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“Safe” returns? Why ULIPs can solve the investment riddle

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October 08, 2018
Investment for the future is the backbone of financial stability and strength. Right kind of investment and in a timely manner can decide the course of your future financial freedom and the current ability of spending. With the ever-increasing prices and the rising cost of living, investments have acquired more importance. Besides, tax saving is also a core factor which, if done carefully, can help you strengthen your finances. Income tax can reduce not only the take-home portion of your salary but it can put a dent in the returns from your investments as well. This is why you need to invest in well-thought out investment options that can boost your income and help you achieve your money investment goals

ULIPs (Unit Linked Insurance Plans) fare far better than other media of investment when it comes to returns and tax benefits. Here are some key facts about ULIPs that will make you understand how ULIPs stand out from the rest of investment options:

  1. Lock-in Period: ULIPs come with a lock-in period of five years, which means that you cannot break the corpus during this time. This not only ensures a healthy and stable saving pattern but also leads to financial discipline and long term benefit. Unlike any other investment plan (e.g. Equity Linked Savings Scheme or ELSS), a ULIP is bought once and tax benefits can be enjoyed every year until maturity of the plan.
  2. Potential of better return: ULIPs have the potential to garner better returns than any other insurance product because of its equity advantage. ULIPs invest the premium paid by you in various asset classes through different funds. Tax-saving funds have historically given double digit returns, but you need to look for a new fund every year, in case of a one-time investment. For ULIPs, the renewals take care of tax savings. 
  3. Flexibility for added financial freedom: ULIPs have an option of switching funds during the term. You can choose among growth, equity, balanced, income funds as per your risk appetite or change in goal.  This allows you to make full use of the available options and also means that you can choose which fund to hold depending on the end goal/plan in sight. This is ideal for capital gains for mid-term plans (which take the lock-in period of five years into consideration).
    Unlike shares, you do not have to keep a track of companies that the fund invests in. You just have to choose the policy, change the fund allocation anytime during the term, and run it till maturity to reap long-term benefits.
  4. Dual benefits of insurance and investment: ULIP offers double advantages as it includes the benefit of investment and also offers guaranteed security to the capital invested and the returns at the time of maturity. Although term insurance plans fulfill the life cover and tax-saving parts, they do not offer any return. ULIPs, besides the tax advantage of up to Rs 1.5 lac under Section 80C of the Income-tax Act, 1961, can be instrumental for long-term goals. 

HDFC Life offers HDFC Life Click 2 Invest ULIP  an online unit linked plan for additional benefits. For further details, please check the mentioned link :

https://www.hdfclife.com/savings-plans /click-2-invest-ulip-plan.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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