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Finance

Enjoy dual benefits of insurance and investments : What is ULIP and how it works

Summary: Wondering what is ULIP and if you should invest in it? Find out how one plan can help you enjoy the dual benefits of insurance and investment. Read on.

07 Jan 2023 by Team FinFIRST
Unit Linked Insurance Plan - ULIP form on a table

Finding a simple solution to multiple problems may not always be possible. However, a ULIP may be able to address your insurance and investment goals at once, offering you several benefits in one.

Here's what ULIP is and how it can help get you capital appreciation and life protection.

What is ULIP?

A Unit-Linked Insurance Plan is an insurance product that also lets you invest your money for different financial goals. The premium paid towards a ULIP plan is divided into two components. The first is used to secure the sum assured. This is given to a grieving family in the case of an unfortunate event. The second is used to invest in the market to earn interest.

A ULIP offers different investment options, such as equity, debt, and hybrid funds, that you can choose according to your risk appetite and goals. A ULIP policy also lets you switch between funds as per your changing needs or invest in a combination of equity, debt, and hybrid funds.

Now that ULIP's meaning is clear, let's move on to its features and benefits.

Unit-linked insurance plans ULIPs offer the following features:

·   Multiple Funds: A ULIP investment lets you choose from equity, debt, and hybrid funds. Moreover, you can switch from one fund to another whenever you want.

·   Multiple Premium Payment Options: ULIPs provide you with several premium payment options like monthly, yearly, and even single-lifetime payments.

·   Partial Withdrawals: A ULIP lets you make partial withdrawals before the policy's maturity to meet your immediate needs.

·  Top-Up: A ULIP offers the option to use a top-up to increase your investment value. You can use this if you have any surplus funds.

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Here are some benefits of investing in a ULIP:
 

·  Dual Benefits: ULIPs offer the double benefits of investment and insurance in a single plan. This way, you can use one product to prepare for future goals and protect your loved ones in your absence.

·  Tax Benefits: You can save tax by investing in a ULIP. ULIPs offer tax benefits of up to Rs 1.5 lakhs under Section 80C. Moreover, the death benefits are tax-free under Section 10 (10D) of the Income Tax Act, 1961.

·  Maturity Benefits: At maturity, you can earn market-linked returns based on your choice of funds. Some insurance companies may also offer bonuses or add-on benefits to enhance the fund's value.

To sum it up

Now that you know what the ULIP plan is, do not wait any longer and invest in it as soon as you can. Metra Trust offers investment-linked insurance with leading life insurance partners like ICICI Prudential Life, HDFC Life, and BAJAJ Allianz that can help you achieve your financial goals and safeguard the financial interests of your family.

Visit the Metra Trust website to learn how to invest in it.

 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Metra Trust or its affiliates to any licensing or registration requirements. Metra Trust shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.metratrust.com for latest updates.

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