Why ULIP Is an Attractive Investment Option During COVID-19 Times
The widespread of Coronavirus (COVID-19) has taken the world by storm. This deadly virus has hampered the health and well-being of people and affected the economic conditions of many countries across the globe.
As it is difficult to predict when this pandemic will end, it is vital to stay safe and manage things wisely. The same goes for handling your finances, as there are numerous job losses, businesses have been slow, and the expenses are continually mounting. Therefore, it becomes essential to thoroughly study your investment portfolio and plan your finances in such a way that can help you secure your monetary future.
Investing in a life insurance plan and an investment instrument that can help you grow your finances is the need of the hour. Unit-Linked Insurance Plan(ULIP) is one such financial product that can solve the purpose of insurance and investment. If you are still wondering what is ULIP, then read on.
ULIP is a type of insurance policy that also has an investment component associated with it.ULIP is an attractive investment option, especially during the COVID-19 scenario.
Let us understand how ULIP investment can help you grow your wealth and build a corpus for a better financial future.
Option to invest in the fund of your choice
The financial aspirations and risk-bearing capacity differ among people. One of the significant advantages of investing in ULIP is that it allows you to invest in the type of fund that can meet your financial needs and risk-taking ability. You can invest in equity funds if you have a high risk-taking capability, whereas you can put your money in debt funds if you do not want to take any risks. Besides this, you can invest in a combination of equity and debt funds if you can take moderate risk. The capital market is fluctuating and inconsistent. During these uncertain times, investors are trying hard to safeguard their investments. So, debt funds can be an ideal option.
Flexibility of switching from one fund to another
With ULIPs, you have the possibility of transferring your investments among different types of funds based on the market’s performance. When the market is at the peak, you can switch from debt to equity funds, and if the market is bearish, you can move your investments from equity to debt funds. In this way, you can secure your wealth and maximize the ULIP plan returns.
Long-term investment alternative
ULIPs are one of the best investment instruments if you want to fulfil your long-term financial ambitions. If you stay invested in a ULIP with a long-term perspective, you can avail of the benefits of compounding. Besides this, ULIP plan returns are comparatively higher in the long run when compared to other long-term investment products.
- Tax benefits
The premium that you pay towards the ULIP is tax-exempt under Section 80C of the Income TaxAct, 1961. The maximum permissible limit is INR 1.5 lakh per annum. Apart from helping you save money, ULIP investment grows your wealth over time.
Life insurance cover
Besides the investment component, ULIP offers life insurance coverage as well. The life cover can help you protect your family’s financial future, especially when you are not around.
Investing your hard-earned money in ULIP is an ideal option, as you can reap the benefits of insurance and investments. ULIP is a versatile instrument during these turbulent times, as it provides a package of life insurance and returns on investment. These two aspects are necessary today, as you need coverage against the risk of an untoward incident and financial security. If you plan to purchase ULIP, ensure that you invest your savings in the right funds to earn high returns on investment.