ULIP is a multi-faceted financial instrument that provides insurance coverage as well as investment exposure. It can be used for multiple purposes such as wealth creation, life insurance coverage, retirement planning, paying for your child's education, etc.
Understanding how the ULIP plan works is essential if you are looking forward to going with the plan. So, read ahead to learn about how ULIP works so that you can make an informed decision.
A ULIP plan is a financial product that combines the benefits of life insurance and market-linked investments. As a policyholder, you have to pay a premium regularly. The insurance company divides the premium amount into two portions.
One portion is used to provide life insurance coverage and the remaining is used for investment in equity, debt, index or hybrid funds. You can select the fund allocation according to your risk tolerance and financial goals.
The returns of your investment depend on the Net Asset Value (NAV) of the fund chosen by you. Skilled fund managers manage your investments and aim for higher returns through analysis and research. There is also a provision for partial withdrawal after a lock-in period of 5 years.
Since ULIP provides you with life insurance coverage, the beneficiary is entitled to receive the death benefit if anything unfortunate happens to you. It includes the sum assured and the value of units held in the plan.
Now that you know how ULIP plan works, let us take a look at the benefits of this unique insurance product:
Unit-linked insurance plans provide you with low, medium, and high-risk investment choices through various fund options. You can pick the most appropriate investment option based on your risk appetite and financial goals.
ULIP also allows for additional investments or top-ups over and above basic premiums. This helps in adapting to changing external circumstances or income flows and making the most of investment opportunities. Flexible investment options give you more control over your investments and allow you to bring variations to your investment portfolio whenever required.
ULIP allows for partial withdrawals after a 5-year lock-in period. This helps you tackle financial emergencies with peace of mind.
ULIP is a transparent investment option that discloses investment value, rate of return and charges beforehand.
ULIP allows you to transfer your money from the current fund to another fund within the same policy as your risk appetite or financial goals change.
ULIP is an excellent way of saving in a disciplined manner. Regular payment of the policy premium ensures insurance coverage and investment payout that takes care of financial needs in the future.
You can enjoy tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, of 1961 by going with a ULIP. You can claim tax deductions of up to ₹1.5 lakh per year for the premiums paid while the death benefit is tax-free.
ULIP is popularly known as a market-linked insurance plan. It is an excellent tool that allows you to build wealth and ensure the financial protection of your loved ones after you. Investing in this versatile plan can help you fulfil long-term financial goals like retirement planning, funding your child's education, buying a home, etc. Contact PNB MetLife for more information on ULIP.
Unit-linked insurance plan ULIP is a good investment option if you have a long investment horizon and are willing to take market risks. It offers you flexibility and control over your investments.
Yes, you can break your ULIP before maturity. However, you cannot withdraw your investment before the mandatory 5-year lock-in period.
A ULIP combines the benefits of life insurance and investment payout. The insurance company divides the premium amount into two portions. One portion of the premium is used to provide a life insurance cover and the remaining is used for investment in equities, debt, index or hybrid funds.
Disclaimer:
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
PNB MetLife India Insurance Company Limited
Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka IRDAI Registration number 117 | CIN U66010KA2001PLC028883
Terms & conditions apply, Benefits stipulated are subject to premiums paid and policies in-force. For more details on risk factors, please read the sales brochure and the terms and conditions of the policy, carefully before concluding the sale.
Tax benefits are as per the Income Tax Act, 1961, & are subject to amendments made thereto from time to time. Please consult your tax consultant for more details.
Goods and Services Tax (GST) shall be levied as per prevailing tax laws which are subject to change from time to time.
The marks "PNB" and "MetLife" are registered trademarks of Punjab National Bank and Metropolitan Life Insurance Company, respectively. PNB MetLife India Insurance Company Limited is a licensed user of these marks.
Call us Toll-free at 1-800-425-6969, Website: www.pnbmetlife.com, Email: indiaservice@pnbmetlife.co.in or Write to us: 1st Floor, Techniplex -1, Techniplex Complex, Off Veer Savarkar Flyover, Goregaon (West), Mumbai – 400062, Maharashtra.
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