Thursday, 30 June 2016

Should you go for ULIP?

Insurance, apart from being an instrument of financial security for the future of your loved ones, is also considered as a good option for investment. Insurance, unlike stocks, is a safe form of investment. While you might be wary about investing in shares directly, there are options that let you invest in the stock market while simultaneously providing the security of an insurance cover. Unit-Linked Insurance Plans or ULIPs are exactly what you’re looking for.
When you buy ULIP plans, a portion of your money is invested across assets like stocks, bonds, and so on, similar to investing in mutual funds. The remaining money is used to buy you a life cover, valid for a certain period of time. This way, you earn a cool return on your money and remain insured at the same time.
What is the concept? Best Ulip Insurance Policy is simply a combination of insurance and investment. You buy a policy and pay a premium like you do for your other insurance policies, however part of your premium is as insurance premium(for the cover) while remaining is invested in various equity and debt schemes.(like mutual fund investments).
Investment part: As an investor you have the choice of selecting what type of fund you need to invest (debt or equity or a mix of both). This is same as Mutual Fund investment (if you have done MF investments earlier you would know). So, you will have units allotted and you can check its value based on current NAV - if they are making profits or running in losses. NAV - Net Asset Value - which you could say in simple terms net rate of return on current date. This varies from one ULIP to another and is purely based on market conditions.
Which almost all financial players forayed into ULIP business - which also saturated the market and ULIP lost its sheen, very soon. Also, investors learnt all the tips and tricks of this plan, over the time and turned their back on it.
Which almost all financial players forayed into ULIP business - which also saturated the market and ULIP lost its sheen, very soon. Also, investors learnt all the tips and tricks of this plan, over the time and turned their back on it.
When and why you need it, because based on your requirements - there are various other options in the market for investment. For example:
A.if you need pure insurance - best is to go for term insurance, where you can get a high life cover for minimal premium.
B.if you need pure investment - do not go for ULIP, invest into other high return products.
C.Decide when you need returns (This is called Investment Horizon in financial terms), early? For marriage? For kids’ education, for retirement? Based on that select a product.
D. Find out how much of risk can you take? (This is called risk appetite in financial terms)- are you 23 and just started working - which may mean, you can take bigger risks and invest into something, which even if it fails, you would not be hurt, financially so much, are you 45 and now thinking of investing - plans/policies changes accordingly.
Source: http://blogs.rediff.com/bestulipinsurancepolicy/2016/06/30/ritikashah11998-37/



1 comment:

  1. Thank you for sharing such great information. It is informative, can you help me in finding out more detail on Ulip Insurance India,BestUlip Insurance PlanBest Ulip Insurance Plan,i am interested and would like to know more about this field and wanted to understand the basics of ulip insurance policy.

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