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.
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.
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.
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.
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. If you choose to invest in the Canara HSBC Oriental Bank of Commerce Life Invest 4G, 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.
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.
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.
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.
Take, for example, the Canara HSBC Oriental Bank of Commerce Life Invest 4G plan. The Invest 4G plan is a protection and savings oriented tool that not only covers your family against eventualities but also helps you gather wealth for your life goals. You can choose from 7 different funds, as per your risk appetite and investment horizon. It comes with a minimum amount of charges, and even offers the option of return of mortality charges upon maturity. On top of this, it also offers Loyalty Benefits and Wealth Boosters to maximize your earnings. Unplanned contingencies? No stress! It also offers you the benefit of liquidity through partial withdrawals.
Gift your family an Invest 4G plan that protects them, fulfills their dreams and assures them of safety and stability, all at once!