ulips as a monthly investment option

Here are the benefits:

Investment which also offers life cover – The unique benefit of this investment is that, besides investment it also provides a life cover. So in a way it is an investment which works to provide you twin benefits – life insurance combined with savings at market-linked returns.

Convenient premium payment options – Not many know that unit linked insurance plans also offer options where you can choose between – yearly, half-yearly & monthly investment options. In fact even the annual premium in a ULIP works on the rupee cost-averaging principle. All you need to do is send a one-time instruction to your bank to allow an auto debit of a specified amount at fixed intervals from your bank account; and not worry about missing paying any premiums.

Withdrawal facility – ULIP requires regular payments and has a lock in period; post that you can make partial withdrawals; (subject to charges and conditions). If needed you can also choose to stop paying and make a full withdrawal of your policy before its maturity date, though there would be few surrender charges applicable.

Switching funds for better returns – Compared to other plans, ULIP gives you an advantage of transparency and flexibility also. So while other investment options also offer hybrid/balanced schemes; the difference in a ULIP lies in the flexibility; where you can easily switch between equity and debt markets and capitalize on opportunities. Most insurance companies allow a certain number of ‘free’ switches per year.

No need to depend on market timings – Due to regular monthly payments towards your ULIP, the market’s ups and downs will get averaged out. Also this way you don’t end up paying large sums of money in one go in a scenario when the markets are high.

Long term investment benefits – ULIP payments being smaller amounts, are much easier to invest regularly for a longer period of time; despite any financial ups and downs you may be facing. Being invested for a long period of time; will fetch you better returns; and can also be used for retirement purpose.

Add-ons & bonuses – Few companies give bonuses to those who have been making regular payments. ICICI Prudential, after completion of certain period of the policy term gives extra units to the policy holders; such as wealth boosters and loyalty additions; till the end of the policy term. These help increase the value of your investments at no extra cost.

Benefits of Equity & Debt in one ULIP: In most investment options, you can choose to invest in either debt, equity or balanced funds. With ULIPs, you can get the best of all the three types of funds. You get to decide what how much of your investment goes into debt funds, equity funds and balanced funds. Also, as stated earlier, you can switch your money between funds free of cost.

Tax Benefits: With ULIPs as your investment option, you can get tax benefits under section 80C & 10(10D). You can use it to save tax as part of your Rs. 1,50,000 u/s 80C tax savings for the financial year. In addition to that, the maturity amount is tax free u/s 10(10D).

Disclaimer

Unlike traditional products, Unit Linked insurance products are subject to market risk, which affect the Net Asset Values & the customer shall be responsible for his/her decision. The names of the Company, Product names or fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns.

Tax benefits under the policy are subject to conditions under the provisions of the Income Tax Act, 1961. Service tax & applicable cesses will be charged extra, as per applicable rates. The tax laws are subject to amendments from time to time.

L/II/0798/2016-17

 

About The Author

ICICI Prudential Life Insurance Company Limited is one of the leading life insurance companies in India. We provide insurance plans & policies that include a range of products like term insurance, ULIPs, tax saving plans and pension & retirement plans.

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