What Makes New-Age, Unit Link Insurance Plan’s a Smart Investment Option in the Current Volatile Market?
Table of Content
In this policy, the investment risks in the investment portfolio is borne by the policyholder
The current volatile scenario may discourage many investors from participating in the market. However, if you want to remain invested in the equity segment without taking on the steep risk that comes with direct equity investments, Unit Linked Insurance Plans (ULIPs) may be just the product you are looking for.
What are Unit Linked Insurance Plans?
ULIP plans are life insurance plans that combine the benefits of insurance and investment. Over the policy term, you can invest on a monthly, quarterly, half-yearly or on annual basis in your choice of ULIP funds — which could include various options like equity funds, debt funds, hybrid funds and more.
New-age ULIP policies have emerged as investment options among investors who are keen on tapping into the benefit of market-linked returns while also meeting other financial goals like familial protection, long-term wealth creation and tax savings.
Reasons New-Age ULIP Policies are a Smart Investment Option
Let’s take a closer look at some key beneficial features that make ULIP plans so popular and essential.
Customisable Investment Choices
When you invest in a ULIP plans, you can choose which funds to add to your ULIP portfolio. If you are a conservative investor, you may choose to invest significantly in debt funds and offset this with some equity investments. On the other hand, if you are an aggressive investor, an equity-heavy portfolio may be suitable.
What’s more, as your risk profile changes or as the market trends change, you can switch your investments from one fund to another, making your investment choices highly flexible and customisable.
Long-Term Investment Option
ULIP plans also come with a 5-year lock-in period. By remaining invested over this duration, you can ride out short-term market volatility and benefit from potential long-term capital growth. After the lock-in period, although withdrawals are permitted, it is advisable to remain invested over the entire policy term if you want to experience the benefits of your investments in full.
Tax Savings and Benefits
ULIPs also offer tax advantages. The premium you pay for your ULIP policy is deductible from your total income up to Rs. 1.5 lakhs per year, under section 80C1 of the Income Tax Act. Additionally, the maturity payouts and the death benefits received are also tax-free Under Section 10(10D)1 of Income Tax Act
Automated Portfolio Management
New-age ULIP plans also give you the benefit of automated portfolio management. You can opt for SIPs to systematically invest in the funds of your choice and even withdraw funds systematically on an automated basis. Other functions like fund rebalancing and risk management are also automated.
Regulation of ULIP Charges
ULIP charges are regulated by the Insurance Regulatory and Development Authority of India (IRDAI). This has proven to be very beneficial for new-age investors, who wish to invest in the markets across changing volatility levels without suffering the burden of high investment costs.
Conclusion
Tap into the new-age benefits of Unit Linked Insurance Plans and get the dual advantages of investing in the market-linked ULIP funds of your choice as well as obtaining a life cover for your family. What’s more, with the fund switching feature, you can also adjust your portfolio to navigate the effects of market volatility easily.
Related Articles
- ULIP Plan Charges You Must Know
- How to Withdraw ULIP Policy?
- Meaning of Sum Assured in a ULIP
- How to Diversify Your Portfolio: 5 Investment Tips for you.
- Term Insurance For Millennials
- Understand how a ULIP calculator works
ARN-ED/08/23/4147
Term Plan Articles
Investment Articles
Savings Articles
Life Insurance Articles
Tax Articles
Retirement Articles
ULIP Articles
Subscribe to get the latest articles directly in your inbox
Health Plans Articles
Child Plans Articles
Popular Calculators
Here's all you should know about life insurance.
We help you to make informed insurance decisions for a lifetime.
HDFC Life
Reviewed by Life Insurance Experts
HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER
We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.
Subject to conditions specified u/s 80C, 10(10D) of the Income tax Act, 1961.
The afore stated views are based on the current Income-tax law. Also, the customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.
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.
Popular Searches
- Term Insurance Calculator
- Investment Plans
- Investment Calculator
- Investment for Beginners
- Best Short Term Investments
- Best Long Term Investments
- 5 year Investment Plan
- savings plan
- ulip plan
- retirement plans
- health plans
- child insurance plans
- group insurance plans
- income tax calculator
- bmi calculator
- compound interest calculator
- income tax slab
- Income Tax Return
- what is term insurance
- Ulip vs SIP
- tax planning for salaried employees
- HRA Calculator
- Annuity From NPS
- Retirement Calculator
- Pension Calculator
- nps vs ppf
- short term investment plans
- safest investment options
- one time investment plans
- types of investments
- best investment options
- best investment options in India
- Term Insurance for Housewife
- Money Back Policy
- 1 Crore Term Insurance
- life Insurance policy
- NPS Calculator
- Savings Calculator
- life Insurance
- Gratuity Calculator
- Zero Cost Term Insurance
- critical illness insurance
- itc claim
- deductions under 80C
- section 80d
- Whole Life Insurance
- benefits of term insurance
- types of life insurance
- types of term insurance
- Benefits of Life Insurance
- Endowment Policy
- Term Insurance for NRI
- Term Insurance for Women
- Term Insurance for Self Employed
- Benefits of Health Insurance
- Health Insurance for Senior Citizens
- Health Insurance for NRI
- Best Term Insurance Plan for 1 Crore
- personal accident insurance
- Annuity Calculator