There are multiple wealth creation options that you can check out these days. However, what if you desire a mix of investments and financial safety for your family through insurance? This is where ULIP plans come into the mix. They are excellent choices for growing your money while keeping your family safe with handsome coverage simultaneously. This dual benefit makes ULIPs extremely attractive options for your portfolio.
What are the Long-Term ULIP Benefits?
ULIP plans can help you grow your wealth over the long haul due to two primary reasons. The first one is what we know as compounding. In this case, it is an excellent phenomenon where your investment starts generating returns, and then the se returns are reinvested to generate further gains. If left undisturbed, the whole amount builds up into a sizable corpus after a period of time, let’s say 10-15 years or more.
The second reason is that ULIPs offer market-linked returns. Yes, risk and volatility are factors in the equation. However, one factor that makes them stand out is fund-switching and the choices that you have at the beginning of the policy. You can thus first choose the funds to invest in at the start, i.e. equity, debt, or even hybrid funds. This can be done based on your investment horizons and risk appetite. Now, you can always review your portfolio and change funds based on market conditions and fluctuations and changing life goals. Fund switching is often free up to a specific limit annually, although charges may apply beyond that.
The basic premise, however, remains the same- market-linked returns are likely to perform better over the long term. This is because you can overcome temporary fluctuations and volatility However, this depends on the market’s performance and fund selection. You can thus count on these ULIP plans to save enough money for retirement or even to buy a house in the future. Many choose them to save money for their children’s higher education or other such big-ticket financial goals. What’s more, the tax deductions that you get up to ₹ 1.5 lakh on your premiums (subject to conditions) will also help you save more eventually.
ULIPs Also Offer Financial Safety for Your Family
Another advantage of ULIP plans is that you can flexibly customise your premium payment frequencies and even increase your investments with the passage of time, subject to the terms of the policy. What’s more, there is the assurance of life coverage, where the insurer will pay the fixed sum assured or the fund value to your nominees in case of your unfortunate demise within the plan tenure. This ensures that your family members will always have a financial cushion should something happen to you within this period. At the same time, while getting life coverage, you will always have sizable maturity benefits to look forward to down the line. This makes ULIP plans effective options for beefing up your financial portfolio and building wealth to meet specific future goals. Compare plans offered by leading insurers and finalise your decision today.