Working from home during the pandemic has become the new norm these days. It is common for people to think and figure out how things will be when this COVID-19 crisis blows over.
The world is currently witnessing events of an unpredictable nature, where it is essential to stay calm and handle the things smartly. The same holds true for maintaining finances as well, especially at a time like this when things are so uncertain. Experts suggest that it is crucial to protect your finances and think wisely before doing anything with your investments.
The most crucial thing is to remain calm and study your financial portfolio objectively. At the same time, you must consider financial planning if you want to secure the future of your loved ones. With so many financial products and volatility in the market, it can be challenging to select the right one.
However, if you are clear about your objectives, then it becomes easy to build your financial portfolio. For instance, if you want a pure life insurance product that is risk-free, then you can opt for term life insurance. Similarly, if you want to have a versatile financial instrument that gives you the benefit of life insurance and investment, then you should go for Unit Linked Insurance Plans (ULIP).
A ULIP plan is the best bet if you want to purchase an insurance and investment plan, then. On the one hand, you pay the premium to get the protection of life insurance cover. On the other hand, you can invest in the choice of funds as per your risk preference. In this way, you not only secure your family’s financial well-being but also grow your wealth in the future.
Moreover, ULIPs provide the flexibility to move your money between equity and debt funds. But most importantly, you can make partial withdrawals whenever you need it.
Apart from generating inflation-adjusted returns, you can also benefit from its tax-saving potential under section 80C of the Income Tax Act.
Let’s talk about some more benefits of ULIP to help you start investing in them.
Easy to Choose your mix of investment funds
Different investors have different risk appetite. As such, you have the option to mix the funds as per your preference while investing in ULIP. Beingrisk averse, you can choose to invest in debt funds.
People with high risk-taking ability can invest in equity funds, and moderate risk-takers can balance their funds to spread the risk. This is especially helpful during times like these when the market is exceptionally inconsistent, and everyone wants to secure their investment.
Flexibility to switch between funds
ULIP also allows you to switch between funds based on your market outlook. You can easily choose from a wide range of ULIPs to balance your risks reasonably. The flexibility that you get in a ULIP plan is not available in other investment options.
For instance, you can choose to invest in debt funds for now, and when the market picks up, you can switch back to equity funds. It is a long term investment plan that provides good returns on equity funds if you stay invested for a long period.
If you want to achieve long term goals, ULIPs are often considered to be a wise option. They leverage the power of compounding to offer better returns over a longer time with a minimum lock-in period of 5 years. If you exit the policy before the five years, you still receive a lot more in ULIP than you will in any other investment plan. Besides, wealth creation happens much faster in ULIP than fixing your money in FDs.
At a time when the incomes have already shrunken, the tax saving that comes with investing in a ULIP plan can give you breathing room by increasing your income. As per section 80C , you can save up to one and a half lakh rupees on the premium paid towards insurance products. So you not only get to save money but also watch it grow over the years.
Get A Comprehensive Life Cover Under ULIP
ULIP offered by many insurance companies fulfil the dual objective of investment and protection. They are also transparent in their transactions that enable you to make informed decisions. As a customer, you can ask your asset manager to explain the benefits over a period of time. You can also understand how your premium us being used and the charges applicable during the policy tenure.
But most importantly, you can benefit from the free look period, a 15-day window, that allows you to return the policy for a full refund if you are not satisfied with it. Use that time to understand all the benefits and applicable charges to make a well-informed investment decision.
ULIPs are the best investment option for your long term financial objectives. However, be sure to check the performance of respective funds before investing.