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Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.
Kotak e-Invest is a comprehensive Unit Linked Life Insurance Plan that can be customized as per your goals and needs - be it protection; investment; financial security for child or retirement planning.
Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and insurance cover against any eventuality.
Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!
The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.
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Commonly known as ULIP, a Unit-Linked Insurance Plan is a hit amongst people who want to make an investment option that would reward them with significant returns. This has led a lot of investors, both experienced and new, to pay attention to the ULIP plan.
While the awareness about ULIP and the trend towards ULIP plan investments are new, they have been around for a while now.
Let’s start with the basics of ULIP to understand what it is and how to compare ULIP plans and choose the best one for your needs.
A ULIP is a form of life insurance that combines the protection of life insurance with the potential for investment gains. A portion of your payment goes toward life insurance, while the remainder is invested in a pool of money that comprises market-linked assets like shares, debt, or a combination of both.
The percentage of your investment in the common pool is used to assign units to you. These units’ net asset value (NAV) is calculated on a daily basis. The NAV of these units grows and falls in lockstep with the market since they are linked to it. Therefore, it is usually recommended by financial experts to expand the ULIP investments so that the average NAV grows over time to reduce risk.
To invest in a ULIP policy and receive the full tax benefit under ULIP, you must understand the various types of funds available in a unit-linked insurance plan and how to invest in them.
Equity funds invest in a range of company stocks in the hopes of growing their value. You may choose from large-cap, mid-cap, or small-cap funds to invest in. Equity investments are the riskiest of all, but they also provide the most lucrative returns. These funds are intended for those with a high-risk tolerance.
Such funds, also known as liquid or money market funds, invest in a variety of highly liquid, low-risk, and short-term market instruments, including call money, cash deposits, market funds, treasury notes, commercial paper, and certificates of deposit (CDs), among many others. These funds with high credit scores are suited for you if you have a short investment plan and a low-risk tolerance. Nonetheless, the returns on such funds are similarly low.
Fixed-income assets, corporate bonds, government securities and other safe financial assets are all part of the debt and income funds. These funds have a low to medium risk profile and provide moderate but dependable returns. They’re perfect for those who have a low-risk appetite.
Balance funds are known to diversify the amount of money that flows to different places, hence, these are the most reliable and smart investments. It invests in proportion, dividing the entire investible amount among high-risk shares, business stocks, and other equity assets, as well as lower-risk fixed-interest instruments.
To summarise, the ULIP plan provides a number of benefits, but the key to getting the most out of them is to choose the correct plan for you after you compare ULIP plans with other investing options. As a result, it’s critical to learn everything there is to know about ULIP and how to allocate money to funds accordingly.
- A Consumer Education Initiative series by Kotak Life
