A bouquet of Tulips can certainly be considered as a very romantic gift. However, Unit-Linked Insurance Plans or ULIP plans could also be considered as a thoughtful gift. As a matter of fact, having a ULIP under your name is more than just taking out a regular insurance policy for securing your family’s future.
Since ULIPs are associated with equities or market funds, they are more vulnerable to risks. Despite the risk, they tend to have a higher chance of beating inflation in comparison to other investment products (such as real estate or fixed deposits).
Reasons to Invest In ULIPs
Although Term Insurance and Whole Life Insurance are considered as one of the mandatory investments, ULIPs can also be a great way of saving more for the future. Here’s how:
- Before you buy a ULIP plan, you are given complete access to the value of an investment and expected IRR based on 6% and 10% return rates. Moreover, you have access to charge structure for the complete duration/tenure of your policy before buying it. Likewise, other essential information is also shared with you. This shared information includes:
- The annual account statement
- Daily NAV reporting
- Quarterly investment portfolio
With the help of this information, you are kept updated on the status of your investment portfolio. Additionally, the latest NAVs published could be accessed from your provider’s website on a daily basis.
- With ULIP plans, you can make partial withdrawals. This means you can withdraw a specific amount after a period of 5 years from your Unit-Linked account, thus retaining only the stipulated minimum amount. This type of arrangement can be useful, especially in case you are in need of urgent cash influx caused by unforeseen events in your life.
- Such products help in getting your savings streamlined. Moreover, compared to one-time investment products, ULIP plans have lower average unit costs.
- When it comes to coverage, ULIP plans happen to be one of the best solutions. They are great for risk cover and offer various investment opportunities as well as tax benefits.
- For investors who are interested in market-linked growth but do not want to directly participate in the stock market, are bound to find these products most appealing.
- One of the highlighting benefits of ULIP plans is the flexibility that it provides. Most of the ULIP plans offer you complete freedom of choosing (whether high, medium or low) the risk investment options under the same policy.
In fact, as an investor, you are given the choice of picking an appropriate policy based on your risk appetite. Also, you are allowed to switch between the fund options without having to pay any additional charges (but for a specified number of switches). Make sure that you check with your provider, whether or not they offer extra numbers of switches.
- ULIP plans also have the flexibility of choosing the sum assured as well as the investment ratio in the annual targeted premium. Moreover, you have the provision of a one-time increase in the investment portfolio with the help of top-ups, which further allows you to invest in other opportunities.
So, if you are looking for gift ideas for your family, gift them not only a life cover that sustains them during a mishap but also saves enough for improving their standard of living.