Unit Linked Insurance Plans (ULIPs) are a category of goal-based financial solutions that offer dual benefits of protection and Investment. Your Unit linked Insurance Plan is linked to the capital market and offers you flexibility to invest your units in equity or debt funds depending upon your risk appetite. ULIPs are typically bought for long term capital gains and offer a protection cover too.
2. All you want to know about Unit
Linked Insurance Plan
3. All you want to know about Unit Linked Insurance Plan
Unit Linked Insurance Plans (ULIPs) are a category of goal-based financial
solutions that offer dual benefits of protection and Investment. Your Unit
linked Insurance Plan is linked to the capital market and offers you flexibility
to invest your units in equity or debt funds depending upon your risk
appetite. ULIPs are typically bought for long term capital gains and offer a
protection cover too.
Though much has been written about ULIPs in the past, a lot has also
changed for better. In 2010 the IRDA issued new guidelines for ULIPs in
order to improve the returns for investors by reducing charges and to ensure
that the new product is sold and bought as a long-term protection and
savings tool.
For last few years the demand for traditional insurance plans has
considerably gone up overshadowing the ULIPs. Let me bring back the focus
on what a new Best ULIP Insurance Plan is all about and what’s in it for you
as a customer.
4. WHAT MAKES ULIP A BETTER INVESTMENT PRODUCT?
1. Avoid everyday hassle of managing stocks : Invest in ULIP which
provides you
Expert fund management
Multiple fund options – You can choose the type of fund in which premiums
will be invested.
Different Investment strategies like opportunist and Balanced approach
2. Adapt your portfolio , don’t toggle it : ULIPs allow you to shift your
money from one fund to another without disturbing your long term financial
plan
Fund Switching : Shift your funds from equity funds to debt funds or vice-
versa
Premium Redirection: Re-direct your future premiums to any fund of your
choice while keeping your existing fund composition intact.
5. Premium Redirection: Re-direct your future premiums to any fund of your
choice while keeping your existing fund composition intact.
Partial Withdrawal: ULIP’s provide flexibility to its policyholders to
“partially” withdraw some amount of money from his own accumulated Fund
Value before the policy tenure is over.
WHAT ARE THE UNIQUE FEATURES THAT IT OFFERS TO CUSTOMERS?
Investment and Insurance cover
It’s a two-in-one plan in terms of giving an individual the twin benefits of life
insurance and investment.
Multiple investment options
You can invest in multiple fund options based on your life stage needs and risk
profile.
Transparency and tax benefits
You know what is the amount you are paying for the various benefits and you
will also get tax benefits under section 80 C & 10(10D) as per prevailing tax
laws.
6. BUSTING THE MYTHS
ULIPs are expensive: Charges are capped by IRDA regulation since Sept 2010
.In simple words, overall charges cannot exceed the prescribed limit set by the
regulator -the net reduction in yield cannot be more than 3% for a 10 year term
policy. This reduction in yield includes all charges except mortality and
morbidity charges. Even fund management charges (FMC) are capped at 1.35% .
This capping of charges ensures a reasonable value proposition for the
customers.
ULIPS offer low returns: There are several factors that enable the investor to
get a good return:
Invest for long terms: ULIP offered by Life insurance companies are the only
long term avenues for investing in disciplined manner, along with valuable life
cover.
Your choice for funds and judicious switching, redirection of funds/premiums
will ensure that the fund growth is healthy.
We have observed that following these tips help the customer lock in good
returns upon maturity.
