Features of ULIP Plans
ULIP plans have a list of features that makes them the preferred investment option for the investor. Apart from the several tax benefits and the opportunity to increase your wealth over time, the life cover provided under ULIP plans acts as a safety net for the policyholder. Some of the important features of the ULIP plans are listed below
1. Flexibility- The flexibility of switching between different funds has to be the key feature provided by the ULIP plans. Based on your financial goals, market situation, and risk-taking ability you can switch between different funds to maximize your returns. Apart from the ability to switch, ULIPs provide the additional feature of partial withdrawals. After the lock-in period, an investor can withdraw a certain amount of money to meet their emergency fund requirements. This feature comes to aid when you are faced with unforeseen circumstances and are in dire need of money.
2. Dual benefits- ULIP is a popular choice among investors. What makes it stand apart from the traditional investment avenues is its ability to combine the benefits of insurance and investment. While you are protected by financial security provided under life insurance, you can make high returns by investing in the market. Since the funds are managed by expert fund managers, you are less exposed to the volatility of the market. Moreover, you can decide the kind of investments you wish to make based on how much risk you are willing to take. You can always switch between the funds based on changing scenarios in the market.
3. Financial security- If you are willing to invest for the long term, ULIP makes a good investment choice. The investment time horizon plays a crucial role in getting high returns. Equities perform well over a long period. If you start early, you have the option of investing in aggressive ULIP plans which invest in the equities and with time you can move to the low-risk debt funds. The funds accumulated over the tenure of the policy can provide financial security post-retirement.