5 Reasons Why You Should Choose ULIPs for Accumulation of Wealth

Unit-linked insurance plan is a product that offers insurance coverage along with investment avenues. With the needed financial coverage for your loved ones in your absence, a ULIP allows wealth creation. For those who do not have relevant market experience or time to manage their portfolios, a unit-linked investment plan is the best option. Good financial planning is focused on investment, insurance and savings for the future. ULIPs provide all three under one plan.

Here are the 5 reasons why you should choose ULIPs to accumulate wealth:

• Hassle-free management of capital
  

  ULIP investment ensures you invest in the market having an appropriate insurance cover with no separate premiums. A ULIP helps accumulate wealth through participation in the financial market even when you don’t have the market experience. Depending on your risk appetite, you can invest in a single asset or diversify your funds. The plan pools your investment with other investors. This leads to hassle-free management of your funds.

• ULIP allows switching between funds to create more wealth
  

  The premium in ULIP is partly divided between insurance coverage and investment. The investment is made either in equity funds, debt funds or diversified funds based on your risk appetite. When you start getting high returns out of your investment, your risk appetite might grow. As a result, you can switch between the funds. By doing this, you can accumulate more wealth. A ULIP also gives you top-ups to benefit from new investment options.

• ULIP helps in long-term investments
  

  If you want to make long-term investments for the future, ULIP is a good option. The returns may be poor initially due to the market links. But staying in the market for a long time improves your risk appetite, and you get higher returns. A ULIP also helps inculcate long-term saving habits creating a corpus of wealth in the future. A disciplined investment ensures your long-term goals are not compromised for short-term needs.

• Net Asset Value helps you make an informed decision
  

  NAV is the price of units of a fund. A rise or fall in the prices of units helps monitor the performance of funds. Thus, daily publish of NAV updates by the companies help you make informed investment decisions.

• ULIP is a tax-efficient wealth plan
  

  A ULIP is relatively tax-efficient than other investment options like mutual funds. It offers tax benefits under Section 80C of the Income Tax Act, 1961, where you can deduct up to ₹1.5 lakhs in premiums paid. In addition, if the annual premium is less than ₹2.5 lakhs, the maturity benefit is not taxed. Also, you can switch between the funds without any tax implications, unlike mutual funds that involve taxes on changing schemes.

Things to Consider Before Buying a ULIP

A ULIP involves strategic investment. Before you invest in a ULIP, you must know about the following:

• Features and ULIP benefits
• Available fund options
• Policy charges and policy terms
• Risks involved
• Your risk-taking capacity
• Your long-term financial goals and needs

Moreover, while choosing a ULIP for yourself, look for the following:

• Different premium payment options
• The scope of flexibility to change funds
• Appropriate insurance coverage
• Claim settlement ratio of the insurance provider

Conclusion

ULIP investment helps secure a financial future in the best possible ways. It provides insurance coverage and investment without administering premium payments separately. Like a perfect financial plan, a ULIP offers insurance, helps accumulate wealth and saves for the future. It is a one-stop solution to your family’s financial security and long-term goals.

PNBMetlife offers several insurance plans to meet your financial needs. With the best policy advice, plans and easy claim settlement process, PNBMetlife ensures you make the best choice for you and your family. So, start investing with PNBMetlife now! Visit now to know more about term plan, term insurance, ulip plan, retirement plan, long term savings.