ULIP Plan: Should You Consider It for Your Savings?

It is true that the financial needs for anyone can change on a frequent basis. When things alter continuously, there are two significant financial aspects you must always keep in mind: savings and timely protection. In the market, you could explore a number of options that concentrate individually on these two aspects of your finances.

Of course, there is also a savings opportunity that caters the dual perk of life insurance protection as well as development on the capital. This is known as that of Unit Linked Insurance Plan (ULIP) and it invests your cash over a longer term to form up wealth for the future. You can look for a good Ulip plan and ensure that you have the right one for your future savings. It might interest you that this investment gets made in high-grade market securities, both debt and equity. The ULIP policy is an important addition to your financial portfolio, as given below.

Pick your investment mix

You know, on the basis of your risk appetite, you possess the option to choose the mix of market entities that you invest in. You can easily go ahead to invest in debt funds in case you are a low risk-taker, balanced funds in case you are a moderate risk-taker, and equity funds in case you are a high-risk taker. You even have the option of switching between funds, relying on your market outlook. You have the alternative of referring to fund ratings of independent investment research agencies before deciding on the kind of funds and policy to invest in. In this way, you can pick that suffices your needs.

The thing is that ULIP keeps you floating even in the instable market conditions. Investors can easily switch from one particular fund option to that of another as per the market movements and outlook. Interestingly, various types of ULIP options allow you to go for countless number of switches without any charges for getting the facility, unlike other market instruments.Moreover, when you do investment in equity, the working or performance of your fund relies on stock market results. So, in case you have a risk-taking appetite, you can easily invest in equity linked ULIP to get to your financial goals.

Absolute Flexibility

ULIP can also give you the option of switching between funds relying on your market outlook. This flexibility is not really there in other investment plans. The advantage of this unit-linked investment plan is that it gets you the flexibility of picking and switching between debt and equity funds. During an uncertainty, you can easily invest in debt funds, and when the market acts well, you can opt for equity funds. Staying invested for a longer time or term, i.e., ten years or so, could provide you with opportunities to reap huge benefits with these tiny, but significant alterations.

The long-term investment

For attaining long-term goals like buying a house, a new luxurious car, opening a start-up, etc., Ulipturns out to be a good option. With the power of compounding, this option of ULIP caters a better return over a longer time horizon – this is a great and crucial advantage of investing in ULIP. In case you actually exit the policy after 5 years, what you would get in ULIP is going to be far greater than what you might or would get if you would have just saved that amount without investing. Your money is going to grow faster over a longer time horizon than that of keeping it deposited in savings accounts or even bank fixed deposits.

The point is this compounding refers to the re-investment of income to produce additional income over time. The longer you remain invested, the higher is going to be your wealth accumulation. Hence, by investing early for your long-term aims, you permit your money to grow because of the power of compounding.  The point is that you can relish the benefits of power of compounding through ULIP option. The lock-in period of five years and the long-term investment orientation of ULIP gets considerable time for your funds to multiply and grow and your wealth compounds over time.

Enjoy 4 Tax Benefits

Not all types of investment options provide tax benefits. Since this option of ULIP is a life insurance product, it caters tax benefits. For premiums paid, you can even get tax refunds.  So, you would not only save money but even can see it grow.

A Good Habit from a Young Age

Teaching the habit of saving from the very start of your career is going to help diminish the burden of a higher monthly or yearly contribution towards the goals of your life in the later phase of your life. With early job opportunities, young professionals in the present time can make systematic investments towards their goals right at the start of their career. Of course, doing a good amount of saving is a great habit and everyone should inculcate it for the best returns and perks. The thing is , when you are young, you have the hugest advantage of the time being on your side. By investing early, you are going to have better chances of reaching your life aims in a comfortable manner. It is all about the impact of saving at the right time and from a right age. And not to forget that ULIP caters you the much-required flexibility in your investment to ensure not only you beat the effects of inflation, but also guard your quantity.

Stay Attentive

You know what, you must stay attentive about what are the options and how to pick the right one. You should explore the options that are given in the ULIP and make sure that you are getting this plan from a right authority.  You can look for the best ULIP plans in India and ensure that it works for you wonderfully. It is all about which one you pick and why.

Conclusion

So, once you keep all these things in mind, you can be sure that you have the policy that is effective for you.

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