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The full form of ULIP plans are the Unit Linked Insurance Plan. A ULIP is an insurance plan that proposes the dual benefit of investment to fulfill your long-term goals and a life cover to financially protect your family in an unfortunate event. The premium paid towards a ULIP is divided into two parts.
A part of it is contributed to your life cover, and the remaining is invested in the fund of your choice. You can choose to invest in equity, debt, or a combination of both funds as per your risk appetite in addition to goals. This makes ULIPs an ideal investment option for you, in addition to your family’s long-term goals. So, in this article, we will talk about ULIP insurance.
How does a ULIP work?
Let’s consider the example of Amit, who procured a ULIP at the age of 30 with a 30-year tenure.
Amit’s premium payments are billed towards a life cover/ of ₹ 1 crore. Additionally, he chooses to invest in equity funds through his ULIP.
What are the benefits of investing in a ULIP Plan?
Below are some benefits of capitalizing in a ULIP:
- Dual benefits of insurance and investment
- Flexibility
- Liquidity
- Goal-based planning
Tax* benefits
Dual benefits of insurance and investment: A linked insurance plan offers the dual advantages of insurance and investment in a single plan. You pay a unified premium and gain access to both life insurance coverage and investment opportunities. This streamlines your financial planning as you do not need to juggle separate insurance and investment policies. Instead, you can enjoy the benefits of both under one plan.
Why invest in ULIPs?
ULIP is a life insurance plan that offers the dual profit of investment to fulfill your long-term goals and a life cover to financially secure your loved ones in case of an unfortunate event. The returns from ULIPs are market-linked. With the right plan and asset strategy, you can earn better returns on your investments.
Rahul Khanna
