The most incredible selling point of the ULIP plan is that it provides dual combined benefits of an insurance plan and an investment option. Due to its flexibility, transparency, and potential for higher returns than other investment options, it has become a trendy investor option among investors.
ULIP investment is a market-linked investment option that allows investors to participate in the market, giving them the independence to earn their profits. Policyholders can also switch between the funds based on their risk appetite and financial goal. But that’s not it, the ULIP plan has a lot more to it!
Through this article, we shall explore various reasons why ULIP has been looked at as the most popular investment plan and why you should consider investing in the ULIP plan.
Reasons to Choose ULIP: ULIP Insurance Plan Investment Options
1. Dual benefits
The most critical and primary benefit that ULIP provides is investment and insurance benefits to policyholders. A ULIP plan provides financial assurance for the policyholder’s family in case of his untimely demise. At the same time, a part of the premium amount is allocated towards a preferred investment option to create wealth in the long run.
2. Enjoy Tax benefits
The ULIP policyholder has benefits of taxation where they enjoy exemption at all 3 stages, i.e., investment, returns, and withdrawals. Even the latest proposal under income tax regarding annual policy premiums exceeding ₹5 lakhs applies to all life insurance policies, except unit-linked insurance plans.
3. Top-up advantage
ULIP provides a top-up advantage to the policyholder wherein the policyholder can increase his investment amount in his existing policy. This especially helps when the existing investment fund is performing outstandingly.
If you are looking for such a policy option that provides a top-up advantage in the form of bonuses, then you should check the Tata AIA ULIP policy. It is one of the popular names for providing the best ULIP plans.
4. Switching option
ULIP allows the policyholder to switch between the funds, i.e., based on the ratio of exposure in equity, balance, or debt funds. The switch should be on the basis of the investor’s risk profile and the performance of various funds. ULIP is the only one of the funds that allows such flexibility. This ULIP investment option can be highly advantageous to policyholders who aggressively follow market trends and know how the market works.
5. High potential for returns
ULIP investment has the potential to earn high returns compared to other investment options. However, this high return depends upon the policyholder’s flexibility and risk-taking appetite. Also, with ULIP plans, if you stay invested for a long time, you may receive specific bonuses and rewards that act as wealth boosters or loyalty additions to your ULIP funds.
Conclusion
We can say the ULIP investment option has a bunch of features that make it more desirable for investors. But it is extremely important to do your research and choose a reliable insurance company that has transparent rules and a good market reputation.
