Unit Linked Insurance Plan is a hybrid product that contains dual benefits of investment and insurance. A portion of your premium goes to the insurance side and the other one is invested in capital markets like equity debs like a mutual fund. Hence an insured person gets both benefits of life insurance and higher investment gains with a ULIP plan.
What is a ULIP plan?
Understanding what is ULIP is a critical step before one invests in a ULIP Plan.
A ULIP plan has two major aspects that are insurance and investment. The Insurance side covers you and your family for financial support in case of any mishappenings and the investment side helps you to give higher Returns directly linked to market growth. So that one can secure the future with insurance and create subtle wealth with higher returns for their family.
ULIP plan also provides protection benefits for your family like life cover so that they don’t face any financial downfall in your absence. A ULIP plan is customizable and flexible. It means that you can select to invest your money in either debts or equity as per the return margins. Let’s look at more details about all the benefits of the ULIP plan.
Benefits of ULIP plan
1. Dual Benefit with Higher Returns
The most important aspect of the ULIP plan is that insured people get life cover along with investment benefits. In the ULIP plan, the insured people also get the freedom to select their life cover amount. The bare minimum of life cover is 10 times more than your annual premium amount. But it can increase up to 40 times or even higher.
As from the investment aspects the insured person can avail higher returns that are directly drawn from market growth.
2. Death And Maturity Benefits
If an insured person completes the whole time duration of a ULIP plan policy then the person is eligible for maturity benefits. gets the present value of funds along with other additional benefits like loyalty benefits etc.
In case of any mishappenings like disability or death, the family or nominees of the insured gets present-day fund values, sum assured, and all other added benefits. The upcoming premium payments are also waved off partially and fully in case of disabilities and death respectively.
3. Income Tax Benefits
The payment for ULIP plan comes under tax deduction up to Rupees 1.5 lacs as for section 80c of Income Tax Act. Also during the withdrawal after the Maturity period, the whole fund value with sum assured and additional benefits remain tax-free as per Section 10(10D) of the income tax Act.
4. Financial Long Term Wealth Benefits
Although investment benefits compensate with the risk attached during the investment in the market as a part of ULIP plan. But, If an insured person invests in a ULIP plan with a long-term maturity duration then it maximizes returns.
The main reason behind it is that during a long-term period the insured person can bear the fruits of risk averaging and easily avoid market fluctuations, volatility, etc, and manage to withdraw higher returns than any investment can ever be able to provide.
5. Flexible Portfolio Switch Benefits
ULIP plan provides the facility to change the portfolio from debts to equity or vice versa as per your understanding of the market so that one can draw higher returns without any additional charges on portfolio switch.
Best ULIP Plans in India
Several ULIP plans in India provide vast benefits and return gains as compared to others. So we gathered the Best ULIP plans to help you with the selection confusion.
1. Canara HSBC Oriental Bank Of Commerce – Invest 4G plan
Canara HSBC Oriental Bank Of Commerce Invest 4G plan is a non-participating unit-linked policy that helps you with your financial misery. It comes with the dual benefits of experience insurance and investment plans that help you build a wealthier future with benefits of insurance for yourself and your family. The ULIP plan offers vast benefits and coverage like loyalty benefits, wealth boosters, mortality returns, life coverage that makes it an ideal choice.
It provides a facility to ensure investment in 7 different funds and 4 portfolio strategies. The unique feature of this plan is that it has an option to avail the benefit of maturity return with Settlement options in installments.
2. LIC Endowment Plus ULIP plan
LIC endorsement Plus ULIP plan not only gives dual benefits of investment and insurance but also the facility of savings to their customers. It is also a Non participating ULIP plan that ensures a wide range of benefits.
This plan provides maximum death benefits including partial withdrawals of premiums, the highest amount of unit fund value, 105% of the total premium of total paid premium, etc. to the family of the insured person. It also comprises a variety of other benefits like Charity benefits, partial withdrawal switching, settlement options, and Rider benefits.
3. HDFC Life ProGrowth Plus
HDFC Life ProGrowth Plus Is another best ULIP plan policy option that invests a proportion of premium into capital markets to draw higher returns. HDFC has experience in the market and even run their own most renowned Mutual fund regulatory. This plan consists of a regular pay option with four investment funds that are Blue Chip, balanced, income, and opportunities fund.
In this plan, the insured gets the whole fund value on maturity along with related benefits. And after attaining the age of 60 years, the insured gets 105% of the premium paid back in return or can make partial withdrawals of the sum assured after 58 years.
4. SBI Life Wealth Assure
SBI Life Wealth Assure plan comes with single payment options. It is a non-participating unit-linked insurance plan that provides 2 different funds for investment including equity and bond funds.
This wealth in your plan can also come with additional Rider benefits as per the requirements of the insured person.
The insured person gets the full Fund value on maturity with other additional benefits like maturity benefits, loyalty benefits, etc. In case of any mis-happening like death, the amount payable is Fund value, and 105% of the premium paid is paid to the insured person’s family. Income tax benefits are also included on premiums payments as per Section 80C and claims as per Section 10(10A)of the income tax act.
ULIP plan is a dual benefit Insurance scheme that comprises investment and insurance benefits within a single compact package where one compensates with other limitations. In case of drawing higher returns, one can manage its portfolio with flexibility. And also can assure yourself and your family of insurance benefits that come under the ULIP plan.
ULIP plan is only one policy that you require for both long-term financial freedom and complete family financial protection. This guide helps you with the understanding of what ULIP is and what are its key benefits.