Why Is A ULIP Plan A Must-Have In Your Investment Portfolio

For investors who wish to leverage the dual benefit of market-linked returns and life insurance cover, investing in a ULIP plan (unit-linked insurance plan) is the best deal.

When it’s your first hand at a new recipe, you know that you will get the desired result only if you use the ingredients in the right proportions. The same principle applies to your investment portfolio as well. If you wish to get maximum financial returns, it’s not just essential to invest in any of the investment policies availablebut to have the right mixture of debt and equity investments. A single asset investment can never deliver the same results when compared to a well-balanced investment mix. Most people play it safe by making low-risk investments, such as putting their money into traditional endowment insurance policies or bank fixed deposits. Your asset allocation must be done responsibly as it has a direct impact on your investment returns.

For investors who wish to leverage the dual benefit of market-linked returns and life insurance cover, investing in a ULIP plan (unit-linked insurance plan) is the best deal. Let’s understand what ULIP is and why you should consider investing in one.

In recent times, ULIPs have emerged as an attractive investment product, offering the perfect blend of investment and life insurance.In simple words, the investor will have to pay a monthly or yearly premium and a small portion of that money will be directed to provide life insurance and the remaining money will be invested in the market.

These days, more and more investors are keen on investing in some of the best ULIP plans offered by various investment companies for the following reasons:

  • Life Insurance + Investment returns: A ULIP plan is the only investment instrument that provides wealth growth through market-linked returns along with a life cover. It serves as a two-in-one plan.
  • Various Funds to invest in: There are several funds under ULIP in which you can invest in. These funds have varying degrees of risk and returns. There are equity funds, debt funds, balanced funds, etc. Each has its own set of advantages for the investor depending on their risk profile.
  • Option to switch funds: It’s not just the multiple variants but the freedom to seamlessly switch between them at any of point of time that makes ULIP plan an attractive investment product for most investors. Depending on the vagaries of the debt/stock market and the risk appetite of the investors, one can choose to switch between several ULIP plans.
  • Fund is managed by expert fund managers: ULIPs also offer the rupee cost-averaging benefit to its investors. According to this, individuals can invest their money over regular time intervals and not worry about the fluctuations in the stock market. The funds are managed by expert fund managers and even a new investor can invest in ULIPs even if he has limited understanding of working of stock markets. One can also do a one-time investment if they have surplus money to invest in a particular year which they wish to save for the future.

In a nutshell, a single ULIP plan can take care of an investor’s future financial goals at different stages of his life. It offers extreme flexibility and transparency which is crucial for anyone who invests their hard earned money in a hope to receive the desired returns

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