How to select the Best ULIP?Posted by ankita on March 1st, 2017 Unit Linked Insurance Plans or rather ULIPsas they are called offer dual benefit of life coverage and market-linked investments. The premium paid under ULIPs are divided in two parts, the first part goes towards the life cover and the other gets invested in funds such as equity, debt or balanced funds. The investor can choose to invest among a range of funds as per the income source and risk appetite. The premium under ULIPS will be directed to these funds. A couple of years ago ULIP was treated as a costly product because of high charges associated in maintenance and fund management. But, after, theafter the revision of products by IRDAI in 2010-11, ULIP has proved to be the best investment plan in recent times. It is now more customer friendly and has low maintenance costs. High agent commission and charges were capped making ULIPs more viable and attractive for customers. Generally, financial advisors recommend separating the life cover component with the investment and hence, suggest buyers to go for pure life cover and invest in equity funds to meet their financial goals. But, if one is convinced to keep the two goals together then you can go ahead with the ULIP investment. A ULIP can be treated as a long term investment plan where the lock-in period is generally from five to eight years that helps you earn good returns. Ideally, ULIPs held for more than 10 years give higher profits as compared to ULIPs held for smaller period of time. Investors might have to struggle to get the right information about the type of ULIPs available, funds choice, charges associated with it, etc. However, these information are available on an insurance company’s website along with the option of buying ULIP online. One of the biggest advantages that ULIPs offer is that whatever be your financial objective, you can choose from a diverse portfolio: equity, debt and highest NAV guaranteed plans.
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