3 Types of ULIPs That Fulfill Your Life Goals

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Unit-Linked Insurance Plans (ULIPs) have become the most sought-after investment option during the past few years. They are popular because they offer the dual benefits of life insurance coverage and investments. Besides this, the policyholder can avail of tax exemptions under Section 80C and 10D of the Income Tax Act, 1961.

Additionally, ULIPs have a compulsory lock-in tenure of five years that plays a crucial role in helping investors to build a corpus in the long term. ULIPs can prove to be a perfect wealth creation tool if you stay invested for a long time. Here are the three types of ULIPs that can help you meet various long-term financial objectives.

  • Savings plan

This ULIP plan meaning and objective is to help you save enough money for a better financial future. With the help of such plans, you can earn adequate wealth in the long run, which can be helpful to meet future financial needs. As ULIPs come with a mandatory lock-in period, they grow your savings considerably through the power of compounding. Therefore, ULIP helps you earn a handsome amount during maturity to ensure that you accomplish your life goals.

  • Child plan

Every parent is concerned about saving for their child’s future. It is one of the most important responsibilities for you as a parent, and therefore, you need to plan the life goal carefully. Saving for your child’s higher education should be the priority. Still, you would also like the child to indulge in extracurricular activities like painting, music, sports, and dancing that can facilitate his or her overall development. ULIP is an ideal investment option that can help you secure your child’s future.

ULIP funds offer various benefits that can safeguard your child’s financial wellbeing even when you are not around. Some of these include:

  • You can withdraw some funds partially after the mandatory lock-in tenure of five years to meet the financial obligations of your child’s essential education milestones like 10th, 12th, or graduation
  • Your nominee will receive a lump-sum to manage the immediate financial needs in case of any untoward incident
  • Your insurer will bear the premiums of the policy during your absence till the tenure, which will ensure a good return on investment; the child or the appointee is entitled to get a lump-sum once the policy period is over. The child can receive the sum only if his or her age is 18 or more
  • Retirement plan 

Retirement is a time to enjoy, travel to different places, and pursue your interests, as you have completed all your responsibilities. If you want to make the most of your golden years, start planning for your financial future. Investing in ULIP funds is advisable, as you can expect better returns when compared to other products.

Your income will stop post-retirement, but the bills will continue. You need to consider your lifestyle costs, medical expenses, and funds needed to provide financial support to your family while investing in ULIP.

Benefits of ULIP

Offering a double advantage of insurance and investment is a ULIP plan meaning that you should know. Here are some plus points of ULIP that have made it an outstanding investment option:

  • Flexibility in switching among equity, debt, and balanced ULIPs
  • Transparency of funds
  • Facility of partial withdrawal
  • Opportunity to save due to a minimum lock-in period of five years
  • Provision of tax benefits

There are various other types of ULIP plans available in the market designed to meet specific financial needs. So, if you invest in the right plan at the correct time, you can earn guaranteed returns.