Investments are no longer just about saving for a rainy day. People invest in getting the best possible returns on their investments to achieve their life goals and aspirations. Over the last few years, Unit-Linked Insurance Programs have emerged as a preferred choice of investment. The program meets the dual purpose of providing life cover along with returns from investment to fulfill financial goals. Also, unit-linked programs offer tax benefits.
What is ULIP?
Unite Linked Insurance Plan (ULIP) is a product offered by insurance companies that give investors both insurance and investment under a single integrated plan, unlike a pure insurance policy.
So before you decide to invest in ULIPs, it is essential to be clear about the many advantages that policyholders or investors can derive through ULIPs.
Benefits of ULIPs & 4 Good Reasons to Invest in it
Below are some of the benefits offered by Unit Linked Insurance Policies (ULIPs) –
- Offer flexibility
- Offer transparency
- Encourage goal-based savings
3 Reasons You Should Invest in ULIPs –
ULIPs Offer Flexibility
- Flexibility to choose your fund option: Most insurance plans come with a range of equity, debt, and balanced fund options to choose from. As a result, you can invest your money as per your financial needs and risk appetite. They also allow you to move your money between different funds to help you earn maximum returns.
- Flexibility to change your life cover: You’ll have the flexibility to choose your ‘Sum Assured’ at the beginning of your policy. Moreover, some insurance plans also allow you to increase your Sum Assured over the term of your plan to cover your protection needs at different stages in your life.
- Flexibility to change your premium amount: Insurance programs allow you to pay a top-up amount, over and above your existing premium. You can use this option to increase the returns from your investment.
- Flexibility to opt for a rider: Riders are optional features you can choose to customize your ULIPs and get additional protection. One of the commonly offered riders is the Unit Linked disability and accident benefit rider. It increases the Life Cover amount and ensures that your Life Cover continues in case of disability caused by accident.2.ULIPs Offer Transparency
The ULIPs charges are transparent and enable you to make informed decisions with the help of the following features:
- Benefit illustration: It is your right as a customer to ask for a sales benefit illustration. This will help you understand the usage of the premiums and the charges deducted during the policy term. This also informs on the possible growth based on the chosen premium.
- Product brochures and key feature documents: While benefit illustrations explain the measurable aspects of ULIPs, it is also essential to understand the other benefits and features offered by ULIPs.
You can go through the product brochure to understand the policy benefits in detail. Once your policy is issued, you will get a key feature document explaining the key features of the plan. This will ensure your complete understanding of the program that you have purchased. - Free-look period: Life insurance plans including, ULIPs, come with a free-look period, during which you can return the policy if you are not satisfied with it.
- Net Asset Value (NAV): It is essential to monitor the performance of your policy regularly. To help you do this, the company publishes NAV daily. NAV is the price at which the units of a fund are purchased. An increase and decrease in the NAV price give you an indication of the performance of your funds.3.ULIPs Encourage Goal-Based Savings
You need to save to achieve your life’s important goals, such as providing higher education to your children, ensuring a comfortable retirement, or buying a home. ULIPs are long-term systematic investments, which are one of the most practical ways to do so. Designed to address critical financial goals, they help you invest your money in a disciplined manner.
At Unit Linked, we are the most trusted insurance company aimed at the Russian-speaking population of the whole world and providing access to all available Unit Linked programs. Select from our many program types, and in case of any confusion, don’t forget to visit us today at unit-linked.
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