Investments can be one of the most imperative aspects of your financial planning. Although you might fear the market risks involved with investments, it can help you to grow your wealth over the due course. The key to multiplying your funds with the help of investments is to start looking for long-term investment options that can help you get your life goals done.
Although there are different investment plans such as Equity Linked Savings Scheme (ELSS), Mutual Fund (MF), and so forth, you should choose a Unit Linked Insurance Plan (ULIP). A ULIP plan is a long-term investment solution, which has a lock-in period of five years. Due to the long lock-in period, you can build a substantial corpus as well as achieve relatively high returns throughout the tenure of the ULIP policy. Before you select a ULIP investment for you, let’s understand what a ULIP plan is in detail:
A ULIP plan can be a unique financial product, which is a mix of investment and insurance under a single integrated plan. The dual-benefits of a ULIP policy can allow you to actively participate in the capital markets well as secure your loved ones financially. Moreover, you can fulfil your long-term life goals such as buying a new house or a car, planning your child’s dream wedding, and so forth if you stay invested for a long time. Although a ULIP plan is a market-linked product, you can secure your invested capital from market fluctuations. Therefore, a ULIP investment can be suitable for a long-term purpose.
A ULIP policy can provide you with various features to match your long-term goals. Let’s take a look below to learn the features of a ULIP investment in detail:
- Fund options
A ULIP policy can be a flexible form of investment. Under a ULIP investment, you can have the liberty to choose between equity funds and debt funds. While equity funds can offer relatively high returns due to its high-risk quotient, the debt funds can provide low returns since they are less risky. As a policyholder, you should select between these funds based on your risk appetite and investment goals. In addition to this, you can switch between equity funds and debt funds to protect your money from market volatility.
- Partial withdrawal
Typically, a ULIP policy might not usually allow you to liquidate your funds before the completion of the lock-in period. After the ULIP policy reaches the maturity period, you can make a tax-free withdrawal. However, during an emergency, your insurer might allow you to withdraw partially from your selected fund.
Premium is an essential element of every life insurance product. Typically, a premium can be charged in the return of life coverage. Since a ULIP plan can provide you with coverage for the financial security of your family, you should pay the premium regularly. However, you can decide the premium payment frequency depending on your preference. As a policyholder, you can make the premium payment quarterly, monthly, half-yearly, or annually. We can say that premium is basically a price that one pays to generate the required corpus in the future and secure their family through dual ULIP benefits – Investment + Life Insurance cover.
- Sum assured
Typically, your life can be divided into various life stages. Since your financial needs can vary at every life stage, you should choose an adequate sum assured value based on your financial requirements. First, you should identify your financial goals and calculate the estimated amount that you require to meet your long-term goals. Moreover, see to it that you know the premium amount you require for the selected sum assured value.
As highlighted above, a ULIP investment can be best suited for all your long-term life goals. With the right ULIP plan, you can achieve your financial goals at every stage of your life. Therefore, compare various ULIP plans and choose the right one based on your financial requirements, risk appetite, and investment goals.