Top Living Benefits Of ULIP To Achieve Your Life Goals

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ULIPs have an advantage in that they may be flexible and personalised. The flexibility of premium payment is offered by ULIPs. You can transfer your funds back and forth between equity and debt funds. When you need money, you can take a portion out of a ULIP. Determining where to invest also depends on your risk tolerance. There are five good reasons to buy ULIPs.

1.ULIPs offer flexibility

  • Freedom to select your fund option: The majority of ULIPs offer a selection of equities, debt, and balanced fund alternatives. You can invest your money accordingly to your risk tolerance and expected return as a consequence. In order to assist you in getting the required returns, ULIPs also provide you with the option to transfer your money across several funds. 
  • Flexibility to alter the amount you invest in your premium: You can pay a top-up sum with ULIPs in addition to your regular premium. To maximise the rewards on your investment, you might choose this option. You can use a ULIP Calculator to estimate future returns and the value of a ULIP investment.
  • Ability to choose a rider: Riders are optional extras that you can select to personalise your ULIPs and obtain more security. The Unit Linked Accident and Disability Benefit Rider are among the most popular riders. The amount of Life Cover that the family will get in the case of an accidental passing away rises as a result. Additionally, it ensures that your Life Cover will continue in the event of an accident-related incapacity.

2.ULIPs offer transparency

With the aid of the following characteristics, the charging structure of ULIPs is visible and enables you to make wise decisions: 

  • Beneficial illustration: You have the right to request a policy benefit illustration as a customer. You can better comprehend your premium consumption and insurance costs with the aid of a benefit illustration. Important details about potential gains based on the selected Sum Assured and premium are also highlighted.  
  • Key feature documents and product brochures: While benefit illustrations are very helpful in understanding the quantifiable parts of ULIPs, it’s also critical that you comprehend all of the other characteristics and advantages that ULIPs have to offer. To learn more about the specific benefits of your policy, see the product booklet. You will receive a key feature paper outlining the major aspects of the plan as soon as your policy is issued. 
  • Free look window: The vast majority of life insurance policies, including ULIPs, have a free-look period. If you are unhappy with your insurance policy, you normally have 15 days to cancel it. After subtracting the necessary fees as specified in the policy, the entire premium will be returned to you. 

NAV: Net Asset Value: It’s crucial to regularly check on how your coverage is holding up. The company publishes daily NAV updates to assist you in doing this. The NAV is the cost at which a fund’s units are bought. You can see how well your investments are performing by looking at changes in the NAV value (increases or decreases). 

3.ULIPs promote savings with goals 

You must save money if you want to achieve your major life objectives, like purchasing a home, paying for your children’s higher education, or a happy retirement. One of the most convenient methods to achieve this is through ULIPs or long-term systematic investment options.

ULIPs support disciplined investing because they are made to help you achieve important financial objectives. The estimated value of your ULIP investment can be calculated using a ULIP calculator based on the premiums, tenures, and other information you enter.

4.ULIPs provide tax advantages 

ULIPs are effective tax-saving tools that provide unrivalled ULIP tax benefits throughout the course of your policy: 

  • Stage 1: Entry advantage – In accordance with Sections 80C and 80D, you obtain tax benefits on your premium payments. 
  • Stage 2: Earnings advantage – Your investment’s returns are not taxable.
  • Stage 3: Exclusive switching advantage – You can make absolutely tax-free debt-equity switches.
  • Stage 4: Exit Advantage – You can make debt-to-equity switches totally tax-free. 

These ULIP tax benefits are very advantageous when it comes to savings.

The tax benefits mentioned in the article may not apply if you opt for the new tax regime since many tax exemptions and deductions have been scrapped within the new regime. They are also subject to any changes in the law.

5.ULIPs Provide Liquidity

A ULIP permits partial withdrawals of funds after the 5-year lock-in period, which is one of its characteristics. With this service, you can access a portion of your insurance payout when you need it. 

However, it is advised to avoid withdrawing from your ULIP unless absolutely necessary in order to assist you in reaching your long-term financial goals. Your long-term goals, which may include paying for your child’s education, purchasing a home, and more, should not be disturbed unnecessarily.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale. 

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