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Features And Benefits Of Ulips

By Author: Maheshwari
Total Articles: 8

Features and Benefits of ULIPs

A ULIP plan or unit linked endowment plan provides valuable features and benefits to people and therefore are a great investment option, especially in this day and age where returns matter substantially. Here is a look at some of the main benefits and features of a unit linked insurance plan that makes it desirable amongst many other investment options.

Features of a Unit Linked Insurance Plan

Flexibility
A ULIP plan or unit linked endowment plan provides the flexibility that is comprehensive in nature and not limited to only certain aspects of the policy. The flexible components that a ULIP insurance plan provides cover the following.

Life cover

With a ULIP plan or unit linked endowment plan, the life cover that is decided upon by customers can be customized to suit their requirements based on their financial situation and capacity.

Premiums

Almost all ULIP insurance plans allow customers the option of altering their premium amounts after a certain amount of time has lapsed. This premium amount can be decreased or increased by policyholders depending on their financial situation and status. The top-up facility is another great component of a ULIP insurance plan and allows customers the flexibility to invest higher amounts whenever they can or want to maximize their gains from the policy.

Additional riders

Riders are extra benefits that can be availed by ULIP policy holders by paying a higher premium. Some examples of riders are major illness rider and critical illness rider.

Type of Investment

ULIP insurance policies invest part of the premium amount into investment avenues such as stocks, mutual funds, and bonds. Most ULIP insurance providers provide customers with the flexibility to choose where they want to invest their money.

 

Transparency
One of the key features of ULIP insurance plans is the transparency they offer to customers. Clear features and benefits, free lock-in period and ability to decide the investments based on one’s choice, ensure that customers are fully aware of the pros and cons of ULIPs before they begin investing in ULIP insurance plans.

 

Partial Withdrawals

Most insurance providers allow customers to make either partial or full withdrawal after a pre-determined lock-in period of 3 to 5 years has elapsed.

Tax benefits

ULIPs provide tax exemption under Section 80C of the income tax act, thus money invested in ULIP of up to a maximum of Rs 1,50,000 be claimed as a deduction under section 80C.

However, one must note, it is always best to compare and contrast different ULIP plans to choose the best ULIP insurance plan that fits one’s risk appetite and financial capacity for the most benefit.

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