Is It Worth Buying ULIP Plans For 10 Years?
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Is It Worth Buying ULIP Plans For 10 Years?

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  • 7th Mar 2022
  • 310

Is It Worth Buying ULIP Plans For 10 Years?

Despite the fact that the market today appears to be swamped with investment options that promote the practice of continual wealth multiplication through investing, there appears to be a lot of confusion surrounding the concept - which is only natural. For example, if you want to get your hands on numerous investment sources in one, you should consider a ULIP. But if you are not aware of how it works and whether you will get the desired result or not, you might be a little skeptical about investing in ULIP

In this blog, we will go over the basics of ULIP policy, their benefits, and if they’re a smart 10-year investing choice.

What Is ULIP?

ULIP stands for Unit Linked Insurance Plan. It is a type of long-term investment that can enable you to achieve a range of investing goals such as retirement income, future financial planning for your children, and asset building. The five-year lock-in term stipulated by the government ensures investment stability even while delivering substantial market-linked gains. The best ULIP policy combines life insurance with investment in debt, equities, or balanced funds. ULIPs provide income security for your family even though you’re not present, as well as boost earnings and support you in meeting your long-term objectives.

ULIP Return in 10 Years & Its Importance

Financial experts estimate that if you invest in ULIP insurance for at least 10 years, you may anticipate a 10 to 12 percent annual rate of return. This is one of the primary reasons why ULIPs are viewed as a sound long-term investment. Investing for a longer length of time such as ten years allows your policy to survive short-term market losses while reaping big rewards in the long run.

ULIPs beat other long-term investment options including the Public Provident Fund (PPF), National Savings Certificate (NSC), etc., and a 10-year ULIP program is anticipated to yield larger returns than other market-linked products such as ELSS, tax-saving mutual funds, and so on. These other investments give strong returns, but not enough to outperform rapidly rising inflation in the long run. ULIP return in 10 years of investments, on the other hand, has the potential to outperform inflation if held for a minimum of 10 years.

Features of ULIP Policy

Fund Switching & Flexibility

The ability to move funds is the best feature of a ULIP policy. ULIP investments allow you to adjust your money allocation over time based on your risk tolerance and market movement. These plans are quite adaptable and you have a vast selection of alternatives to pick from when it comes to finances. You can choose your premium payment term, premium mode, and ULIP plan duration. This enables you to fund your ULIP insurance plan without straining your budget.

Insurance Option Protection

ULIP plans combine investing and insurance coverage into one package. A portion of your premiums is invested in market-linked securities, while the remaining is utilized to provide you with a solid life insurance policy.

To conclude, ULIP return in 10 years is an advantage of the investment tool, allowing it to benefit from a variety of sources. With these basic features and the possibility to produce significant returns, it is worthwhile to purchase a ULIP for a 10-year term.

- A Consumer Education Initiative series by Kotak Life

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