If you have seen all the praises for Unit Linked Insurance Plans (ULIPs) and wondering what is ULIP plan, read on.
ULIP is essentially a life insurance policy. What sets it apart from other life plans is its flexible investment features. Insurance providers utilize your premium and invest in different avenues, such as equity, debt, or a mixture of funds under your plan. With ULIP, you have the option to decide how to allocate your capital in these funds as per your risk appetite and financial goals.
If you want to create a substantial fortune faster, it will help put your money in equity-based options. They are risky but can generate high profits when the financial market is performing well. If you are unwilling to take much monetary risk, you can consider investing in debt funds. They can earn moderate returns over an extended period.
If you are still thinking, “Why should I invest in ULIP now?“, the reason should be its many associated benefits. ULIP has a fund-switching facility that lets you reallocate your money among equity and debt funds as per your changing needs. So, when the market is volatile, you can shift to debt funds to lower the possibility of loss. Similarly, when the market starts to perform better, you can transfer your capital to an equity fund and allow your money to grow faster.
With these features, ULIP can help you build wealth and fulfill your most significant life goals, such as:
- Helps plan your retirement
If you want to lead a comfortable retired life, it is vital to start planning early. Retirement planning is one aspect of life that you need to take seriously. ULIPs can help you create a fortune that can fund your retired life. However, you must strategize wisely to ensure that you reach the targeted monetary goal.
Firstly, it is important to purchase the ULIP at a young age, as that will grant you enough time to create a large retirement fund. You can start by investing in equity-based avenues to gain high returns quickly. As you grow older, begin to switch your capital to debt funds to secure the corpus you have built. This way, you will have enough money by the time you retire, ensuring your economic well-being.
- Make your children’s lives better
The ULIP investment plan is a great tool to ensure a safe future for your children. The rising inflation is resulting in a higher cost of education, which may become more expensive when your children grow up. It will be costlier if they want to study abroad. If you wish to provide your child with the higher education they deserve, it is essential to create a considerable fund. You can purchase a ULIP that matures when your children need a college fund to serve the purpose. Later, you can use the fund to sponsor their wedding.
- Secures the future of your loved ones
The life insurance part of ULIPs ensures that your dependents remain financially stable in your absence. Apart from the death benefit, ULIP’s maturity payout will help them maintain their lifestyle when you cannot be there to take care of their needs. You may consider investing in a plan that offers a healthy mix of equity and debt-based investments to create wealth, keeping your family’s needs in mind.
Now that you know how the policy can help meet your aspirations, it is time to look for a well-performing ULIP investment plan. You can compare different policies online based on their past performances to get a better idea about their potential returns.