4 Important Tips to Maximize Gains with ULIP Investments
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4 Important Tips to Maximize Gains with ULIP Investments

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  • 14th Apr 2022
  • 2,063

4 Important Tips to Maximize Gains with ULIP Investments

Simply investing your money in financial tools isn’t enough - understanding how to maximize your investment returns is the actual key. For example, the popularity of ULIP plans has climbed to unprecedented heights. ULIPs have become everyone’s favorite and a household name for a plan that comes with a mandated 5-year lock-in period that offers both investment and a life insurance plan. The benefits of insurance and market-linked profits plus partial withdrawals is an amazing combination for an efficient financial plan. We will share all of the secrets and tips you need to know in order to make a significant capital gain on ULIP in this article.

Don’t Shy Away from Switching Funds

Switching funds is a word that refers to diversifying your assets across several asset types. It is a big part of determining a portfolio’s risk-reward ratio. You may build a big portfolio by diversifying your assets over various asset classes, thereby enabling the benefit of one asset class to compensate for the loss of another. As a result, your investment’s overall risk is lowered, and it adds to the ULIP long term capital gain. Another advantage of holding a Unit linked insurance plan in India is that policyholders have unrestricted access to switching between various funds. You can modify the debt and equity fund options in your ULIP plan at any time throughout the policy’s duration for capital gain on ULIP.

Examining The Economic Scenario is Your Best Friend

This step works in combination with the switch option. You must be knowledgeable of the present economic atmosphere as well as the prediction for both national and worldwide markets in order to swap your finances effectively. Leading indicators, such as the price of crude oil and the increase in international political tension, are critical in predicting market performance and, as a result, the gain on ULIP.

Longer The Tenure Greater The Returns

You are aware that ULIP investment aids in wealth growth; therefore, you must invest in ULIP insurance for a longer period of time for long term capital gain on ULIP. It has a five-year lock-in term which implies that you may only make partial withdrawals from your ULIP insurance once five years have passed. This lock-in period enables investors to pay premiums on a regular basis and to think about wealth growth as long term capital gain on unit linked insurance.

Stay Aligned With Your Goals

Your income composition, appetite for risk, long term financial goals, and investment objective must all be considered when choosing a policy. When picking a plan, keep your financial objectives in mind, whether they are definite events like a child’s wedding or more ambiguous ones like building money for the future. The ideal strategy aids you in achieving your objective and gets you there with the least amount of obstacles and the most gain on ULIP investments. To make your selection, look at the plan’s investment ratio in both equity and debt funds.

Maximizing gain on ULIP is not as complex as it may appear. All you have to do is stay updated with market circumstances, align them with your financial goals, and research and make the best decision possible in order to benefit from long term capital gain on ULIP.

- A Consumer Education Initiative series by Kotak Life

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