Unit Linked Insurance Plans (ULIPs) are popular investment instruments for individuals looking to secure their and their family’s future in every way possible. Starting from acting as an insurance cover for the policyholder to providing substantial returns as an investment instrument, ULIP benefits make it the ideal solution to a whole range of financial problems.
The advantages of ULIP stem from the flexibility it offers investors. Additionally, ULIP tax benefits propel its popularity with individuals looking to save on taxes and create a larger corpus for meeting their future goals, both in the long-term and short-term. Invest 4G, available from Canara HSBC Life Insurance, offers enormous flexibility to customers through customisable plans that allow them to opt for benefits most suited to their requirements.
Read on to learn more about the advantages of ULIPs:
One primary perk of opting for a ULIP is the death benefit that is accessible to dependents upon death of the policyholder. The death benefit ensures that the policyholder’s dependents have access to financial security and can sustain their regular lifestyle, even in the absence of the policyholder.
Both short-term and long-term financial goals require the setting up of a corpus. With a ULIP, policyholders can aim to grow their corpus substantially and meet these goals. For instance, with education costs rising by the day, a ULIP can be set up to start building a corpus to meet the child’s higher education goals, even when the child is very young. ULIP benefits can also extend to saving up for short-term goals such as taking a family vacation to an exotic location far away.
Income tax benefits are a part of the consideration while opting for investment instruments, and ULIP tax benefits make it the foremost choice for such investors. Under the Income Tax Act, both Section 80C and Section 10(10D) offer tax benefits on ULIPs. ULIP tax benefits come into play at the time of individuals paying premiums, on withdrawal of returns from the fund as well as at the time of maturity of the fund.
Investment and insurance are two financial pillars for all individuals looking to protect their financial health and ensure long term financial success. As a result, ULIPs serve as the perfect instrument for such persons. While investing in ULIPs, a portion of the premium paid goes towards ensuring the insurance cover while the rest is invested into investment instruments. ULIPs guarantee flexibility by letting policyholders decide how much of the investment should go towards insuring themselves and how much of it should go towards building their corpus. Additionally, investors can decide the proportions of the instrument they choose to invest in based on their individual requirements. For instance, those looking for low-risk instruments can choose to invest a higher amount towards debt or government securities which do not pose much of a risk. On the other hand, investors looking for higher returns can choose to invest in market instruments such as equities which offer significantly higher returns but are also influenced by market forces. Instruments dependent on market forces are affected by factors such as political or economic instability and a range of other causes. With a ULIP, investors can easily switch between funds based on existing market conditions and their own predetermined goals.
With Invest 4G, available on Canara HSBC Life Insurance, investors can choose to invest their funds across 8 different funds and 4 portfolio strategies, thereby letting them maximise their funds and grow their retirement corpus significantly in a short period of time.
By investing in a ULIP, individuals can inculcate the disciplined habit of saving regularly, which can prove hugely beneficial over the course of their lives. Saving regularly ensures that there is always financial capital to fall back upon, especially during times of financial emergencies.
ULIP benefits are significant, making it a popular tool in investment circles. Canara HSBC Life Insurance offers Invest 4G, a ULIP that offers high flexibility for investors wishing to switch between funds based on changing risk preferences and market conditions.