Tax-saving and wealth generation are two of the most crucial goals for many in the country. And for this to come to fruition, you may want to understand the benefits of long-term goals. Income tax can reduce a significant part of your salary and eventually cause trouble with investment. As a result, before considering any investment plans, you will need to do proper research about them.
When you want to save money, you will need to consider various factors, such as the lock-in period, return rate, and maturity period. These details will help you map your goals against your return on investment more accurately, so you can be assured of securing your future with ULIP plans.
What is a Unit Linked Insurance Plan?
Unit Linked Insurance Plans or ULIPs are investment product that combines two of our greatest needs – life insurance cover and wealth generation opportunities. Thus, the premium you pay is used for your life insurance cover and is invested in the market in a bouquet of funds of your choice. The biggest advantage of opting for a ULIP is that you can invest in funds basis your personal goals and risk appetite. You can also consult with a fund manager through your insurance provider, who will aid you in your investment journey.
Why should you consider investing in ULIP plans?
In the long run, ULIP plans can prove to be extremely beneficial. The ULIP plans will be linked to the market and thereby, help drive higher returns.
Meet financial goals
One of the main reasons why you should invest in ULIPs, and that too for the long term, is to receive a high maturity benefit. Almost every individual has long-term and short-term goals. Each of these goals requires you to plan and develop a corpus.
As the policyholder, you can use the payout you receive to fulfil a number of vital goals at every stage of life. Whether it’s buying your first home, getting married to your partner, prepping for your growing family, buying a car, paying off all your loans, planning vacations, or even funding your child’s education costs, the corpus you build can fuel all these priorities.
Disciplined Savings
Similar to other investment plans, a ULIP also helps you develop a healthy habit of saving on a regular basis. It is one of the most disciplined ways of saving money.
Saving a certain sum of money on a regular basis helps you generate financial capital in the future. This will be helpful to overcome any kind of monetary emergency, which makes ULIPs one of the best modes of investment. Investors will have the benefit of switching between the funds depending on the market conditions. As a result, you can overcome the market challenges.
Flexibility of payment
Flexibility of payment is something that you don’t get everywhere. However, with the availability of ULIPs you get various investment options ranging from high investment to low-risk investment. The different investment options are available within the same plan.
These investment options come in the form of a bouquet of funds that have something for every investor persona. Depending on your level of risk appetite you can choose the funds to invest in. You can also consult with your fund manager to guide you on this journey.
ULIPs offer the flexibility to choose a plan as per your need. Therefore, you can either opt for the sum insured or choose the premium accordingly. This flexibility leads to a positive impact on your investment portfolio. If you have an income flow, you need to consider the basics to get maximum financial benefits out of it!
Transparency
Do you know that ULIP plans provide the benefit of transparency? Right from the features of life insurance facilities to the funds you can invest in, all the details are presented to you from the beginning. In addition to this, the options for receiving payouts and their frequency are clearly defined, so you can make the best decision according to your unique needs.
In addition to these details, companies like Edelweiss Tokio Life also provide policyholders with supplementary benefits. These include extra fund allocations and top-up premiums. For example, if you opt for their Wealth Secure+ plan, you have the ability to put your surplus funds into your existing plan via a top-up premium facility. Policyholders in such a plan also benefit from Loyalty Additions, Booster Additions and Maturity Additions from the company, so your corpus has an even better chance to grow!
Liquidity when you want it
ULIPs play an important role in providing the option of partial withdrawal. If you have any unforeseen situations coming in, you will need to compare the liquidity. After the first five years, you will have the flexibility of withdrawing the funds, especially for the insurance plans.
Income tax benefits
The income tax benefits are one of the most prominent benefits of ULIPs. Due to this, most people consider investing in such a financial instrument.
Some of the common Income Tax Acts under which you will get the tax benefits for ULIP include Section 80C and Section 10(10D). Under section 80C, you can save up to Rs. 46,800 with premiums. On the other hand, under section 10(10D), the returns you receive are exempt from taxes.
Whole life protection
A growing number of ULIPs offer the policyholder up to 100 years of life cover. So, alongside wealth generation, you can also be assured of financial assistance in your times of need. You even have the provision to add your spouse or child to your plan, so their future is always taken care of. They will receive a lump sum payout in the event of unforeseen circumstances, so they don’t have to compromise on their lifestyle, even if you are no longer around.
Choose the best plan
Conducting research on the best ULIP plans will help you understand which plan you should invest in. The combined investment and insurance benefits in a ULIP pave the way for lasting success. These perks make ULIPs one of the best long-term investments that will allow you to achieve your desired financial goals in life.
During your quest to find the right plan, you should also analyse available plans in the market basis the returns offered to you. You should ideally choose a plan that offers you the highest returns. But make sure you choose a trustworthy investment partner since this will be a long-lasting relationship. Check reviews of the insurance providers and then make your choice.
Edelweiss Tokio Life provides the benefit of multiplying the wealth using insurance plans. Their plans also provide you with the flexibility to expand your investment portfolio. Therefore, you should consider investing in them and stepping up your goal. Contact them to know more.
