These days, investing in something has not only become a trend but a necessity. There are many benefits attached to investments, including long-term returns and even providing a somewhat regular income, especially after retirement. However, it is vital to research everything before diving into investing headfirst. This research would definitely bring you to a term called ‘ULIP / Unit Linked Insurance Plan’.
Unit Linked Insurance Plan (ULIP) is an investment as well as an insurance policy, which comes with its own set of advantages. An ideal plan of choice, ULIP aims at providing its investors with wealth creation and life cover. After you invest in ULIP, your chosen insurance company puts in a part of your investment in life insurance, while the remaining part goes into equity and/or debt fund, which can provide substantial support for your important life goals.
ULIP has an array of fund options available for customers, which may vary from company to company. The underlying benefits, no matter which insurance company you choose, will not change, especially the returns you will get. These returns can be calculated by the ULIP calculator, which happens to be the best tool to keep yourself updated with your ULIP investment. However, to get better returns on ULIP investments, here are some useful tips that will help you stay on top of your game.
Choosing between debt and equity funds:
Since ULIP provides a choice between choosing debt and equity funds, you choose whichever is more advantageous to you. Debt funds might give lower returns, but there is also lower risk. As for equity funds, it has higher returns but higher risk. Choosing debt funds in ULIPs is clearly a safer option; however, with its 40% equity exposure, going for equity funds can also work.
Keeping an eye on the market:
Keeping a keen eye on the fluctuations of the market is vital if you are going to invest in ULIP. This is where the ULIP calculator would help you calculate your returns, but it will be after you decide where to invest, i.e. between equity funds or debt funds. If equity markets seem rather expensive, one can switch to debt funds and switching back when the markets are more profitable.
Focusing on long-term goals:
The aim of ULIPs investments is primarily because you want to support your long-term financial goals. It is important, therefore, that you hammer out the details of your ULIP investment according to your goals. It is advisable to switch to the safer option of debt funds as you get older, so as to maximize benefits from the moment you invested in ULIP. Consider checking in with the ULIP calculator once, before taking a decision.
Utilizing the option of switching:
One of the best parts of ULIP is, as mentioned above, is the option of switching. As an investor, you can move your cash into debt funds or equity funds whenever you want. You can either decide on the basis of the markets or when you are sure that you don’t want to take any more risks. ULIPs, therefore, also provide the option of auto-trigger, where the behaviour of the assets in the fund is studied to facilitate easy switching.
Using ULIP calculator to stay ahead of your game:
ULIP calculator – easy to use, quick access and absolutely free – is an amazing tool to check the value your investments will fetch you in the future. It is not only an efficient planning tool but also offers you complete control over your investment decisions. The flexibility and transparency of the ULIP calculator are astounding, which helps you make sound and informed investment choice.
ULIPs have always been subjected to misconceptions, which has many people believing its not a great choice. However, when used prudently, ULIPs can help investors achieve their long-term goals successfully.