What are the Benefits of Investing in a Unit Linked Insurance Plan?


Financial planning is important for everybody from all stages of life. Today, having a good life not only involves paying your bills, but also making sure that you make the best of what you earn. This means spending your money wisely. Usually, many assume that it’s just about spending less money. But there is much more to financial planning. A crucial aspect of financial planning is how to make your money work for you i.e. investing it in the right places!

With so many options available in the market, it is extremely difficult to pick one. There is no one option that is best for everybody. Hence, you have to know yourself in order to identify the right place to start investing. More precisely, you need to know your financial capabilities and goals. If you are some one that wants to have a bit of investment and financial security in one option, you should get a Unit-linked insurance plan.

Here are some of the benefits of investing in ULIP:

  • Fund management

The thing about investment and insurance is that not everybody knows how to do it properly. It needs a lot of research. But, we might miss out on various aspects while doing the research on our own. Hence, in this case, you would need professional assistance. By investing in ULIPs, you also get access to fund managers. These managers are personnel that specialize in putting your money in the right investment opportunities. Therefore, even if you are confused how to go about investing in ULIP funds, these managers can help. They work with teams of analysts, researchers, economists along with other professionals in finance in order to assist you in making a smart investment decision.

  • Combined benefit

ULIP is essentially a mixture of insurance and investment. This way, you don’t have to separately spend money on insurance and investments. With one product, you get sufficient life coverage, plus you get to invest your hard-earned money into market-linked funds. Thus, you do not have to sacrifice one thing for the other. You can ensure your family is financially protected and at the same time you get to create a separate set of finances for your future. You can always buy another insurance plan that purely focuses on protection like a term plan. But even if you don’t, your family is still protected.

  • Flexibility

When it comes to insurance, there is often not a lot of flexibility. While there are some preferences you can get, the rems and conditions of coverage are often decided by the insurance company. This includes inclusions, exclusions, premium, and the level of coverage. Hence, ultimately, there is someplace where you would have to compromise. Moreover, after you have purchased an insurance policy, you have to stick with it until you find a better one. Hence, you can be stuck with less than ideal coverage for possibly a hefty premium.

On the other hand, ULIP benefits include offering policy holders a great deal of flexibility. Let’s assume you have a ULIP plan with the tenure of 5 years. Many insurance providers offer plans that allow you to change the amount designated as cover in the plan. You can increase or decrease depending on the situation you make the change for. ULIP plans work through units. When you pay your premium, you purchase a fixed set of units. You can then segregate these units into coverage or investment. Hence, if you need to put more units into investments, you can take them out of your coverage and do so. Moreover, you can also get more units through top-up plans.

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