The term ULIP stands for unit-linked insurance plan. In ULIPs, you get the opportunity to invest for insuring your life as well as growing your wealth at the same time. It is just one plan that allows you to grow your money by investing it in mutual funds. The amount that you invest in a ULIP is referred to as a premium as is the case with all other kinds of insurance policies. Here the amount is divided into two parts and one of them is invested in debt, hybrid, and equity mutual funds, as we have already said. The other part is used for your insurance.
What are the features of a ULIP?
In ULIP investment you have to pay a single premium which implies that you have to pay the total premium of the policy right at the time you buy it. However, if you do not like this you can also go for other modes such as monthly, semi-annual, and annual depending on your preference. In most of these policies, the term period of the policy and the number of years for which you have to pay the premium are the same. The returns in these plans are linked to the market.
What are the advantages of investing in a ULIP?
You might think — is ULIP a good investment — but there are several ways in which they can be of benefit to you along with what we have said already. These policies inculcate a habit of saving in you. They also provide you with the protection that you normally get from these policies. When you invest in ULIPs you are in complete control of your finances because of the flexibility that these policies offer in terms of investment options. You also get tax benefits by investing in them.
Also Read about ULIP benefits
No matter which stage you are at as an investor, one of the best decisions you can make is to choose a top service provider such as PNB MetLife when you are looking to invest in ULIPs and the like. This is because this way you would get the most ideal financial instruments that would offer you the versatility, these policies are known for, in the truest sense of the word. Such a policy would integrate seamlessly both its investment and insurance components. The dual nature of such a policy will, in a single plan, provide you with wealth creation and protection benefits.
