Europe Wsj
  • Automotive
  • Business
    • Advertising
    • Marketing
    • News
  • Education
  • Finance
  • Health
  • Home
  • Real Estate
  • Shopping
  • Tech
    • Software
    • Web Service
  • Travel
Close
Europe Wsj
Close
  • Automotive
  • Business
    • Advertising
    • Marketing
    • News
  • Education
  • Finance
  • Health
  • Home
  • Real Estate
  • Shopping
  • Tech
    • Software
    • Web Service
  • Travel
How ULIPs Work and Things to Know Before Investing in One
Share:
Finance August 31, 2020 Tia Arlo

How ULIPs Work and Things to Know Before Investing in One

A life insurance policy is an essential investment option for every household. If you have dependent loved ones, you certainly want to secure their financial future for uncertain times. However, you also want added benefits from your investment, and this is where Unit-Linked Insurance Plans (ULIPs) can help. Read on to know what is ULIP plan and how it can help.

How do ULIPs work?

The best aspect of a ULIP is that the insurance policy offers monetary benefits to your nominees, and it builds wealth as well. These two ULIP benefits put this life policy ahead of most other insurance options.

Another thing that makes ULIP a great investment option is its flexibility. When you buy the plan, you can decide how the money is divided between debt and equity investment funds. You can even choose a balanced option if that seems more profitable. Depending on the type of instrument to invest in, experienced fund managers handle the money. The top-performing ULIP funds always make sure that you receive the best possible returns from your investment to help you earn a substantial fortune. You can even change your investment plan between equity and debt anytime during the tenure of the ULIP. This helps you manage your investment strategy depending on your changing financial goals, risk appetite, and the market situation.

Advantages of ULIPs

ULIP has three main benefits:

  • Life insurance

ULIP is essentially a life insurance policy. It provides financial cover to the nominees of the policyholder in case of an unfortunate event. If you have loved ones, who depend on you financially, you must secure their future monetary needs in your absence. The life insurance policy component of ULIP offers that benefit.

  • Wealth build-up

As you age, your financial goals keep changing. Saving for the future is important to ensure that you have enough money to fulfill essential requirements like your child’s education, wedding, or a comfortable retired life for you. The top performing ULIP funds come with the option to build a considerable fortune, as you can invest in debt and equity instruments through them. ULIP is a great long-term investment option that creates your wealth with compounding returns. The Insurance Regulatory and Development Authority of India (IRDAI) makes it mandatory for ULIPs to have a five-year lock-in period, making it an investment option for a long duration by default.

  • Tax benefit

Apart from the life insurance benefit and wealth build-up, you can avail of income tax deductions by investing in a ULIP. Section 80C of the Income Tax Act, 1961 allows an annual deduction of up to INR 1.5 lakh on the premium paid towards ULIP. Additionally, Section 10(10D) makes the maturity benefit from ULIP tax-free.

Things one should know before investing in ULIP

You should learn a few aspectsof ULIP before investing in it:

  • It offers a certain amount of coverage to your nominees in your absence. This amount will be either the sum assured decided at the time of policy initiation, or the value of the fund on the day of the pay-out, or 105% of the premiums you paid;this can vary among insurers

  • It has a lock-in period of five years, which is the minimum policy term

  • It allows partial withdrawal after the lock-in period

  • It can be discontinued after five years, but you can revive the plan within two years from then

All these ULIP benefits make this life policy a profitable investment option if you wish to secure your family’s financial future and create a substantial corpus.

Previous post Why Is Entrepreneurship Not Just For Youngsters?
Why Is Entrepreneurship Not Just For Youngsters?
Next post
Mindset – What is Yours?

Related Posts

Why are ETFs a better investment than single stocks?
Share:
Finance

Why are ETFs a better investment than single stocks?

April 26, 2022 Tia Arlo
When it comes to investing, people can use many different strategies to try and grow their money. One popular option is to invest in stocks....
The Benefits Of Investing In Property Using a SMSF Loan.
Share:
Finance

The Benefits Of Investing In Property Using a SMSF Loan.

September 18, 2020 Tia Arlo
It is important that you are in total control of your investments, and you should always try to take a hands-on approach when it comes to your...

Recent Posts

  • Have you been exposed to Asbestos?
    March 21, 2023
    Have you been exposed to Asbestos?
    Business
  • March 20, 2023
    From Sketches to Ink: How to Choose a Tattoo Parlor that Matches Your Style and Personality
    News

Recent Posts

  • Have you been exposed to Asbestos?
  • From Sketches to Ink: How to Choose a Tattoo Parlor that Matches Your Style and Personality
  • Jilibet Casino: A Place to Play and Win Big Every Day
  • Differences between PCNL and Other Kidney Stone Removal Techniques
  • 5 Top Attractions in Sapphire Coast
  • 5 Reasons Why Mobile Users Love Airtel
    March 22, 2021
    5 Reasons Why Mobile Users Love Airtel
    Tech
  • The Pros and Cons of Becoming a Vet Tech
    August 11, 2019
    The Pros and Cons of Becoming a Vet Tech
    Tech
  • Tech Gadgets Keep You on the Top of the World
    August 29, 2019
    Tech Gadgets Keep You on the Top of the World
    Tech
  • Programming Guide: Some Tips About Software
    July 30, 2019
    Programming Guide: Some Tips About Software
    Software

Categories

  • Advertising
  • Automotive
  • Business
  • Education
  • Entertainment
  • Finance
  • Gambling
  • Health
  • Home
  • Marketing
  • News
  • Real Estate
  • Shopping
  • Software
  • Tech
  • Travel
  • Web Service

Archives

  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019

Categories

  • How ULIPs Work and Things to Know Before Investing in One
    advertising
    5 Posts
  • How ULIPs Work and Things to Know Before Investing in One
    automotive
    3 Posts
  • How ULIPs Work and Things to Know Before Investing in One
    business
    36 Posts
  • education
    2 Posts
Close
Do not miss
Instructions to Boost Your Business With the Right Kind of Digital Marketing
Instructions to Boost Your Business With the Right Kind of Digital Marketing
June 29, 2019
Private venture Marketing Strategies
Private venture Marketing Strategies
June 24, 2019
Direct Marketing Automation – Your Most Reliable Marketing Strategist
Direct Marketing Automation – Your Most Reliable Marketing Strategist
June 24, 2019
Web Marketing Tips – Best Internet Marketing Tools
Web Marketing Tips – Best Internet Marketing Tools
June 20, 2019
Web Marketing and Its Evolution
Web Marketing and Its Evolution
June 20, 2019
Understanding Effectiveness of Inbound Marketing
Understanding Effectiveness of Inbound Marketing
June 12, 2019
Techniques of Digital Marketing and Content Marketing
Techniques of Digital Marketing and Content Marketing
June 5, 2019
Content Marketing and the Importance of a Content Marketing Strategy
Content Marketing and the Importance of a Content Marketing Strategy
March 11, 2019
Copyright © 2021 Europe Wsj