subject: Tips To Choose Ulip Plans In India [print this page] ULIP plans in India offer great investment and better life coverage hence they are highly popular amongst Indian investors. Every person has individual financial goals in their life. Planning for long-term financial growth, retirement planning, buying a house and childrens education are some of the common goals. In order to accomplish them and create adequate capital you need proper financial planning. One of the popular mediums chosen for positive financial planning is a ULIP. Also known as unit-linked insurance plans, these are some of the popular market-linked insurance policies. The best thing about these plans is that they offer financial security and a relative safety in the turbulent market trends.
Unit-linked insurance plans
The unit-linked life insurance plans offer the dual benefits of secured investment and life protection. This investment can be called as a combination of mutual funds and life insurance with slightly different structure and the way of functioning. When you invest in ULIPs, some of your invested money is secured and used as life cover, while the rest of it is invested in some capital gaining funds or bonds. These policies have brought a great revolution in the Indian economic sector. Both life insurance and mutual funds lack this combination that made unit-linked insurance plans highly successful.
Following are the reasons why you should buy a unit-linked insurance plan:
They offer great flexibility in terms of sum assured, rider selection and fund options. You can also avail tax benefits with these insurance plans.
Transparency is the golden rule of a ULIP. All kinds of policy details, benefits, NAV rates and the rest of the illustrations are explained by the insurers beforehand.
The biggest advantage of a ULIP policy is that it allows you goal based investment options, which gives a meaning to your financial future.
Types of unit-linked insurance policies
There are various types of unit-linked insurance plans, which give you the advantage of choosing the suitable options. These types include:
Health
Wealth building or long-term finances
Childrens education
Retirement planning
How to choose ULIP plans in India
The success of your unit-linked insurance plan lies in proper selection process. A few easy steps in the selection stage make your investment in ULIPs a fruitful one. Always consider the following pointers while selecting these insurance plans:
Selecting appropriate life cover (sun assured) depending on your age, health, size of your family, financial needs of your family and your other investments.
You need to choose the most beneficial fund options for a secured investment and long-term benefits. Aggressive and conservative are the two basic types of funds for these investments.
As your unit-linked insurance is a long-term investment, you need to look for other options for short-term financial goals.
These insurance plans have numerous attractive features that allow you to switch between funds and top up, avail cover continuance; flexible protection level and policy surrender options.
You can also avail various additional riders according to your financial preferences. These riders include term rider, accidental death, critical illness, womens critical illness and waiver of premium.
Before the final decision on ULIPs, always understand all the terms and condition including the allocation, admission, mortality and fund management charges imposed by the insurer.
