Everything you need to know about ULIP’s

ULIP stands for unit linked insurance plan. An ULIP plan is a hybrid of insurance and investment. In layman language, it offers financial protection against unforeseen risk as well as offers capital appreciation of the investment made. Being one of its kind life insurance, the functioning of unit linked plan might sound arduous to some insurers.For the ones who get confused with every line they read about unit linked plans, here is a comprehensive, A to Z guide on unit linked plans, its working along with benefits and eligibility.

What is unit linked insurance plan?

Like said prior, unit linked plans is an investment cum insurance scheme. Like any other insurance plan, premium needs to be paid to keep the unit linked insurance plan active. A part of the premium goes towards insurance coverage while the other part of the premium is invested in equity funds, debt funds or both.

Who should buy unit linked insurance plan?

• Unit linked plans are part investments and allow fund switching. Individuals who understand how to play in the market should definitely opt for ULIPs.

• Buyers who are looking for medium to long term investment plans.

• Individuals looking for portfolio diversification.

There is no age eligibility for this plan as it is suited for both young and mid aged investors. Rather, the goal can be adjusted as per age- retirement planning, marriage etc.

What are the benefits of buying unit linked insurance plan?

• ULIPs are like the epitome of flexibility. Be it premium payment, benefit payout or switching funds for higher returns, everything can be customized and altered as per the will of the policy holder.

• You get to reap the advantages of savings, protection for yourself and your loved ones as well as a return on your investment all in one.

• You remain at peace knowing that your family's future financial needs are taken care of even after your demise.

• You can avail tax benefit on the premium paid subject to current applicable provisions of Section 80 C of income Tax Act, 1961

• You can choose to receive your maturity benefit through Settlement Option in installments as per the frequency chosen by you.

• You will be able to move your funds systematically to a relatively low risk Liquid Fund at the beginning of each of the last policy years depending on the terms of the policy.

• Unlike other insurance plans, you can meet your financial goals with this plan.

Apart from these benefits, if you plan to buy ULIP, you will get an option to choose between 7 different funds and 4 portfolio strategies. You will also have an option for partial withdrawals and mortality charge will be returned on maturity. Providers like Canara HSBC Oriental Bank of Commerce Life Insurance provide all of the above mentioned benefits with their Invest4G plan.

How to buy unit linked insurance plan?

• After reading the above stated norms, if you assess yourself to be an ideal candidate for ULIPs, the first step towards procuring it is going online.

• Once you go online look for different providers and ULIPs offered by them.

• Compare the plans based on the funds it invests in, reputation of the provider, claim settlement ratio and the premium that you are paying for the plan.

• As soon as you pick your pick, apply online and submit relevant documents.

Unit linked insurance plans offer the benefits of both life insurance and savings at market-linked returns. Thus, there’s an opportunity to invest your hard-earned money to earn higher returns, while taking care of your protection needs. Investing in unit linked Insurance plans helps in forming the habit of saving and investing for your future needs, which leads to wealth creation in the long term.