While going through the vast information available about everything, sometimes, we miss out on the crucial and useful information about certain things. Also, it is challenging to pick up the important and relevant information. Similarly, with a number of insurance providers and insurance plans available, it is difficult to choose the right one for yourself.
A particular insurance plan might not work the same way for every individual. But what if there is a life insurance product that might work for most of us? It is Unit Linked Investment Plan (ULIP). Under this, you can benefit from investing in market-linked securities like debt and equity and get life cover, which is their significant benefit over traditional wealth creation tools.
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Nonetheless, apart from the ULIP full form and its basic definition, there are a number of interesting and uncommon facts that you need to know about ULIP plans.
Uncommon Facts About ULIP Plans
- Fund Switching Option
With the fund switching option available under ULIP plans, you can switch your funds invested in the market amongst different securities, such as debt, equity etc. This majorly depends on the purpose of investing. On the basis of purpose, we can divide this into two:
- Life Stage Based Fund Switching
As the risk appetite changes at every stage of life, so do your investment preferences. Like, when you are young, you might be ready to take higher risk for higher benefit and deviate a major proportion of your funds towards equity, which is comparatively risky. Whereas, with your increasing age, you might prefer to invest in instruments, like debt, as they provide you with the benefit of stable returns and lower risk.
- Fund Switching To Maximise Profits
Under this, you switch your funds depending on the dynamic market conditions and maximise your profit. Like, you might switch your equity-oriented funds to debt or vice versa.
- Types of ULIP Plans Available Depending on Your Purpose
There are different types of ULIP plans available. Before you choose one of the best ULIP plan in India, it is essential to know all the types of plans available so that you make the right choice.
- ULIP Plans for Retirement
Under this, you need to pay the premium during your policy’s tenure. At the end of the tenure, you will receive an accumulated amount, with which you can live a financially independent life post-retirement.
- ULIP Plans for Wealth Creation
If anyone wants to create a passive income source, investing in a ULIP Plan is one of the best investment options. You just need to pay the premium at regular intervals during your policy’s tenure. If you choose a reputable insurance provider, their experts provide you with the best suggestions depending on the market condition.
- ULIP Plans for Children
Everyone wants to provide their children with the best education and facilities. And, if you invest in ULIP Plan for children, you can financially secure your child’s goals and assure him a secured future, even in your absence.
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- Tax Benefits
If you invest in a ULIP plan, you can avail of tax benefits at all three stages, i.e., investment, earning, withdrawal under Section 80C of the Income Tax Act, 1961. Therefore, it is one of the profitable investment options.
- Stretching the Maturity Date
Usually, it is advisable to choose investment options with flexible terms and conditions, such that you can make changes depending on a number of factors. As the ULIP Plans are linked to the market movement, it is important to have the flexibility of the maturity date, as you might have to withdraw the amount when the market is at low levels and incur the loss. Instead, you can defer the maturity date and withdraw your amount when the market conditions improve.
- Receivable Amount Upon Death
When you invest in a ULIP Plan, and something unfortunate happens to you, your beneficiaries will receive the higher amount of the two, i.e. sum assured or the fund value. Therefore, it is advisable to choose a higher sum assured, such that in case of your untimely demise, your family can have a higher amount.
- Partial Withdrawals
Apart from all the other benefits, you can make partial withdrawals during the policy’s tenure after the lock-in period of 5 years. This way, you can be worry-free about the fund requirement for emergencies. The insurance provider might just levy a charge for the same.
Nonetheless, you should be careful about your withdrawal amounts, as withdrawing excessively might lead to the termination of your policy. The amount left after withdrawals should at least cover the cost of your ULIP Plan.
Lastly, to avail of maximum benefits and enjoy favourable terms and conditions, it is advisable to choose one of the credible insurance providers, like Max Life Insurance. They provide tailored plans depending on the client’s specifications.
Besides, they have a pool of experts who help earn maximum returns from your market-linked securities, as they are well-versed with the market movements. These insurance providers also have dedicated customer care executives to help their clients, if they face any issue while signing up or throughout the tenure.