Not Able to Save Enough? Here’s How ULIPs Can Help

You leave no stone unturned to excel in life and secure your future. Right from your schooling days, you study hard to get a head start for better career opportunities. When you start climbing the corporate ladder, you work with dedication to reach the top with the motive to secure your retired life and provide for your family’s financial goals. However, apart from working sincerely, it is essential to make smart investments that help you grow your money.

It is crucial to have a life insurance policy to cover the financial risks that your family members may face if something untoward happens to you. Unit-Linked Insurance Plans (ULIPs) are one of the best wealth-creation tools investment avenues available in the market. They also provide you with life insurance coverage. With ULIP funds, you can avail of the dual benefits of insurance and investment. The advantages and features of a ULIP investment plan can help you plan for securing a better retirement life. 

Plus points of investing in ULIP

Here are a few beneficial features of putting your funds in ULIP.

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Helps earn better returns 

The main objective of any investment is to earn lucrative returns. As a part of the premium, you pay towards your ULIP is invested in capital markets, there is a significant chance that you can reap higher returns. Moreover, the average returns offered by ULIP are more than other investment instruments like bank fixed deposits, Public Provident Fund (PPF), and pension plans, among others.

Here, the risk is limited as compared to investing your money directly in the equity market, as ULIP allows you to diversify your investment. In the case of ULIP, you have the option to invest in equity, debt, or a combination of both funds that can let you regulate the risks of the market volatility. Besides this, professional fund managers handle your funds, so your chances of earning higher returns are brighter.

Invest your money in diverse funds

The risk-bearing appetite of investors is different from one another. While investing in ULIP, you can diversify your investments based on your risk-taking capacity. You can invest your hard-earned money in various types of funds, like:

Equity fund: Here, most of your money is invested in the equity market, which is a risky alternative. The returns on investment vary, as it is entirely dependent on the performance of the market. 

Debt fund: Here, the majority of your money is invested in less risky government securities and bonds. The returns are low when compared to equity funds.

Under the various categories of ULIP funds, several fund options are sub-categorized depending on the type of company and sector, among other factors. Opt for a fund that can meet your risk-taking appetite.

Provides the flexibility to switch funds 

Fund switching is one of the best ULIP benefits. ULIP permits you to switch from one fund to another. It will enable averting the risk associated with a volatile market and protect your investment by transferring your money from equity to debt funds. With this, you can have better control over your assets and earn a substantial return. 

Offers top-up plans

It is also one of the essential ULIP benefits that you should consider. If you have surplus funds in the future during your plan’s tenure, you can invest in any of your existing fund options to maximize the returns on investment. The charges of top-up plans are anywhere between 1 to 3 percent, which is quite low.

Your retirement life is a golden phase of life, which you should enjoy, instead of worrying about income. During retirement, your income will cease, but the expenses will mount. ULIP funds help you build a corpus for the future, as you can grow your money substantially. Besides this, you can get the advantages of higher returns, tax benefits,  the power of compounding, and asset allocation. 

Photo: tomorrowmakers.com