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How ULIPs can Help in Meeting Long-Term Investment Goals?

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How ULIPs can Help in Meeting Your Long-Term Goals
December 15, 2023

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In this policy, the investment risks in the investment portfolio is borne by the policyholder    

No matter what stage of your financial journey you are in, you likely have some long-term goals that you need to plan for. They may include buying your dream home, renovating or rebuilding your current home, or saving up for your children’s higher education or wedding. Then, there is the ultimate long-term milestone that everybody needs to save up for, namely retirement.

Among the different financial products that you can use to achieve these goals, a Unit Linked Insurance Plan (ULIP) is particularly apt.

Ways in Which ULIPs Help Meet Long-Term Goals

A Unit Linked Insurance Plan gives you the dual advantage of insurance and investments. Check out the different ways in which a ULIP can help you meet your long-term financial objectives.

1. Dual Benefits of Protection and Growth

Achieving long-term goals often requires a combination of security and growth. With ULIPs, when you set aside funds for your future needs, you're also ensuring that in the unfortunate event of premature death, your family’s financial goals don’t suffer. This dual benefit ensures that your long-term vision – be it your child's higher education, a dream house, or a comfortable retirement – remains unaffected.

2. Flexibility in Investment

Long-term objectives vary for each individual. Some may prioritise capital preservation while others might focus on capital growth. The flexible fund options in Unit Linked Insurance Plans allow you to align your investments with your specific goals. For instance, if you’re saving for a goal 15 years away, you can opt for a higher equity exposure initially and gradually shift to debt as the goal approaches, ensuring optimal growth and capital preservation.

3. Power of Compounding

As you plan for milestones a decade or two down the line, like buying a dream home or ensuring a luxurious retirement, the compounding effect in Unit Linked Insurance Plans ensures that your principal as well as your earnings generate further returns. This amplification over several years can translate into a significantly larger corpus, making your major goals more achievable.

4. Systematic Investment

Consistent investments are the key to achieving your grand aspirations. The premiums you pay regularly for your Unit Linked Insurance Plan ensure you’re consistently setting aside funds, tiding over market volatilities and inching closer to your targets every month, be it securing your child's overseas education or even a world tour post-retirement.

5. Long-Term Commitment

The very nature of Unit Linked Insurance Plans promotes long-term commitment, which is crucial for substantial life goals. The mandatory lock-in period ensures that you're not tempted to deviate from your objective in the early stages of your investment journey. This safeguards your funds for pivotal moments like your child’s wedding or your entrepreneurial venture post-retirement.

6. Goal-based Savings

If you have more than one Unit Linked Insurance Plan, each ULIP can be dedicated to a specific goal, thus offering more clarity and purpose in financial planning. When you know a particular policy matures right when your child turns 18, it provides a concrete roadmap and eliminates uncertainties. This, in turn, makes milestones like sending them to a premier university an achievable target.

Conclusion

In short, if you are wondering how to meet your long-term goals, a Unit Linked Insurance Plan can be a crucial piece of the puzzle. By investing strategically in a ULIP, you can financially secure various long-term milestones in life, like the education and/or wedding of your children and even your retirement. The important thing is to remain invested over the policy term, so you can fully leverage the benefits offered by Unit Linked Insurance Plans.

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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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Disclaimer

The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year

For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale. Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.

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