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Many people plan investments and take insurance coverage separately. What if we tell you that you can manage finances as well as insurance – both under a single plan? Yes, with Unit Linked Insurance Plans, you can not only enjoy the benefits of life insurance but also make investments in the funds of your choice.
ULIPs provide investors with flexibility, something that traditional insurance plans lacked. Apart from the dual benefits of insurance and investment, it also offers some revolutionary features such as good returns, shorter tenures, and tax benefits.
The Indian investment market has been through many changes over the years. Just like any other investment instruments, ULIP plans have evolved over the past decade ever since they were first launched.
At present, the ULIP plans available in the market are better and come with advanced features. But the structure of the policy has undergone some major transformation. Let us have a close look at the evolution of ULIPs.
After the launch of ULIP Investment in the market, the popularity of the product decreased due to excessive front-load costs and other charges. Moreover, the plan was widely mis-sold as a three-year savings plan.
Incorrect information regarding the lock-in period was conveyed to the customers, wherein they were told that they would have to pay premiums not exceeding three years. Where in fact, long-term investment in ULIP plans is essential to yield good ULIP returns.
When investors realised that a majority of portion of the premiums paid is utilised for additional charges and the net fund value was much lesser, it led to the decrease in the popularity of ULIPs.
When the Insurance Regulatory and Development Authority of India (IRDAI) realised that ULIP plans were mis-sold across the country, and investors were duped for crores of rupees, they imposed some guidelines. The primary purpose of stricter rules was to improve the returns earned by the investors.
Thus, in September 2010, several ULIP charges were limited, the lock-in period increased to five years, and the minimum protection cover was raised to 10 times the annual premium paid.
In the year 2015, the charges associated with ULIP plans underwent significant changes. Providers started capping the mortality charges and fund management charges, making the product more appealing to the audience.
Despite a rocky start, ULIP plans today are widely popular as they yield high returns in the long run. In fact, the product is now being structured to become more cost-efficient. Investors are more precise about the concept that ULIPs are and are starting to make a significant investment in the same. Along with ULIP tax benefits, the wealth built over the years with the help of ULIP plans can be utilised for long-term goals like retirement planning.
The amount you invest in a ULIP plan is eligible for tax deductions under Section 80C of the Income Tax Act, 1961. The maximum amount deductible under it is INR 1.50 Lakh. Moreover, when the policy matures, the amount you receive is exempted from tax as well under Section 10 (10D).
Since there are several products available in the market, customers tend to make a wrong decision while selecting the right product for themselves. However, an excellent way of choosing the right ULIP Policy is using a ULIP calculator.
A ULIP calculator is an online tool, which allows you to not only calculate the premium but also measure the ULIP returns. The tool calculates the returns based on the premium amount. Moreover, you can compare several ULIP plans based on ULIP returns and premium.
In the long run, each investment makes a significant difference to your portfolio, further taking you closer to your financial goals. Hence, for each financial purpose in your life, there is a ULIP plan available in the market. Bajaj Allianz ULIP Plans are a reliable investment tool for accomplishing your dual needs – insurance as well as building your wealth alongside.
That’s not it!
With Bajaj Allianz ULIP plans such as Bajaj Allianz Future Gain and Bajaj Allianz Goal Assure, you can benefit from facilities such as partial withdrawal of funds, alter premium payment frequency, rider options, and more. Some plans also offer features like the return of mortality charges, return enhancers, loyalty additions, fund boosters, and more.
Just browse through our full range of ULIP plans at Finserv MARKETS online and choose a policy that best suits your needs.