Financial needs can change as life progresses! This is why you need to consider a suitable savings plan. ULIP plans help you in wealth accumulation, therefore enabling goal fulfilment. Moreover, investment plans such as ULIPs offer market-linked returns, which results in higher savings for your future.
A ULIP plan offers several options to help you fulfil your future financial goals. Let’s explore some of them.
Flexible Investment Options
ULIPs offer a range of high to low-risk investment options. You can choose your equity and debt proportion based on your risk appetite and financial goals. Some ULIP plans like Edelweiss Tokio Life Wealth Gain+ will let you choose from 7 diverse funds. You can also switch between funds to get better maturity benefits. Choose a premium amount that is suitable for you.
The Power of Compounding
Even if you start investing with small amounts consistently for many years, you will be able to increase your income potential and create a corpus for future goals. This is possible through the power of compounding where you earn interest on your investment during the period, and thus witness earnings growth.
So, you not only save money systematically but make it work hard for you towards wealth generation.
Tax Savings
ULIPs offer tax benefits under applicable sections of the IT Act. Tax optimisation allows you to save more for your future goals like your child’s marriage or education. U/s 80(C), you can save up to Rs. 46,800 taxes with premiums.
Life Cover
ULIP plans offer life insurance coverage, which means your family can receive a pay-out in the event of your untimely death. This will secure them financially in your absence. Moreover, the sum assured is non-taxable, which means that your family doesn’t lose money which is critical for helping them manage finances.
Liquidity for Urgent Needs
The investment plans like ULIPs offer a systematic withdrawal option after the first 5 years. This means that you can partially liquidate your funds, if you need money urgently. For instance, if you have a medical emergency or you need money for house renovation.
Expert Management
You don’t need to worry about managing the fund! A ULIP plan offers the option of assigning a designated fund manager, who will allocate investment units to steer the fund in the right direction. These investment plans provide complete transparency by letting you track your investments and annual growth. You can even modify unit allocations if you think it will lead to investment appreciation.
However, know that taxation of ULIP plans has been modified slightly after the 2021 Union Budget. Research well, and go through all the terms and conditions to make an informed decision.
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