8 Important Tips to Maximize Gains with ULIP Investments
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

8 Important Tips to Maximize Gains with ULIP Investments

ULIPs are insurance plans that support both wealth creation and future security. Discover the best ways to invest in ULIPs to increase your gains and profits.

  • Apr 14, 2022
  • 2,748 Views

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. ULIP returns have become everyone’s favourite 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.

Key takeaways

Important Tips to Maximize Gains with ULIP Investments:

  • Don’t Shy Away from Switching Funds
  • Examining The Economic Scenario is Your Best Friend
  • Longer The Tenure Greater The Returns
  • Stay Aligned With Your Goals
  • Start Investing As Soon As Possible
  • Maximize the Amount of Investment
  • Invest in Equity Funds
  • Change your investments to safeguard your gains before maturity

The benefits of insurance and market-linked profits plus partial withdrawals are an amazing combination for an efficient financial plan. We will share all of the secrets and tips you need to know to make a significant capital gain on ULIP returns 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, adding 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 performance.

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 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 returns.

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 returns 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 a 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 to benefit from long-term capital gain on ULIP returns.

Start Investing As Soon As Possible

Any investment professional will tell you that “yesterday” is the best time to start investing. Essentially, this indicates that the longer you wait to start investing, the more money you can make. Regarding ULIPs, the earlier you enrol, the more you can get out of your ULIP. You have a longer time horizon to gain profits on your investment when you invest early.

Additionally, you can maximise the wealth-building benefits of compounding with a ULIP. For instance, if you begin investing a percentage of your income as soon as you begin working, you are not only developing a wise habit of saving but also increasing your wealth.

Maximize the Amount of Investment

A decent general rule of thumb is to start out by investing a sizable sum, as much as you can, in a ULIP. Your ULIP’s potential returns can be maximised if you can set aside a sizeable sum for it. Over a lengthy period of time, consistent small-capital investments grow your wealth into a sound corpus.

Invest in Equity Funds

History teaches us that, as long as equity is kept for a long time, investing in equities may produce excellent returns. Equity investments also carry risks, but if you keep equities patiently, you can reduce them. In a ULIP, a portion of your plan corresponds to an investment (in equity funds, debt funds, or a combination of the two), and the remaining portion relates to life insurance.

You might see strong returns if you decide to invest only in stock, but there are associated market-related dangers. There are methods that various ULIPs might reduce the risk element in your plan while still enabling you to make significant gains.

Reinvesting Returns

There is an additional method to make the most of your ULIP investment portion. If your returns exceed a predetermined threshold, you can reinvest them or book gains.

Fund Rebalancing

Your funds can be rebalanced in a way that provides you with appropriate returns to diversify your fund portfolio in a ULIP and to maximise your ULIP. To lower the risk factor, investments in a mix of debt and equity in various ratios might be made.

Change your investments to safeguard your gains before maturity

The auto rebalancing of funds option keeps your ULIP portfolio’s assets practically risk-free, while it may not always do so. In addition to having your portfolio automatically rebalanced, ULIPs also give you the option of switching funds. Depending on your insurance provider, you may be able to effectively utilise this to further reduce your risk.

This simply causes your capital allocation to automatically transfer to a liquid or debt fund if there is a particular potential risk from markets. This can lower your exposure to market risk and strengthen your portfolio, allowing you to maximise the value of your ULIP when it matures.

This automatic fund-switching feature in ULIPS kicks in four years before your ULIP insurance is scheduled to mature. This will ensure that your money is protected from market volatility and that you can generate money without taking any risks until your maturity date.

Conclusion

There are several ways to make the most of your ULIP that provide you with the chance to amass riches. Additionally, you benefit from having life insurance protection and may stop worrying about your loved ones. The most serious investors are the only ones who may find value in such twin advantages.

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

Kotak e-Invest

Download Brochure

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

Similar Articles

Safe Investment Options with High Returns for FY 2018-19

ULIPs Investment – A Boon or Bane?

Why Should You Consider Guaranteed Savings Plan for Long-Term Investment?

What is Money Management? Definition & Example

Why Are ULIPs Called Flexible Investments?

What are the Best Investment Options for Students in India?

Does Rupee Cost Averaging Work In Unit-Linked Insurance Plans?

Building wealth through regular investing

ULIP Plan as a Gift

What are the Best Investment Options for Beginners or Amateur Investors in India?

Top 9 Investment Plans Available in India

Why are ULIPs One of the Best Tax Saving Instruments?

ULIP as an Investment for Your Child

Best Guaranteed Returns Investment Options to Meet your Financial Goals

Are Gains from ULIP Sale Taxable?

How to Make Your Financial Portfolio?

Which is a Better Investment - Mutual Funds Or ULIP?

How to Choose the Best ULIP Plans to Invest in 2022?

