3 ways to maximise your GAINS from ULIPs

ULIPs are not a curse on investors.You can reap more benefits from ULIPs by following these strategies.

ULIP or unit linked insurance plans are considered most innovative form of life insurance product. A ULIP has a unique structure and working that it can be altered up to a certain limit to suit your personal requirements.

A unit linked insurance plan serves dual benefit of insurance as well as investment. A ULIP policy serves the basic purpose of achieving insurance goals along with targeted financial solutions, that is, it provides a blend of protection and good wealth creation opportunities.

ULIPs are little complex in nature but in simpler terms, unit linked insurance plan is the most creative form of life insurance offering good returns on your investment and is a flexible product meeting your requirements which is the primary reason why ULIPs have emerged as the preferred investment option these days.

ULIPs are highly liquid form of investments after a fixed lock in period, usually very short, ranging from two to five years, which actually differentiate them from traditional life insurance plans.

Unit linked insurance plans are considered a total financial package due to their distinct features from other forms of life insurance products. The most important feature of ULIP is the potential for better returns from the investment due to option of switching between equity and debt and that too at very low cost along with fulfilling basic underlying objective of life insurance.

It provides flexible insurance cover in order to meet any contingency.

ULIP is the only life insurance product which is flexible providing dual benefits of insurance and investment but most investors in such policies find it difficult to understand and reap maximum gains out of a unit linked insurance plan.

1. Flexibility to change your life cover

Unit linked insurance plans is the only life insurance product that provides an option to increase life insurance cover.

An individual undergoes various life cycles and stages due to which several needs arise and increasing life insurance is one of them. Moreover, you can decide the life insurance cover at the time of inception of the policy as well.

This flexibility provided by ULIPs must be utilised as financial protection has to keep on changing with time enabling you to maximise your benefits from your insurance policy.

2. Flexibility to select and change your fund option

An individual seeking unit linked insurance plan primarily for investment has the option to decide the fund option. As ULIPs are managed by finance professionals, they park money collected as insurance premium from buyers in various funds.

ULIPs are built with this feature to invest money in various funds which can be chosen by the insurance seeker. An individual can choose from a range of aggressive funds to conservative funds depending upon your preference and investment needs.

You can change fund structure at any point of time at very nominal cost. This switching option provided by ULIP helps an individual meet short-term financial goals as well as long term wealth maximisation objectives.

3. Flexibility to opt for various insurance riders

Unit linked insurance plans provide an opportunity for an insurance seeker to add more riders to an insurance policy. This is the customisation feature provided by them through which an individual can get optional riders to enjoy added protection.

Riders are supplementary benefits which can be bought along with main insurance policy. Various riders that can be added to primary policy are critical illness rider, personal accident rider, hospital benefit rider, disability rider etc. providing benefits at the time of any contingency.

ULIPs also help an individual to achieve financial goals at various stages of life. Everyone knows they need to save money for their important life goals. ULIPs help an individual to address key financial goals through systematic investment options.

An individual has to keep in mind that they are a risky form of investment as money is invested in volatile instruments such as equity markets but an individual investing in ULIPs inculcates a disciplined savings pattern. Moreover, triple saving benefit such as life insurance cover, wealth creation and tax saving make them a very good investment product for those who don’t want multiple products.