In today’s economic climate, with ever-growing inflation and uncertainties stemming from the unpredictable nature of the growing pandemic, financial planning has taken on a new note of importance and urgency. There is a need for families to have a safety net in place to tide them through these challenging times. Thankfully, the market is filled with options that promise financial stability in the most turbulent of scenarios. One such popular option is a ULIP (Unit Linked Insurance Plan). If you are already invested in a ULIP plan, this article is a must-read for you.
ULIPs are a great, flexible option for investors looking to reap the benefits of life insurance while accumulating and growing a corpus simultaneously. Oftentimes, a market-linked insurance product like a ULIP may seem like too risky an investment, but it doesn’t need to be so. The experts understand how to manage your assets so that you get the best possible return on your investment. Companies like Edelweiss Tokio Life Insurance offer fund management services where you can leave the plan on autopilot and reap the benefits without having to worry about the markets at all.
But as is the case with any autopilot system, you are still the one in charge, and there are measures you can undertake on your own to make sure that the returns are maximized. It doesn’t always take an expert. Here are a few tips which you can follow to improve your capital gains through a Unit Linked Insurance Plan.
And invest for a longer period of time! Markets reward long investments. So, it is crucial that you opt for a Unit Linked Insurance Plan as early in life as possible to not just get an advantage in terms of time on hand but also get lower premiums and a high sum assured as a death benefit of the plan.
Starting early is not just beneficial for you in terms of wealth maximization but also as a habit-building exercise. You inculcate the value of savings early, and it can benefit you your whole life.
Again, to maximize your returns, you need to make sure that you are investing as much as you can. In certain situations, when you find yourself with any surplus income, you can choose to top up your Unit Linked Insurance Plan. Companies like Edelweiss Tokio Life Insurance reward you for putting up extra capital for investment by pitching in with a bit of capital themselves.
Choose Equity Funds
Unit Linked Insurance Plans give you the choice of the fund where you want your money to be invested. You usually must choose from a pool of 5-7 mutual funds that are made up of either debt, equity, or a balance of the two. Among these, the equity-based mutual funds offer the highest returns, but they also carry the highest risk levels, comparatively speaking. So, if you have a high-risk appetite, it would be best if you invest your money in equity funds.
Switch As Per Market Performance
It is imperative to monitor the performance of your investment and make changes as per the market climate. You may realize that equity is not giving returns at the correct rate, so in that case, switching to a safer debt-based option would be prudent. The best part about ULIPs is that they allow you to make several free switches like this so that you can steer your investment in the right direction, at all times.
Avoid Partial Withdrawals
If you are invested in a ULIP, you know that after an initial lock-in period of 5 years, you can make partial withdrawals, which is an excellent facility if you are in dire need, but except that, you should refrain from making any partial withdrawals, as in the long run, they prove detrimental to the growth of your corpus and prevent the maximization of your portfolio.
What are the other benefits of ULIPs?
You can follow the tips and make sure that your investment returns are maximized. In addition, be aware of the other benefits of a Unit Linked Insurance Plan:
ULIPs are life insurance products, and a portion of your premium goes into giving you life cover. Ensure that you keep track of your life coverage and make sure that it is adequate for your family’s current needs.
Unit Linked Insurance Plans have tax benefits under sections 80C and 10(10D) of the Income Tax Act, 1961. It is essential that you file for tax rebates and maximize your savings and, consequently, your investment bandwidth.
ULIPs are multipurpose by nature, and companies like Edelweiss Tokio Life Insurance offer comprehensive plans that grow with your needs. Example of one such ULIP is Edelweiss Tokio Life – Wealth Secure+. It is a new-age ULIP that is affordable, and at the same time is wide in its scope. The systematic withdrawal plan makes it ideal for retirement planning! Usually, a good ULIP plan can be utilized as a retirement plan, a child plan, or a wealth creation plan. It is up to you.
It is essential to be aware of all the measures you can take to maximize the returns on your investments, and the navigation of your ULIP Portfolio is an integral part of that. If you also do your bit, Unit Linked Insurance Plans are suitable financial instruments for you to bank on!
For all intents and purposes, you can check out Wealth Secure+, a premiere ULIP by Edelweiss Tokio Life Insurance that is specifically geared towards growing your wealth. Visit their website to know more today!