Being an Indian, we all understand the significance of savings. That’s the major reason why insurance companies, today, offer us a plethora of life insurance options to select from. There are numerous options like Unit Linked Insurance Plans (ULIP), endowment plans, term insurance, and so forth for the betterment of our financial stability. These policies help you with the generation of wealth as well as investment in equity markets.
On the contrary, if you’re looking forward to staying financially fit, you must opt for an insurance plan like the ULIPs. The primary motive of a ULIP Policy is to help the investor to build wealth in order to fulfill the needs of his family. Ideally, ULIPs serves us with not only a sense of security but also the benefits of growth under a single roof. So if you’re wondering what is ULIP and how to stay financially fit with it, then keep reading to find out more:
How do ULIPs help you to stay financially fit?
- Secures the family financially
A ULIP Policy ensures the security of your family by providing them with a death benefit at the time of the death of the policyholder. When an investor invests in a ULIP, he is asked to list down his nominees in order to provide them with financial protection in his absence. Therefore, when the policyholder dies, the nominee receives either sum assured or the fund value, whichever is higher.
- Exempts payment of taxes
Investment in ULIPs allows the policyholder with exemption from the payment of taxes. Under section 80C of the Income Tax Act, 1961, ULIP Policy ensures that it offers all its investors with tax saving benefits that help them in a longer run. These ULIP benefits are offered on the premiums as well as the returns. Unlike mutual funds, tax benefits are eligible on the type of funds that you have invested in.
- Helps to beat inflation
Have you ever sat down and listed down your long-term expenses? When you do so, there’s a constant fear of inflation that haunts us. Due to the rising inflation, your expenses will eventually skyrocket in the near future. However, with the help of ULIPs, you can beat this inflation by investing in either equity, debt or balanced funds. Investment in any of these funds will further provide you with high returns as compared to fixed deposits.
- Permits growth of funds
ULIPs are for those chasers who have been holding onto their dreams since forever. With the help of a ULIP Policy, you will be able to fulfill your life goals and aspirations. This is because ULIPs are considered as the best instrument in order to achieve the dreams of your family. When you invest in a ULIP, you will receive a higher rate of interest on your investment which further gets compounded.
- Offers flexible funding options
A right ULIP Plan will offer you with multiple funds options based on your risk appetite and fund allocation. ULIPs provide you a choice to select from its diverse range of funds like equity funds, debt funds, and balanced funds. For instance, if you have a higher risk appetite, you can invest in equity funds. Additionally, you can also switch from one fund to another in order to meet your self-goals.
Now that you know how ULIPs can help you stay financially fit, see to it that you get your hands on this policy immediately. This is because of the fact that ULIPs play an important role in not only ensuring the lives of the policyholder and his family but also creating long-term wealth. Investment in ULIPs comes in handy for everything and anything as it provides life coverage.