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Features of ULIP

Customisation with Riders: You can enhance the protection element of your ULIP by adding riders such as accidental death benefit, critical illness rider, or waiver of premium, depending on the insurer’s offering.

83.4%

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Riders Available With ULIP Plans?

ULIP offers a range of additional riders that can be added to your policy to enhance its coverage and benefits. These riders are supplementary benefits that allow you to customise your ULIP plan according to your specific needs and financial goals. Here's an overview of the most common riders available with ULIP:

First paragraph46 words

Features of ULIP

Dual Benefit of Insurance and Investment: ULIPs provide life insurance coverage along with the opportunity to grow your wealth . A part of your premium goes toward securing a life cover, while the rest is invested in market-linked instruments such as equity, debt, or hybrid funds.

80.3%

Second paragraph105 words

What is a ULIP Plan?

A ULIP is an insurance product that provides you with the double benefit of investment to achieve long-term wealth creation goal, and a life cover to secure your family’s future if there is an unfortunate event. The premium paid for ULIP is divided into two parts. One part of the premium is used for your life cover and the remaining sum is invested in the fund of your choice. In ULIP plans, you can invest your money in equity, debt or a combination of both funds depending on your risk appetite. The returns on the investment depend upon the performance of the funds.

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Features of ULIP

Multiple Fund Choices: ULIPs typically offer a variety of fund options ranging from high-risk equity funds to low-risk debt funds. You can choose where to invest based on your financial goals and risk tolerance.

53.1%

Second paragraph38 words

Myth 2: ULIP is a Risky Investment Option

Under ULIP, investors are allowed to choose funds based on their risk appetite. ULIP come with several fund options, such as debt and liquid funds for low-risk investors, while equity funds for high and moderate risk investors.

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What is ULIP?

A Unit Linked Insurance Plan (ULIP) is a dual-purpose financial product. It combines life insurance coverage with market-linked investment opportunities within a single plan. When you invest in a ULIP, a portion of your premium goes toward providing life insurance cover, while the rest is invested in market-linked instruments like equity, debt, or balanced funds, based on your risk appetite.

46.4%

Second paragraph105 words

What is a ULIP Plan?

A ULIP is an insurance product that provides you with the double benefit of investment to achieve long-term wealth creation goal, and a life cover to secure your family’s future if there is an unfortunate event. The premium paid for ULIP is divided into two parts. One part of the premium is used for your life cover and the remaining sum is invested in the fund of your choice. In ULIP plans, you can invest your money in equity, debt or a combination of both funds depending on your risk appetite. The returns on the investment depend upon the performance of the funds.

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Features of ULIP

Long-Term Wealth Creation: Since ULIPs have a lock-in period of 5 years, they encourage long-term investing. This disciplined investment approach helps build substantial wealth over time through the power of compounding and market growth.

45.3%

Second paragraph53 words

Features of ULIP Plans

Lock-in Period: ULIPs come with a lock-in period of 5 years and may offer the potential for wealth creation when invested over a long period of time. Therefore, it can be said that the longer you stay invested in a ULIP, the more it may support your long-term investment goals.

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Key Takeaways

ULIPs combine life insurance and market-linked investments, making them ideal for long-term goals like retirement. You can switch between equity, debt, or balanced funds based on your risk profile, without tax implications.

42.9%

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Myth 5: Not a Good Option

ULIP plans combine life insurance protection with market-linked investments, making them a possible option for individuals looking to address both protection and long-term investment needs.

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Features of ULIP

Top-Up Premium Option: ULIPs allow you to make additional investments in the same policy through top-up premiums. This is useful when you have surplus funds and want to increase your investment without purchasing a new policy.

41.9%

Second paragraph207 words

Benefits of a ULIP Plan

Flexibility: ULIP plans allow you to switch to a different investment option. This can be useful if you do not have fixed financial goals or wish to rebalance your investments by shifting between funds. It provides you with greater flexibility by allowing you to control where and in what proportion your money is invested. The following features provided by ULIPs enable this flexibility: Fund Switching Option: Through the use of this feature, you can move your money between funds based on your investment preferences. For example, you may have invested a significant portion of your money in equity funds and now wish to transfer some of it to safer debt funds. The fund switching option allows you to do this. Redirection of Premium: ULIPs provide multiple fund options for investment. If you have invested in one fund earlier and no longer find it suitable, you can choose another fund, and the future premiums will be redirected to that fund. Partial Withdrawal Facility: This option allows you to withdraw a portion of your funds if required, subject to policy terms and the completion of the lock-in period. Top-up Facility: Through this feature, you can add additional funds to your existing ULIP investment without changing the policy.

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Features of ULIP

Tax Benefits: Investments made in ULIPs are eligible for tax deductions under Section 123 of the Income Tax Act (up to ₹1.5 lakh annually). Additionally, the maturity proceeds may be tax-free under Schedule II (Table S.No. 2) (previously known as Section 10(10D) ), subject to certain conditions.

39.5%

Second paragraph75 words

How to Choose the Best ULIP Plan?

Maximum Tax Saving Benefits of ULIP: ULIP plans provide you with tax benefits. There are deductions as per the Income Tax Act 1961 available under various sections if you have invested in ULIP. These involve: A deduction of up to ₹ 1.5 Lakh is available on the premium that is paid towards the policy under section 80C Also, the maturity, as well as the death benefits received, are tax-free under section 10(10)D

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Features of ULIP

Partial Withdrawal Facility: ULIPs offer partial withdrawal options after a 5-year lock-in period. This helps you access funds in case of emergencies or short-term financial needs without completely surrendering the policy.

37.5%

Second paragraph29 words

Partial Withdrawal Charges

ULIP allows partial withdrawals of funds, allowing investors to withdraw money partially after the lock-in period. However, such withdrawals may attract certain charges depending on the policy conditions.