Sprinkle the colors of happiness in your future
Every person aspires to give the best of the happiness to their family in the day-to-day living. Secondly, the other growing concern is to create sufficient wealth before they perish from the world so that their family continues to enjoy the same standard of living as of now.
While you’re struck with dual concern the insurance market has also come up with a policy which has a dual benefit of investment-cum-insurance facility. Yes, Unit Linked Insurance Plan (ULIP) is an investment vehicle running on the wheels of dual benefits of investment in the capital markets along with insurance.
They are designed to help you meet the financial goals by ensuring high return value (depending on funds you choose) of your investments and secondly to provide your nominee the sum assured, which is the life cover of your policy.
While choosing the best ULIP insurance policy one important thing that you should keep in mind is to make sure that your ULIP is truly working to assure your goal.
First Focus on choosing a life cover that provides your family with adequate finances and hence security even in your absence, so that important life goals of your family are always secured. You can then divert the rest of your amount in investment channels.
ULIPs have an in-built range of fund options to choose which range from aggressive funds (primarily invested in equities with the general aim of capital appreciation) to conservative funds (invested in cash, bonds, and money market instruments with the aim of capital preservation) so that you can decide to invest your money in line with your market outlook, time horizon, and your investment preferences and needs.
It is advisable to first understand your risk appetite. For this you will need to take an insight on your past expenditures, current financial situations and future needs. Based on this you can opt for a more aggressive investment option or go for defensive funds or vice versa.
Well the one great flexibility which ULIP offer is switching fund options to make your investments work in tandem with the market. These days, various ULIPs offer the options of life stage strategy which keep dynamically altering on its own without you having to do any monitor the funds.
“Time is money” can be the best quote for Unit-linked Insurance Plan. ULIP are usually designed to achieve your long-term financial goals. As a short term investment tool, they will not give you considerable return on your investments. It’s simple the cost structure of the product is higher in the initial years.
However, overall charge structure for the term comes down substantially over a long period of time thus allowing greater allocation of your premium in the chosen funds, thereby helping to wealth creation. They meet the two most important financial needs: protection and investment.
The important charges to know about before purchasing a ULIP are: Premium Allocation charge, Policy Administration charge, Mortality charge and Fund Management charge. It may be noted that insurers have the right to revise the fees and charges over a period of time.
To make it the best ULIP insurance policy, you should remain invested in the ULIP for the period of at least 8-10 years. This way, your investment will truly sense the power of compounding and thereby create greater wealth for to achieve your long term goals.
Unit-Linked Insurance Plans (ULIPs) offer you a host of benefits such as investment flexibilities ranging from top up, switch between funds, increase or decrease the life cover during the term of the policy, cover continuance option, surrender options & range of add-on which can be attached to the main policy to provide a comprehensive protection.
Comparison is the good, always go through the brochure, pamphlets, online research materials and compare policies, benefits, charges and planning structure so that you can make right choices in securing your goals be it retirement planning, planning for your children's education, or wealth creation and thus create the best ULIP insurance policy of your life.