There are many ways to save money, but if you are looking for an investment that will make you money right away, it’s important to know what options are available.
Investing is a way to save money over the long term, but what if you need access to your funds right now? Maybe you just took advantage of a promotion and require proof of your investment before the tax year’s end or inherited money from a severed relative. Regardless of the reason, there may be times when you need an investment option that will save you money immediately.
Unit linked insurance plan (ULIP) provides this benefit. A ULIP plan combines life insurance with mutual funds, allowing investors to build wealth over time while still having access to their money whenever they need it.
What exactly does ULIP mean?
A ULIP or Unit Linked Insurance Plan simultaneously offers life insurance and investment benefits. ULIP premiums are split into two parts. You will receive one part of the money for your life insurance, and the other part will be invested in the fund of your choice.
ULIP meaning is investing in a plan that provides flexibility in investment planning. Since ULIP plans have equity and debt components and options to switch as market conditions change, they help you safely manage your fund. The ULIP plan also protects your investments by providing life insurance coverage and a financial safety net.
Benefits of ULIPs You Should Know
Unit Linked Insurance Plan is an excellent way to save for the future, and they offer many advantages to its policyholders. ULIPs provide the following benefits to their policyholders:
- Maturity benefits – Policy owners can receive the accumulated funds as the maturity/survival benefit of a policy if they survive the policy’s maturity period. A maturity benefit is equal to the fund value of the policy.
- Death benefits – During the policy’s term, if the policyholder passes away unexpectedly, the death benefits are paid to the registered beneficiary of the policy.
- Tax benefits – A ULIP is an effective tax-saving tool. Section 80C of the Income Tax Act allows the deduction of the premium you pay for the policy.
- Long-term investment benefits – In the long run, the longer the investment horizon, the more you are protected from price fluctuations. A long-term investment in the market can help you achieve higher returns and cope with market volatility. Investing in ULIP means that you can receive high returns on your investments for the long term.
- Withdrawal benefit – A ULIP allows investors to withdraw part of their funds in an emergency. Depending on the emergency, investors can withdraw funds up to a certain amount after a fixed period.
Key feature of ULIPs
ULIP meaning is having a plan of insurance and investment policies that provide dual benefits. You will gain life insurance protection, and you will be able to achieve your financial goals over the long term.
Here are some of the critical features of ULIPs:
- A single plan for investment and insurance benefits – The goal of ULIPs is to maximise your wealth appreciation on your investment through a variety of market-linked instruments and returns. The ULIP plan also covers you and your family with comprehensive life insurance coverage throughout the policy’s life.
- Diversify your fund options – Throughout the Policy Term, you can freely select between equity and debt funds under your ULIP plan. A fixed number of switches can be made without additional charges within a financial year.
- Redirection of premiums – You may switch between different available fund options when investing in a ULIP plan. To redirect the premium, you must provide your Policy Number and indicate which fund(s) you wish to use. A percentage can also be specified concerning each fund.
- Partially withdrawing – The initial lock-in period for ULIP plans is five years. After the lock-in period, you can withdraw a fixed number of partial amounts from the accumulated fund value without incurring any additional fees.
Why buy a ULIP Plan
If you want to grow your savings through the use of market-linked funds while also ensuring that your family is protected with a financial safety net throughout their lives, a ULIP plan in India is a viable option.
You can make a smart decision by investing in ULIP plans for the long term due to the following reasons:
- In the long run, ULIP meaning is investing in the plans can provide healthy market-linked returns.
- ULIP plans allow you to change your fund allocations, protecting your money from market volatility.
- According to prevailing tax laws, you can save significant tax amounts on both your investments and maturity/death benefits.
- Ensure that your loved ones are protected with a robust insurance policy.
ULIP Plan provided by Canara HSBC Life Insurance
Online ULIP plan – Invest 4G Plan
Invest 4G Plan, a new age ULIP from Canara HSBC Life Insurance, is available online. Investments in this category are wise for young investors with long-term financial goals. You can boost your wealth and build loyalty with zero-commission investments. Invest 4G Plan offers better returns than other investment options because of its minimum charge structure.
The following are the key benefits of this ULIP plan:
- Fund options can be switched and redirected as needed
- Withdrawal in part
- There are eight fund options and four portfolio strategies to choose from
- Loyalty and Wealth Boosting
- At maturity, mortality charges are returned
When you invest in Unit Linked insurance plan (ULIP), you have a plan that provides both life insurance and financial goals. In addition, it allows you to move between different types of fund options based on market fluctuations while also taking into account your changing risk appetite.