A noteworthy establishment by health insurance companies is Unit Link insurance plan which is also abbreviated as ULIP plan which is said to play a dual role for policyholders. With this scheme, a policyholder also becomes an investor since this scheme provides to hit two birds with one stone.
What an ULIP plan offers is that premiums are paid by a policyholder holder monthly or even annually and these premiums are divided into two parts. One part goes for insurance plans and another one is invested in stocks, shares, etc. Thus, this policy gives you the benefit of enjoying both reimbursement and easy returns. This policy is widely accepted and considered to be associated with low risks since it is based on long-term investments. You can either go for equity plans or debt plans, whichever you feel would be beneficial for you in the long run. This ULIP plan also safeguards you against any market risks of inflation and deflation. Thus, ULIP plays a dual role in safeguarding their policyholders from both risks and inflation in these following ways: Coverage for your family – A ULIP plan not only provides life insurance coverage but also allows you to invest in equity shares that promise to give valuable returns in the long run. Even if an investor or a policyholder has a sudden demise within the tenure of his plan, then his or her family will get the returns and reimbursement claims. Flexibility in plans - Once your money has doubled in equities, you have an option to switch your investment to ULIP debt funds when you are approaching your maturity period. Thus, this flexibility in a change of plans is unique about an ULIP plan. Not many investment companies allow you to switch between investments without any cost, but however ULIP plan gives you this privilege of flexibility in plans in accordance with its market performance. Tax Benefits - Premiums paid for investing in an ULIP plan makes you eligible for tax deduction under Section 80C. Also, on maturity, your returns are exempted from payment of incomes taxes under Section 10 (10d) of the Income Tax Act. Long term goals –Even if a share market is entirely risky, with inflation and deflation on the run, your investment is bound to provide cash flow since your tenure in an ULIP plan is mostly a long term investment plan. Long-term goals like saving for your marriage or buying a car or a house are easily substantiated by the returns you get from an ULIP plan. Thus, an ULIP plan is beneficial for an investor in various ways. However, there are a few things which you need to keep in mind while signing up for an ULIP plan like its investment period, its risks regarding equity-linked savings schemes, nature of funds where an ULIP plan invests, your reason for investing in a ULIP plan, etc. Therefore, make the best out of an ULIP plan by getting one with fewer background expenses, considerable premium and better performance.
0 Comments
|
AuthorWrite something about yourself. No need to be fancy, just an overview. Archives
April 2022
Categories |