Getting started with ULIP?

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With the increasing rate of inflation, the gap between income and expenditure is increasing each year. People who rely entirely on their salaries are often hit by financial insufficiency, mostly in an emergency situation or when it comes to fulfilling major financial goals. But by making wise investment decisions, you can lead a stress-free life and create wealth for future goals. All you need to do is choose an investment plan that provides a financially secured future while taking care of your current financial needs.

Choosing the right investment instrument is the first important step towards wealth creation. While there are numerous investment mediums available in the market, as a beginner investor it is recommended that you stick to either lower risk options or balanced options. Unit Linked Insurance Plans also known as ULIPs are a type of insurance that are market-linked investment schemes combined with protection.

How does ULIP help in wealth accumulation?

Investment is all about making the right decisions. You just have to keep paying your premiums regularly and see your wealth grow. Here are some ways in which ULIPs which can help you with wealth accumulation and management.

  • ULIP for child education: The price of education has constantly been increasing. It is difficult for parents to fund their children’s education. However, you can avoid such situations by investing in ULIPs, which offer numerous long-term benefits.
  • ULIP for retirement planning: ULIP can also serve as a good investment option for your retirement goals. Since investing in ULIPs is more for long-term goals, you can expect a good corpus accumulated during your retirement stage.
  • ULIP for wealth growth for your goals: ULIPs are ideal for individuals between the age group of 25-35. You may have various financial goals like buying a new house, starting a business, a new car and so on. These goals require long-term financial planning. Beside fulfilling long-term investment needs, ULIPs also provide tax benefits and life cover.

Things to consider before you begin investing in ULIPs

  • The duration you wish to stay invested: ULIPs are long-term investment products. You have a 5-year lock in period and it is recommended that you stay invested for atleast 10 years so that the fluctuation in the market stabilizes and you also benefit from the power of compounding.
  • Risk appetite: If you have low-risk appetite, you can first invest in debt funds. The risk and returns both will be marginal. However, gradually when you evolve as an investor, you can consider investing in equities.
  • Fund performance: Always invest in funds which are high-rated. This will ensure that your investments grow at a certain pace without any challenges.
  • Tax benefit: This is the best feature of ULIP. It provides tax benefits under section 80C and also the returns will be tax-free.
  • Charges and allocations: The new age ULIP has zero policy or administration charges. It also provides additional allocation at regular intervals.

Getting started with ULIP is quick and easy; you can do it in a single click!

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