Why A Unit Linked Plan Is A Must For Stable Fund Generation

2024-08-02

873 Views

Begin securing your future

Full Name* Please enter correct name Please enter the Full name

Mobile Number* Please enter valid mobile number Please enter Mobile Number

Email* Please enter valid email Please enter Email

I agree that even if my contact number is registered with NDNC / NCPR, I would still want the Company to contact me on the given number and email id for the clarifications/product information sought by me and agree that I have read and understood the Privacy Policy and agree to abide by the same.

...Read more Consent is required

Locate branch

Resume journey

Pay Premium

Live Life More Confidently

Get best insurance from our experts

Name is required Name should be Valid

Mobile Number is required Mobile Number should be Valid

Email is required Email should be Valid

DOB is required DOB should be Valid

Annual Income*

< 3 3-5 5-7 7-10 > 10

Annual Income is required

Please tick to proceed further.

Thank you for your interest in our product. Our financial expert will connect with you shortly to help you choose the best plan.

Whether you are a first-time investor or a veteran, striking a balance between stability and higher returns is always an exercise. While debating this, you are sure to come across the term ULIP multiple times. Here's why ULIPs are always been considered one of the best-balanced investment options.

What is a ULIP?

A Unit Linked Insurance Plan (ULIP) is a unique insurance-cum-investment tool. A part of your premium payment is utilised for a life cover. The other part is invested in equity, debt, or balanced funds as per your choice and risk appetite. ULIPs are known to be one of the ideal investment tools because they eliminate the need for a separate insurance policy, amongst scores of other ULIP advantages.

Why ULIPs?

Financial discipline

One of the major benefits of ULIP is that it comes with a 5-year lock-in period. Generally, even if you choose to surrender your policy within this period, you will receive your surrender value only after the lock-in period is over. Knowing this is bound to make you extra careful about your premiums, inculcate a strong sense of financial discipline and streamline your savings in order to reap ULIP advantages in the long run. This also makes them excellent funds for medium to long-term financial goals.

Flexibility to switch funds

Another important part of ULIP advantages is the freedom to make switches in your ULIP's investment component. Depending on how your fund is performing, you can choose to switch it as you please, whenever you please. Usually, there are no switching charges for a certain number of switches; beyond which a nominal fee is charged.

Flexibility in premium payments

ULIPs are known as highly flexible investments not just because of the flexibility to switch funds, but also because of the flexibility they offer in premium payments. You can opt for a single, lump sum premium, or regular yearly premium, or even half yearly, monthly or quarterly payment modes. This makes it a lot easier to maintain financial discipline without compromising on financial needs and expenses.

Balanced investment

Another one of the key benefits of ULIP is that it offers you a range of funds across equity and debt. You can choose to take risks with an equity-heavy portfolio, or stay safe with a debt-oriented one. You can even balance the two to take calculated chances. This assists you in securing the highest possible returns on your investments.

Easy to track

Generally, when you opt for a ULIP, your insurance provider will supply you with a fund manager, so that you don't have to take on the entire burden of managing your funds. You can always turn to your manager for switching funds or any other needs. However, you can also do your own homework. The fund is divided into units called NAVs. You can keep track of your fund value through NAVs. If you feel that your fund is not doing too well, switching or redirecting your investment is a breeze. This way, you ensure that the payout you receive upon maturity is substantial.

Minimal charges

Previously, there were heaps of charges associated with ULIPs - administration charges, mortality charges, switching charges are more. However, one of the benefits of ULIP, in recent times, has been the discount on charges offered by multiple insurers. Due to rising demand for ULIPs and increasing competition, providers have started offering investors substantial discounts on such charges, in order to help maximize their returns. The most notable development has been the introduction of the return of mortality charge. The amount of mortality charges deducted in the policy term is added to the fund value upon maturity.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.