Tired of Market Swings? ULIPs can be Your Investment Savior!
"Never invest in stocks with a faint heart or borrowed money. Both are fatal."
New Delhi : Sensibly said, as the stock market is profoundly unpredictable. And this fear of market fluctuation is what keeps risk-averse investors away, depriving them of higher returns in the long haul. Market volatility is the result of various elements, which can't be anticipated. Thus, making it difficult for investors to time their exit and entry in the market.
So, if you do not have the risk-appetite to endure the market instability and are tired of market swings, your best option is to opt for Unit-Linked Insurance Plans (ULIPs).
This single investment product is intended to cater to multiple financial goals of investors. Moreover, by finding the best ULIP plan for yourself, you can easily deal with the market volatility.
As ULIPs offer numerous benefits, compared to direct stock market investment, the commonly utilized expression "having your cake and eating it as well" goes well with ULIPs. Explained underneath are a few benefits of investing in ULIP plans:
Wider Investment Choice
Putting resources into stock market implies that you conduct your own research on the securities and pick the one that meets your long term objectives. When you make a ULIP investment, however, you just need to pick the fund that matches your risk-appetite. The fund management part is taken care of by experts.
Moreover, investors can choose from multiple fund options - equity, debt and balanced funds - keeping in mind their long-term financial goals.
Fund Switching Feature
While ULIPs enable investors to choose from multiple fund options, they additionally allow investors to leverage the benefits of investing in the equity market through fund switching feature. Which means, investors have the freedom to switch to debt – when the market is experiencing a bearish run and shift the fund’s allocation to equity – when the market winds up bullish, to boost the returns.
This sort of flexibility allows you to invest strategically and take advantage of market unpredictability with the goal that you can meet your life objectives faster.
Single Product with Dual Benefits
The multifaceted ULIPs not only provide investors with the best investment options but also offers financial security to their family through a life cover.
The overall invested premium is divided into two parts - a portion is invested in the funds of your choice while the other is used to provide you with life coverage.
Tax Saving Ability- Triple EEE Benefit
With regards to tax saving properties, ULIPs fall under the EEE (Exempt-Exempt-Exempt) category. Meaning, investors are eligible for ULIP tax benefits during all three phases as follows:
• Investment stage: The premium paid is eligible for tax deductions under Section 80C (Maximum Rs. 1.5 lakhs per annum)
• Earnings stage: Returns generated are exempted from tax
• Withdrawal stage: Maturity amount is completed tax-free under Section 10 (10D)
Simply put, ULIP investment is free from tax burden, unlike stock market investment.
ULIPs are known to generate higher returns over a long-term investment frame, say 1o-15 years. Moreover, by staying invested for a longer duration, ULIP charges and market fluctuations are compensated. A higher portion of the premium, in this way, is redirected into investments that empower you to fund your long-term goals like:
• Wealth creation
• Saving for your child’s education
• Retirement planning
Moreover, by providing you with the life cover, ULIPs give you the added advantage of knowing that your financial goals will be secured even in your absence.
Investing in ULIP Scores Over Investing in The Stock Market
There are some reasons as to why putting resources into ULIP is your best bet if you are tired of stock market volatility. However, if you are looking to investing in the best ULIP plan for your long-term goals, it is essential that you select an insurer that:
• Has shown strong consistency over the past few years
• Offers secure and safe investment with healthy market returns
• Has a strong track record of claim settlement ratio
These days, India’s most reputable insurers including Max Life Insurance offer numerous advantages to investors like the option to choose funds and investment strategies, additional security for partner, loyalty additions, wealth booster, and ULIP tax benefits, amongst others.
Now that you know how ULIPs score over direct stock market investments, all you need to do is, think about your investment goals and pick the best ULIP plan that can help generate maximum returns on your investment.