Unit Linked Insurance Plans, also known as ULIPs, are one of the best insurance policies that give you a chance to accumulate wealth while providing life cover. The good thing about the ULIP plan is that it comes both as an investment and insurance. There are higher yields in ULIPs compared to other investment options. Hence, ULIP is known as one of the best choices for investors. It’s a type of investment where you first make your investment then set the goals later. ULIP plan is the best for different reasons and here is are some reasons explaining why you should invest in a ULIP plan.
- Liberty to Select Your Life Cover
ULIP plan allows you to choose the amount of cover you need. The plan offers as much as ten times your annual savings. Therefore, you are assured of the coverage. In the unfortunate event that you die, ULIP offers the beneficiaries the care they need. The amount assured to you is used to cater for their daily expenses, paying loans, and others.
- Variety of Investment Options
In the ULIP plan, you are offered two basic funds- debt funds and equity funds. When you consider equity funds, you can be able to buy some shares from companies of your choice. Debt funds help in covering any debt that you may incur. ULIP gives you the liberty to invest in any of the funds. With equity funds, you can comfortably take risks with your investments. It is also possible to switch the money between the two funds using the switch option. This is different from other insurance plans where you have limited switch options.
- Long-Term Type of Investment
Ven if you had set short-term goals during entry, ULIP allows you to adjust the goals to the long-term. Whether it is buying a car, purchasing a new home, or starting a business, a ULIP plan proves to be the best option for long term investment It has a five-year-long period where you can lock your savings. At the end of the day, you have more money than you would have saved without the investment. Once you invest in ULIP, you give your money a chance to grow.
- Tax Benefits
According to the Tax Act, 1961, you can easily save money in ULIP to get various advantages. You get entry tax advantage, switch advantage, and exit advantage. These are advantages that you cannot easily get from other investment selections. So, the tax benefit is one major reason to invest in a ULIP plan.
ULIP is one of the most transparent options you will come across. After investing, it is easy to track the progress of your account. Transparency is also assured on the charges involved. Therefore, if you don’t want to deal with hidden charges, then transparency is a reason to choose ULIP.
The Bottom Line
The reasons mentioned above are just the tip of the iceberg. There are more reasons why you need to invest in a ULIP plan. There are numerous opportunities in the market for you. Thus, ULIP comes as a package for your financial goals as well as financial security.