7 Reasons Why You Should Invest In ULIP Now
One of the reasons why your big dreams are big is because they need substantial money, be it buying a dream home, establishing a start-up or children’s higher education. You need to invest regularly over a long period to accumulate savings. If all this sounds a little difficult to you, we suggest that you relax and opt for a simple solution: buy a goal based unit linked insurance plan (ULIP) as it not only provides life cover to you and your family, it also helps building substantial corpus to fulfil Life Goals.
Of the ULIPs available in the market, Bajaj Allianz Life Goal Assure offered by Bajaj Allianz Life Insurance can be considered as one of the good option. It not only offers regular ULIP features but also unique features that help you earn even more for your life goals. “Why should I invest in ULIP?” you may still ask. Here are five compelling benefits of doing so, especially with the help of a goal-based ULIPs offered by Bajaj Allianz Life.
1. Choose your investment mix
On the basis of risk appetite, investors have the option to choose the mix of funds to invest in.
- Low risk-takers can opt to invest in debt funds
- Moderate risk-takers can choose balanced funds
- Equity funds are most suited for high risk-takers
Investors can avail the benefit of switching funds depending on the market outlook without any tax liability and can also refer to fund ratings published by independent investment research agencies like Morningstar before deciding on the type of funds to invest in.
Bajaj Allianz Life Goal Assure offers you the flexibility to choose from 3 investment strategies according to your investment style to accomplish your life goals. You can also opt for strategies such as Wheel of Life portfolio Strategy, Trigger Based Portfolio strategy and Auto Transfer Portfolio Strategy which are managed by experienced fund managers.
2. Long term investment
You may be having long-term goals like buying a house, buying a new car, having your own start-up, etc. ULIPs prove to be a good option when it comes to long-term investments because ULIPs have a lock-in period of 5 years and this inculcates a habit of disciplined investment which is required for money to grow. Here in comes into picture the power of compounding. It means that your money will be reinvested for the principal amount to grow year after year. Hence investment through a ULIP can be considered as one of the best options to create wealth for the future.
3. Benefit from returns
When you buy a life insurance policy, the insurance company levies a mortality charge for the insurance cover, but what if there is a plan that returns back the mortality charges that you paid? This is exactly what Bajaj Allianz Life Goal Assure does. It offers Return of Mortality Charges (ROMC) on maturity.
On the date of maturity of the policy, the total amount of mortality charges deducted throughout the policy term is added back, to the fund value. This means you get more value for your investments, which takes you a step forward towards realizing your Life Goals
ULIPs are transparent products that disclose costs as well as where the money is invested. You can see how your premiums are invested through a benefit illustration. It shows the illustrative returns on your investment net of costs on year-on-year basis, assuming 4% and 8% return.
5. Tax Benefits
Tax Planning is as crucial as you plan for your other financial goals and investments are the best way to reduce tax liability. For those who are planning to save tax on your income or your investment gains, (which might include almost everybody), ULIPs qualify for tax benefits at the time of investment as well as on maturity. Thereby policyholders can gain Tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act 1961 subject to fulfilment of conditions therein.
6. Two-in-one Benefit – Insurance + Investment
The dual benefit of life insurance and investment means that ULIP acts as a comprehensive financial product. The life cover provides insurance benefits to the family members of the insured, while providing them with high market-linked returns at the same time.
7. Increase Investment Via Top-Ups
What happens if your ULIP investment over performs and you want to invest more? The Top-Up facility in a ULIP allows you to invest money over and above your predetermined premium. You stand to gain high returns during times of strong market performance, allowing you to reach your Life Goals sooner.
To summarize, here are top 7 benefits of choosing to invest in ULIPs today:
- Selecting suitable ULIP funds as per users risk-appetite to grow future wealth
- Power of compounding comes into play for long term investments
- Benefits from Return on Mortality Charges (RoMC)
- Transparency in ULIP premium charges
- ULIPs serve useful tax saving benefits in the long run
- Dual benefit of insurance+investment
- Ability to increase investment via Top-Ups
Clearly, there are compelling reasons to buy an ULIP plan to meet your life goals and fulfil your dreams. ULIPs have what it takes to be a loyal and helpful friend in your long journey to your cherished life goals.