Along with investment, the facility of insurance cover is available only through ULIPs.
But many things are said about the returns and life cover from ULIPs which is not completely true. In such a situation, it is important to understand it before investing in ULIP so that it can be taken advantage of according to your goal.Also Read: Employee Pension Scheme: One decision and pension limit will increase from ₹15000 to ₹25000? read details
Unit Linked Insurance Plan i.e. ULIP is a life insurance product, in which customers get insurance as well as investment option. The money invested in ULIPs by the customers is invested in stocks, bonds and similar assets. However, a part of it is meant to provide life cover to the person insured. There are many questions in the mind of people regarding investing in ULIPs. Sometimes some people invest in it without thinking and then later they start getting worried.Also Read: Who can take LIC new Arogya Raksha Policy, its benefits, features and eligibility
This problem occurs due to lack of understanding about ULIPs. Before investing in ULIPs, one should keep in mind the pros and cons as well as the risks associated with it. Only the right understanding will help you take full advantage of ULIPs. In view of this, today we are telling you 5 important things about it. This will help you to understand about ULIPs and take investment decisions in it.Also Read: Bad News: Rules on maturity of ulip have been changed by government
Effect of ULIP on your pocket
The first thing to be said about ULIPs is that they are not pocket friendly. It has to be understood that ULIPs used to be expensive during 2008. But now the time has changed. ULIPs have now become affordable and people also get the facility of life cover. Due to the products related to the market, it also helps in increasing the wealth.
Insurance regulator IRDAI has also put a cap on investment related charges in ULIPs. If a subscriber invests in it for 10 years or more, then it does not include the life cover of 2.25 percent.Also Read: Great offer from Reliance Jio, Rs 399 recharge plan will be available in just 299; just have to do this work
How risky is it to invest in ULIPs?
ULIPs have the ability to take all kinds of risks, according to the customer’s goal, there is also an option of many funds to invest. This means that there is not much risk in it. While buying the policy, the customer can choose the fund according to his risk appetite. They have the option of investing in equity, debt funds or a mix of both, depending on the risk involved.Also Read: How LIC SIIP plan work and what is the return on this
Surrender ULIP
Many people assume that the ULIC cannot be surrendered before the date of maturity. However, this is not true. Customers have the option to surrender the policy before maturity. They have this option after the lock-in period or the fund value gets deposited in full.Also Read: LIC new jeevan akshay pensionplan for life time annuity benefits
Long term returns on ULIPs
It is also said about ULIPs that it gives high returns over the long term. You have to understand that ULIPs are market linked products and the returns on it depend on whether you choose to invest in an asset class. Like any other financial product, your returns depend on the risk appetite you are willing to take.Also Read: Mallika Sherawat took off her clothes and took a sunbath, the photo quickly went viral
Life cover affected by market volatility
It is also understood that market volatility affects the life cover of ULIPs. However, it is not so. Even if there is a record fall in the market, there will be no change in the life cover amount available at the time of maturity. In case of death of the policyholder, ULIP provides life cover and fund value which is higher.
