Most of us have different long-term goals and dreams to achieve, and they seem to be the declaration of our success. Like, you might dream of buying a luxury car, a dream home, etc. Nonetheless, over a while, the long term goals might seem unachievable due to the limited fund availability. However, as there is a practical solution to most of the problems we face, similar is the case with achieving your long term goals.
Among the various investment options available, you can choose one that will help you accomplish your goals. Eventually, after a number of years, you will have a corpus of funds to fuel your long pending dream. This corpus will also act as a contingency fund, i.e. you will be able to use this amount to deal with untoward events. To have a multi-faceted life insurance product along with investment benefits, you can apply for the best ULIP plan in India.
Before you invest your hard-earned money in any investment plan, you should have a fair understanding of the same. Therefore, read further to know what is ULIP plan and the benefits it will deliver.
In layman’s language, a ULIP plan is an exclusive way of dabbling in insurance and investment together. Depending on your priorities and goals, you can split your investment amount between life insurance and investment in market-linked securities. Apart from this benefit, there are many other lucrative benefits provided under a ULIP plan.
However, it is essential to know about the parameters to consider before investing in a ULIP plan in India. Find them below:
- Insurer’s Credibility
Before choosing the insurance provider, it is essential to carry out basic research about the provider. It is important to check through their policy’s inclusions and exclusions, claim settlement ratio, customer reviews, etc. This will give you a fair idea about the insurer’s credibility.
- Look Out For Charges Involved
If you want to invest in the best ULIP plan in India, look out for a number of charges associated with the same. These charges are usually allocation charges, administration charges, surrender charges, switching charges, etc. Though the Insurance Regulatory and Development Authority of India (IRDAI) has issued guidelines to lower these charges and capped them at 3%, it is preferable to check these across the providers.
- Opt for Maximum Sum Assured
Depending on your financial capacity, it is advisable to choose for as high sum assured as possible. Generally, if you opt for a higher sum assured and keep your amount invested for a longer period of time, you can earn unexpectedly higher returns.
- Choose Your Risk Appetite Wisely
It is important to analyze and evaluate your risk appetite after calculating your regular and expected expenses. The premium amount should be manageable and not seem like an additional burden.
- Understand Premium Payment Options
You get a number of premium payment options when you apply for a ULIP plan. You can choose to pay the premium amount monthly, quarterly, half-yearly or annually. It is advisable to spread your premium payment to avail of more benefits.
How to Achieve Your Long term Goals with a ULIP Plan?
- Analyzing and Planning Your Long Term Financial Goals
As the first step, you should analyze and organize your long term and short term financial goals. Your long term goals might include buying a house, your child’s education, retirement planning, etc. Therefore, it is essential to work out your priorities and start investing your money in the best ULIP plan in India to accomplish your goals conveniently and in a planned manner.
- Customize Your ULIP Plan
After evaluating the goals, you can customize your ULIP plan depending on your risk appetite and other factors. Also, choose your sum assured and tenure carefully so that you can pay your premium with ease at every interval.
- ULIP: Wealth Booster for Long Term Investors
Usually, ULIP Plans are wealth boosters for the people who stay invested for a considerable period of time. The insurance provider will also allocate bonus to you, provided you invest continuously (without any fail), and the investment tenure is more than 5 years. Besides, you also earn from the investment in the market securities.
- Opportunity to Passively Invest in the Stock Market
Despite minimal knowledge about the stock market, you can participate and leverage the benefits of investing in the stock market with the help of experts having in-depth knowledge about the market conditions. Find below a few advantages of buying a ULIP plan:
- Automatic management of your asset allocation
- Lower investment risk
- Safeguards your portfolio value as you approach towards reaching your goal
- Safeguards the returns you earn on your investment
- Avail Triple E-E-E Benefit on ULIP plans
If you invest in a ULIP plan, you can avail of the triple E-E-E (Exempt-Exempt-Exempt) benefit on your investment, withdrawals and returns. This is covered under Section 80C and 10(10D) of the Income Tax Act, 1961. Also, in case of your untimely demise, the financial compensation made to your beneficiaries is also tax-free.
To conclude, you can achieve your long term goals with ease if you invest in the best ULIP plan in India. Apart from all the parameters mentioned above, it is important to choose your insurance provider wisely so that you can be sure about the uninterrupted services and the benefits throughout the tenure of your policy.