What are Some of the Safest Investment Options in India?

The lesser-known facts about ULIP policy that customers should be aware of?

Why is Portfolio Diversification Important? How to Diversify Your Portfolio?

Why Should Parents Invest in Endowment Plan?

Customising investments to manage your wealth

Can ULIP Policy be Transferred?

Which is Better – FD, Mutual Fund, SIP, or ULIP?

Are Money Back Policies Helpful? A Complete Guide

Endowment Plan vs Fixed Deposit?

यूलिप के फायदे (Benefits of ULIP in Hindi)

What are loyalty additions, and how do they work in a ULIP?

How to Start Saving Money in 10 Simple Ways?

Can ULIP Help in Achieving Short-Term Financial Goals?

Asset Allocations in ULIP - Know the Top Benefits

Planning Financial Goals and Objectives of Financial Planning

Why Should You Invest in Term Insurance And ULIP?

What is ULIP Renewal?

Beginner's Guide to Wealth Creation: Meaning, Strategies, & Importance

4 Benefits of ULIP Fund-Switching Feature

How to Manage Inheritance Money?

ULIP Benefits You Can Avail from Early Investing

Benefits of ULIP as a Child Insurance Plan

Debt ULIPs vs. Debt Mutual Funds: What's the Difference?

What is a Savings Plan and What are is Benefits?

How to Manage Your Portfolio Like a Professional?

What is Fund Switch in ULIP? And ULIP Fund Switching Techniques

How to Fulfil Your Financial Goals in the Next 10 Years?

How is the Compound Annual Growth Rate (CAGR) Calculated in ULIP?

Why Should I Invest in ULIP?

What are the Best Investment Options For Females?

How to Plan your Investment to Achieve Periodic Financial Goals?

How to Plan Savings from Salary?

Investments Options to Buy a house in India

What are Financial Assets & their types?

Why ULIP is Better Investment for Long-Term Wealth Creation?

Creating a second source of income with life insurance

Top 10 Investment Strategies to Create Wealth

What are the Best Investment Options for Young Adults?

Learn About Safe Investments with High Returns in India

How Does an Endowment Plan Work?

Different Types of Endowment Plans

Long Term Savings Plan - Best Savings Investment Plans in India

Best Investment Plans for Children - Secure Your Child's Future

How to Use Recurring Investment Strategies to Build Wealth?

Things to Know Before Buying an Endowment Plan

Receiving regular payouts at various stages of life

How Do One-Time Investment Plans Work?

Best One-Time Investment Plans in India

Are Investment Returns Guaranteed in a ULIP?

Difference Between Passive and Active Investing

What are the Best Short-Term Investment Plans with High Returns?

How Can a Legal Nominee Claim ULIP Benefits are the Policyholder’s Death?

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

Best Investment Options in India in 2022

Why Should You Build an Emergency Fund?

How to Cancel ULIP Policy?

What is Direct Investment and its Types?

How To Track ULIP Performance?

What are Mutual Funds?

How to Increase Net Worth Along with Family Protection

ULIP Investment Strategy: Top Tips to Improve Your ULIP Gains

Which are the Best ULIP Plans in India for Children?

Which are the Best Investment Plans for Indian Senior Citizens in 2022?

Important Questions You Must Ask Yourself When Buying a ULIP Plan

Planning for Your Child's Higher Education? Explore These Investment Options

Difference Between Guaranteed Savings Plan and ULIP

What is the Importance of Saving Money?

Rate of Interest on Different Investment Plans in India

ULIP vs FD - Which is Better and Why?

How To Invest Money In ULIP?

How Is ULIP Different from Other Life Insurance Plans? Where Can I Invest - ELSS, ULIP, or PPF?

What are Tax-Deferred Savings Plans?

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

What is the Time Value of Money (TVM)?

Top 5 Principles That Need to be Followed for Wealth Creation

Importance of Portfolio Management

Do You Know the Difference Between Savings and Investment?

How To Diversify Portfolio In 2022?

Investment Options for NRIs in India

What's Better for Your Child's Education? Child Plans or Mutual Funds?

How to Plan Your Child's Education - A Step-by-Step Guide

Successful Financial Planning for Urban Women

Savings Plan for Grandchildren

How Much Wealth Can You Create from ULIP in 10 years?

Short Term and Long Term ULIP Plans for Wealth Creation

Factors Affecting Stock Markets

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

Learn About Safe Investments with High Returns in India

Top 5 Investment Options in 2022 for Healthy Returns

Early Investing and the Power of Compounding

What is better - Guaranteed Savings Plan or Fixed Deposit?

ULIP NAV Meaning & How is the Return Calculated in ULIP

Here's Why it's a Good Time to Explore ULIPs as an Investment

Best Investment Options to Cover Your Child's Education

Why Do You Need A ULIP Plan - All You Need To Know