Best Ulip Plans
ULIP came into play in the 1960s and is popular in many countries in the world.
As times progressed the plans were also successfully mapped along with life insurance need to retirement planning. In today's times, ULIP provides solutions for insurance planning, financial needs, and many types of financial planning including childrens marriage planning.
Unit Linked Insurance Plan - is a financial product that offers you life insurance as well as an investment like a mutual fund. Part of the premium you pay goes towards the sum assured (amount you get in a life insurance policy) and the balance will be invested in whichever investments you desire - equity, fixed-return or a mixture of both.
In India investments in ULIP are covered under Section 80C of IT Act. However, the concept of having an investment and insurance by the same instrument is being challenged by the market regulator SEBI which has taken up the matter to the Supreme Court of India .
Advantage of ULIP: -
1. Low charges
2. Limited premium (only 3 years we can stop premium paying but life cover ll continue till end of the term.
3. We can switch our fund depends upon the market trends
3. Tax benefit
4. Double benefit
i.e., if a policy holder died on first year of the policy, immediately sum assured (lump sum money which mention in the policy) will be given and that policy will continue, insurance company will pay the premium behalf of the policy holder, end of the term again fund value will be given to policy holder.
5. Transparent fund value
6. More than seven funds are there
Unit Linked Insurance Plans come with in an-built range of fund options to choose from - ranging from aggressive funds (primarily invested in equities with the general aim of capital appreciation ) to conservative funds (invested in cash, bank deposits and money markets instruments with aim of capital preservation) so that you can decide to invest your money in line with your market outlook, time horizon and your investment preferences and needs. So if you have a high risk appetite. You should opt for a more aggressive investment option and vice-a-versa.
Additionally you also have the advantage of switching fund options to make your investments work in tandem with the market. These days various ULIPs also offer option of life stage based funds which keep dynamically altering themselves without you having to do any monitoring on your own.
A wise choice of fund option will ensure that your ULIP guarantees your important life goals - be it retirement planning.
The wide range of ULIPs available in the market might make it difficult for a consumer to choose the correct ULIP. However if you were to follow a few simple steps choosing the right ULIP can be a smooth process.
Understand the concept of ULIPs thoroughly
Do your homework well and read as much as you can about ULIPs as you can before investing. Read the literature available on ULIPs on the web sites and brochures circulated by insurance companies. This will help you know the benefits and structure of the ULIP.
Focus on your requirements and risk profile
Identify a plan that is best suited for you keeping in mind your risk appetite. In case you have a high-risk appetite, opt for a more aggressive fund option (an option that invests higher percentage in equities) and vice versa.
Understand the peculiarities of the plan
Understand all the charges levied on the product over its tenure, not just the initial charges. A complete charge structure would include the initial charges, the fixed administrative charges, fund management charges and mortality charges.
Examine the performance of the plan
Compare the performance of the plan with benchmark indices like BSE Sensex or Nifty in the past two or three years to get a better idea about the performance. Ensure that you can easily get information about your NAV when you need it. Thoroughly understand the flexibility and redemption conditions of an ULIP.
Understand the charges levied on the product
Understand all the charges levied on the product over its tenure, not just the initial charges. A complete charge structure would include the initial charges, the fixed administrative charges, the fund management charges and mortality charges. You not only need to understand the charges in the first year but also through the term of the policy.
Compare ULIP products of different insurance companies
Compare products of different insurance companies in terms of premium payments, cost structure, performance of the scheme (equity as well as debt schemes), additional facilities such as top-up premium and free switch between different fund options, flexibility in terms of increasing or decreasing protection, reporting structure and flexibility in redemption.
Know about the Company
Last but not least, insure with a brand you can trust to honor its commitment and service in accordance to your requirements.
For more information on
Best ULIP plans you can visit our website http://insuremegenie.com/investment/whybuyulip.html
by: vivek
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