Unit-linked insurance plan is a unique financial product that offers both life insurance and investment opportunities in a single product. The premium paid for ULIP is split into two parts: one covers your life insurance, and the other goes into different fund options like equity, debt and balanced.
For individuals who desire to invest for a longer length of time, ULIPs are more favourable. The earnings on ULIPs are quite appealing to those who are saving for their children’s further education, a payment on a property, generating capital investment for their company plan, or retirement. In addition, ULIPs provide financial security for the future and make it easier to accumulate money and assets.
ULIP in 3 years have shown some promising progress, and we’ll tell you all about it in this article.
- Compounding Benefit Linked with ULIP 3-Year Growth
Each ULIP has a mandatory 5-year term, during which you must invest for at least five years. This instils the habit of saving regularly and assures that you, as an investor, are in it for the long term rather than simply for the short term. This technique also allows you to profit from power of compounding, which has risen in the previous three years. The interest received on principle is re-invested each year to produce extra revenue. You might expect large wealth creation if you stay invested for 10 to 15 years. Given their cost-effective structure, some of the finest ULIPs have provided 12 to 15% returns on average over the previous five years.
- Better Returns Beating Inflation and Other Investment Tools
ULIP 3-year growth has the potential to generate better returns than any other financial investment scheme due to its equity edge. The premiums you pay are invested in various asset types through different funds in ULIPs. Tax-saving funds have historically generated double-digit returns, but you’ll have to look for a new fund every year if you’re just investing once. ULIP renewals swiftly take care of tax saving benefits.
The amount you receive at maturity is determined by the stock market’s performance throughout the term. On the other hand, endowment plans are set up to pay out a lump sum after a specified length of time. Even though such restrictions protect capital, earnings do not beat inflation.
Life is full of unexpected events. However, not everyone has ample liquid assets, and disposing long-term assets impact the market portfolio, to say nothing of the tax and other fees. Therefore, when it pertains to partial withdrawals from collected funds after the lock-in period, ULIP is a lifesaver, as demonstrated by ULIP in 3 years of growth.
The previous few years have been difficult but having your money in order makes dealing with unfavorable financial conditions simpler. In this instance, ULIP in 3 years has proven their value and become one of the most valuable financial tools that help you beat inflation and take advantage of compounding.
- A Consumer Education Initiative series by Kotak Life
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Reviewed By :
Prasad Pimple
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
