As the new year draws closer so do your appraisals and while a good appraisal rating is definite cause for a celebration, you should consider what you want to do with the hike in your salary before anything else. A considerable increase in salary can be approached in two ways – you make your life a little more comfortable with expensive purchases or you view this hike as an opportunity to make more money for achieving other financial goals.
While it is important to grow your money, it is also very important to protect your loved ones. Individuals often find it difficult to choose between growing their money or protecting their family. This is why many financial institutions offer a plan that combines your need for investing and at the same time protecting your family.
A Unit Linked Life Insurance Plan is like any Life Insurance plan – in the unforeseen case of your premature demise, it will help your family get through the sudden loss of income with a lump sum payout. That being said, unlike other life insurance plans, a ULIP is a term plan that will invest the premium amount instead of letting it sit – this means you earn while protecting your family. Still not convinced? Here are 5 reasons you should get a ULIP.
Tax benefits
Many individuals make investments for the sake of saving tax and while that is not the sole reason why you should make investments, it still is one of the reasons why a ULIP is an ideal financial purchase. The premium amount paid under a ULIP is exempt from tax under Section 80C of the Income Tax Act, 1961. Additionally, the lump sum payout in the case of your untimely and unfortunate demise is also exempted from taxes.
Preparing for other financial goals
As you get older, your family grows and your responsibilities multiply. A ULIP is a great way to start preparing for goals like planning your child’s wedding or their education abroad.
Longer investment tenure possible
A ULIP allows investments for longer terms, which means you can enjoy long term benefits when your ULIP is invested in markets that specifically pay attention to long term investments. So, if retirement planning is currently on your mind, a ULIP is a great way to get started.
Switching between funds
ULIPs invest your premium amount in varied securities markets and funds and give you a good return benefit – but what happens if the fund in question is under-performing? Some financial institutions offering ULIP also give you the opportunity to switch between funds for better returns in the foreseeable future.
Maximise your returns while enjoying life cover
ULIPs offer you the choice to invest in a number of investment instruments including debt and equity funds or balanced funds etc – this investment is dependent on your risk appetite. But while ULIP makes this investment, it continues to protect your family with an assured sum amount that will be payable in case of your demise.
*The investments made in ULIP plans are subject to risks associated with capital markets. Please read the insurance document carefully before making a purchase.
