The Power Of Compounding

The biggest Benifit of starting early is the power of compunding which provides the foundation for time value for money. Even if you invest small amount for several years consistently, it will grow into a large corpus.

Balance Investment Portfolio

Investing with ULIP offers a balanced investment porfolio wgich means that you get a mix financial plans that can fulfil the future needs.This attemps to balance risk versusrewards by adjusting and rebalancing assets in an investment porfolio.

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