At a time when share market investments and mutual funds were dominating individual portfolios, Unit Linked Inusrance Plan investments gained the limelight by offering the promise of potentially high returns along with the benefit of a life cover. Investing in a ULIP Plan enables you to explore capital market investments with limited risks while bestowing the benefit of a life cover. Today, ULIPs have become one of the most popular investment avenues in the market. If you want to choose the right ULIP plan, it’s essential to start right from the basics:
A Unit Linked Investment Plan or ULIP is a unique investment avenue that offers the dual benefit of life insurance along with market-linked investments. As a ULIP policyholder, you have the freedom to invest in different types of investment instruments such as stocks, bonds as well as mutual funds. A part of the premium paid towards ULIP plans is utilised to provide you with a life cover, while the rest of the corpus is invested in the equity or debt markets as per your risk appetite. Both the investment and the protection component can be managed according to specific buyer choices and needs.
ULIP Plans are broadly classified into 2 types, namely type 1 and type 2 ULIPs. Let us understand these one by one:
Transparency in terms of features, benefits and charges is one of the key benefits of ULIP plans. This ensures that investors are able to make an informed investment decision.
The best feature of a ULIP policy are the multiple benefits. Investors can benefit not just from capital market returns but also secure a life cover. Hence ULIPs are an ideal investment avenue for investors who have a low-risk appetite but want to reap the benefits of market investments, nonetheless.
ULIPs are one of the most effective tax saving investments available in the market today. The premium paid towards ULIPs is exempt from tax up to Rs 1.5 Lakh under the section 80C. Moreover, the returns generated from ULIPs are tax-free under section 10(10D) of the Income Tax Act.
Since ULIPs invest in a variety of funds managed by professional fund managers, they are suitable for investors with varying degrees of risk appetite. Hence, ULIPs are a great investment avenue for investors who wish to avail the advantage of market growth without actually participating in the stock market.
ULIP plans are a long term investment instrument with a minimum lock-in period of five years or more. So before you invest, you must ask yourself- how long do you want your money to be invested in a policy? It makes sense to invest in a ULIP plan, only if you plan to invest for the long term. Staying invested for the long term gives the best possible returns from a ULIP plan. Longer duration helps you earn compounding returns from the growing markets.
As you must have read above, ULIPs allow you to choose from various plans according to your investment objective and risk-bearing capacity. So before you invest in a ULIP, make sure to define your long term investment objective. Once that is clear, you can choose a ULIP plan that aligns with your personal investment goals. At Finserv Markets, you can choose from a variety of best ULIP plans customized to match your goals.
All investment plans involve certain charges and ULIPs are no different. The charges are levied as a fee for managing your investments. Read through the policy documents to understand the various charges and how it will impact your investment. With Bajaj Allianz ULIP Plans, all the charges are detailed in the ULIP policy document itself, so that you have a clear idea about what you pay for and how the funds are used.
Now that you know how to choose the right ULIP plan, you will be able to make an informed investment decision. Finserv Markets brings you a variety of Bajaj ULIP plans from Bajaj Allianz tailored to meet your diverse financial and aspirational needs. Whether you want to save for retirement, your child’s education or invest your savings for greater returns, we have ULIP plans for every need. To know more or invest in Bajaj ULIP plans, visit Finserv Markets.
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