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Business News/ Brand Stories / Benefits of investing in ULIP in 2023
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Benefits of investing in ULIP in 2023

This article will explore those benefits and discuss how ULIPs can be used to reach financial goals with minimal risk.

While ULIPs are a great way to create wealth over the long term, there are many benefits that make them attractive to investors in 2023. Premium
While ULIPs are a great way to create wealth over the long term, there are many benefits that make them attractive to investors in 2023.

In the current climate of rising gold prices and volatile markets, investing in ULIPs (Unit Linked Insurance Plans) has become an increasingly popular option for Indian investors. While ULIPs are a great way to create wealth over the long term, there are many benefits that make them attractive to investors in 2023. This article will explore those benefits and discuss how ULIPs can be used to reach financial goals with minimal risk.

Advantages of Investing in ULIPs

When it comes to investing, ULIP offers a range of advantages that can help investors achieve their long-term goals.

Tax Benefits:

As per Section 80C of the Income Tax Act 1961, investments in ULIPs are exempt from tax up to 1.5 lakhs. This means that investors can save money on taxes with an investment in ULIPs. Additionally, there is no tax levied on withdrawals or maturity amounts received from ULIP plans.

Transparency & Flexibility: 

Investors can keep track of their investments through regular reports and statements provided by insurers which adds to the transparency of the plan. Furthermore, investors have the freedom to switch funds and adjust premiums as per their requirements.

Higher Returns: 

ULIPs provide higher returns than traditional investments such as bank deposits and fixed deposits. This is because the funds are invested in equity and debt markets, allowing investors to take advantage of capital appreciation potential over the long term. Additionally, insurers offer bonuses on ULIP plans which can further boost returns for investors.

Risk Management: 

ULIPs come with built-in risk protection features that can minimize losses if the stock market takes a downturn. Insurers also provide additional riders such as critical illness riders and accident benefit riders which help protect against risks associated with health or accidents.

Liquidity: 

Investors have the option to liquidate their investments in a ULIP after the completion of 5 years. This is beneficial for those who need funds in an emergency or want to capitalize on market opportunities.

What are the Different Types of Unit Linked Insurance Plans?

Due to their popularity, insurers offer a wide range of ULIPs for investors with different risk profiles. Here are some of the most popular ULIP plans:

Debt Fund ULIPs:

Debt Fund ULIPs are suitable for investors with a low-risk appetite, as most of the funds are invested in debt instruments such as government bonds and corporate debentures. These plans have lower returns compared to equity funds but offer stability and protection during market volatility.

Equity Fund ULIPs:

Equity Fund ULIPs are perfect for investors with a high-risk appetite, as the funds are invested in equity instruments such as stocks and mutual funds. These plans have higher returns compared to debt fund ULIPs but come with a greater risk of capital erosion during market downturns.

Regular Premium ULIPs:

Regular Premium ULIPs require investors to pay regular premiums throughout the policy term. The premiums are invested in a mix of equity and debt funds, depending on the risk level of the investor.

Single Premium ULIPs:

Single Premium ULIPs allow investors to pay for their policy in a single payment and lock-in their returns for the duration of the policy. This type of plan is beneficial for those who want higher returns without having to make regular payments every month.

Conclusion

ULIPs offer numerous benefits that can help investors reach their long-term financial goals with minimal risk. With so many options available, investors should review each plan carefully and consider all factors before investing. Additionally, they should seek professional advice to ensure that their chosen plan meets their needs and goals. By investing in ULIPs, investors can experience the advantages of a conventional insurance policy as well as the potential for higher returns over the long term. Investing in ULIPs in 2023 is a great way to maximize returns while minimizing risk.

Disclaimer: This article is a paid publication and does not have journalistic/editorial involvement of Hindustan Times. Hindustan Times does not endorse/subscribe to the content(s) of the article/advertisement and/or view(s) expressed herein. Hindustan Times shall not in any manner, be responsible and/or liable in any manner whatsoever for all that is stated in the article and/or also with regard to the view(s), opinion(s), announcement(s), declaration(s), affirmation(s) etc., stated/featured in the same. This information does not constitute a financial advice.

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Published: 07 Jul 2023, 06:11 PM IST
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