Being an investor in the volatile market is stressful. The market fluctuations have the ability to not only bankrupt the investor but also cease his participation in the equity markets. In order to cover the investors during such circumstances, the insurance companies have introduced a Unit Linked Insurance Plan (ULIP) for their safety.
Investing in a ULIP Plan ensures the financial security of your entire family in times of unforeseen events like deaths. A ULIP Policy acts as a lifeguard and pulls you out of every financial emergency as well as helps you to achieve all your financial goals. Being dual in nature, it serves the purpose of protection and growth perfectly. So if you’re wondering why a ULIP investment is important to secure your future, keep reading to find out more. Take a look:
4 reasons to opt for ULIPs in order to secure your financial future:
1. Fulfills your long term goal
Since the family is our top priority, every individual strives hard to fulfill the goals of their family. In order to lessen your burden, a ULIP Plan offers you and your loved ones with the right financial support in order to help them reach the sky. Therefore, it is advisable to invest in ULIPs and stay invested in the same plan for a longer duration of time. The longer the investment, the higher the creation of wealth for a bright future.
2. Covers you for a longer duration
Whether you invest in ULIPs or any other life insurance plans, every investment option provides life coverage. However, the life coverage offered by a ULIP Policy not only safeguards the needs of your family but also allows your investment in equity markets for the growth of money. With the dual benefits of protection and growth, you can protect your family in times of emergency with an equal involvement in the equity markets.
3. Offers flexible options
One of the major ULIP benefits is the flexibility of investment. When you invest in a ULIP Plan, the insurance companies allow the policyholder to opt for switching of funds. Switching funds not only allows you to beat inflation but also maximizes your gains. You can opt for switching between equity funds, debts funds, and balanced funds. For higher ULIP plans returns, opt for an investment in equity funds.
4. Provides tax benefits
In order to financially secure the present and the future of the entire family, a policyholder has to save more money to overcome all the financial emergencies. While there are other ways of doing so, exemption from the payment of taxes allows the same. Investment in ULIPs is eligible for tax deduction up to Rs. 1,50,000 as per section 80C of the Income Tax Act, 1961. Additionally, the sum received on the maturity date is absolutely tax-free as stated in Section 10(10D) of the Income-tax Act, 1961. These tax benefits can be availed by any ULIP policyholder as far as his policy either expires or lapses.
Post the new rules set by the Insurance Regulatory and Development Authority (IRDA), ULIPs have become an investor-friendly option. A ULIP Policy is much more affordable than it was a few years ago because of low costs. Additionally, its tax benefits, lower premiums, and so forth has attracted the interests of many.
Now that you know why a ULIP investment is a must for the financial security of your future, what are you waiting for? Invest in a ULIP Plan as it is a perfect combination of investment and insurance under one roof. While the insurance factor looks after your loved ones, the investment factor allows the creation of wealth in the due course.