What a typical ULIP has to offer:
The combination of investment and life protection is achieved through the highly popular investment tool “Unit-Linked Investment Plans”. There is no fixed target audience for this. Anybody from young to old and from risk averse to high risk takers invest in ULIPs and look at it as a huge chunk in their investment portfolio. This is one investment tool that does not need as much research as in case of stocks or mutual funds where the risks are much higher without research. Layman could pick one of the popular ULIPs and still get away with standard good returns.
For those who are a bit more aggressive and savvy to milk more out the ULIPs would benefit by playing with the Equity investment percentage, option to combine different life protection schemes or by choosing fixed return ULIPs. Depending on your risk appetite you are capable of increasing the percentage of investment into Equities vs Debt. All ULIPs come under the 80C section of Income Tax act and hence you need to add up the benefits that you avail from the tax shield when it comes to weighing its returns. Not to forget that the returns after Maturity of ULIPs are tax free in many cases. Point to be kept in mind is that there is a cap of 1.5 Lakhs under 80C deduction.
One such plan is the Investshield plan by CHOICE Life Insurance. It’s an offering from Canara HSBC and OBC who are all set to launch a part protection and part investment plan. The plan provides protection features through different benefit options to suit the needs of investors.
To avoid the trouble of going through a cumbersome process they enable one to be directly insured. Just choose your benefit at your fingertips and customize your plan. Keeping in mind the dreams of investors for themselves and the ones they love, they introduce this new plan which is not only value for money investment but also provides a choice for opting the suitable protection suitable.
Why ULIP for Long-Term:
There is a reason why ULIPs continue to be the most bought financial product today. Though it is typically quarterly, half yearly or annual premium based, the money eventually is invested in the form of systematic investment into the market. Also unlike the earlier reputation of hidden charges, IRDA imposed regulations have made ULIPs safer and also sometimes helps in earning loyalty benefits. The low cost incurred towards its premium is a huge motivation to invest into ULIPs.
To get the best returns it is recommended to hold on to your plan for 10 years or more. It is simple to understand if you consider the fact that the amount that goes into your plan is eventually going into the markets. Going by the trend of Indian financial market, the growth has always been upwards and specially the returns are up to 15% across 10 years span. This reduces when it comes to ULIP returns because you have to consider that they give you tax benefits as well.
Apart from the long term benefits from ULIP(due to market linking) and the insurance cover, some other benefits would be the ability for partial withdrawal and to be able to switch the fund across debt or equity. It is understandable to feel an itch to shuffle money after putting it into ULIP for say 5 years. So instead of withdrawing and investing into another financial tool think of the ULIP switching instead. Increase or decrease the percentage of investment in Equity depending on either the market situation or your personal risk profile.
Since you can generally not withdraw the money before lock-in period, at least not without being charged. It becomes important that the right choice of ULIP is made and the amount is chosen wisely. This means you should be able to invest the premium for the whole term in a sustainable manner. Of course, if the capability to invest increases then the investment can be further topped up with some small charges for doing it. So take the wise decision and pick a ULIP that suits you today.
For more details on our plan refer http://bit.ly/iULIP_launch
You can also follow us on twitter with #InvestShield
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