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Is This The Right Time To Invest In ULIP? Why or Why Not?

ULIPs are based on markets, therefore, the timing of buying and switching your ULIP fund is very important. Know the right time to invest in ULIPs.

  • Apr 29, 2022
  • 3,504 Views

ULIPs are one of the most popular financial products and many people have been investing in this due to ITS many advantages. The need to profit from high returns and tax advantages is intrinsically tied to the requirement to invest in financial products. The ULIP plans benefits are many, ranging from ULIP plan returns to the taxability of ULIP, and so on. Despite the fact that these characteristics alone do not ensure the best performing ULIPs, many other factors are at play, that makes ULIPs a good investment. So, if you’re wondering why you should invest in ULIP now, we’ve got you covered with a few answers to that question right here in this article.

What Is ULIP Plan In Insurance?

A Unit Linked Insurance Plan, or ULIP, is a financial product that integrates investment with life insurance cover. The remaining half of the money is invested in a systematic manner with a percentage going to life insurance. Like mutual funds, this transaction is made up of a variety of qualified investments, including stocks, bonds, debt, and equities. The effectiveness of the fund you pick has an impact on your investing outcomes.

Invest In A ULIP Policy Now

Why should you invest in ULIP now? Well, Unit Linked Insurance Plans are designed to help you withstand volatility in the market, so you may invest in them or switch your funds depending on when the markets are soaring or crashing. The sooner you begin, the better, since you will be able to take advantage of ULIP plan returns owing to the compounding potential. Compounding is the process of continually reinvesting your earnings in order to expand your wealth and is a part of ULIP plan benefits. You will be in a good situation to reap the rewards if you invest over a longer period of time.

  • When you have a stable income, it makes for an excellent time to invest in ULIPs and work towards your financial objectives. You may also change your premium distribution on a yearly basis, so you don’t have to invest the very same amount every year. You can also pick from a range of funds with varied equity holdings based on your risk level. Under Section 80C of the Income Tax Act of 1961, the taxability of ULIP premiums is also exempted.
  • Every individual must have a clear understanding of their financial objectives. It aids in the better planning of your assets. It’s best to invest in ULIPs when you have a clear picture of your financial objectives early on in life since it provides dual benefits of investment and insurance.

Since ULIPs long term investments, you should start as early as possible and continue investing for the best performing ULIP. Since ULIPs have a five-year lock-in term, they motivate you to be more focused and disciplined in your investing approach as well.

Whether you want to build a substantial asset portfolio or expand your wealth, ULIP does an incredible job of killing two birds with one stone. It enables you to live a comfortable life with your significant other, develop a financial cushion for your children’s bright future, and have an emergency fund over time.

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

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Features

  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521

T&C

- A Consumer Education Initiative series by Kotak Life

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