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Are you planning to invest in a ULIP plan? Or have you already bought one? If the answer is yes, then you might have a number of questions on your mind.
You may want to know more about the plan, available fund options, and the returns it provides. There might be thoughts about how the policy works, the top performing ULIP funds that you can invest in, and the ULIP returns you can get. Well, the article will help you get all the answers!
Short for Unit Linked Insurance Plans, a ULIP policy covers your life and also helps you save money for your future goals. A part of the premium you pay goes toward life insurance, and the other is invested in market-linked securities to enable you to accumulate wealth. You have the flexibility to choose from a range of funds depending on your financial objectives and risk-taking capacity.
The best part about investing in ULIP funds is that you can switch between different options to take advantage of market conditions and improve your returns. Apart from this, there are several benefits, including tax* exemptions that help you save more.
As you can see, investing in ULIP is not a one-time task. Like most investments, you have to monitor your fund’s performance to ensure it is on track with your goals. You also want to rearrange it from time to time depending on the market conditions to make sure you gain better returns.
So, what are the kinds of funds available under ULIP plans? Which ones should you choose?
Here’s a list of the top 4 ULIP funds that you can select from. Be sure to evaluate your financial goals and timeline to pick the one that best fits your needs.
1. Equity Funds
These are one of the most popular types of investments among people. Irrespective of whether you have a ULIP or not, you might have parked your money in equity funds to create wealth.
Under these top-performing ULIP funds, your money gets invested in equity shares and stocks of companies that are known to provide high returns. Since these instruments are directly related to financial markets, the risk is higher due to the volatile nature of the stock market. However, the potential for returns is also greater than most other investment options.
You can choose from large-cap equity, mid-cap equity or top 200 funds (investment in the shares of top 200 companies), etc., under a ULIP policy. Since equity funds are a riskier option, they are apt for long-term investments that provide scope for taking a considerable risk.
2. Debt Funds
Another fund that gets widely utilised for wealth creation is debt funds. As the name suggests, in debt funds, you lend money to the trust or entity from which you purchase them. In return, you receive interest, which is predetermined by the issuer. Some of the debt instruments include debentures, corporate bonds, government bonds, fixed income bonds, and treasury bills.
These ULIP funds carry medium to low-risk as compared to equity stocks. So, they are perfect for you if you are seeking safer investment options. You might also want to note that the returns are also moderate. If you are a conservative investor then this could be a great option.
3. Balanced/ Hybrid Funds
One of the rules of investing is to not put all your eggs in one basket. Spreading your funds across different instruments enables you to cut down the risk of losing money. It also ensures that you could benefit from long term wealth creation.
In a bid to allow you to enjoy ULIP returns and fulfil your goals, you are provided with balanced/ hybrid ULIP funds. In this, a part of your investment goes toward equity funds while the other is invested in debt instruments carrying fixed income. By allocating your wealth across high and low-risk investment options, you are reducing the level of uncertainty and enhancing your chances of wealth creation in the long term .
Since these funds help you reap the benefit of stable returns, they are one of the top-performing ULIP funds.
4. Liquid Funds
Need some liquid options for investment to meet any unforeseen requirements? Then, you can opt for liquid funds under your ULIP plan.
These types of ULIPs invest your money in liquid money market instruments that enable you to draw funds within a short period of time. This includes treasury bills, certificates of deposit, etc. These funds usually carry shorter maturity periods that range from a few weeks to months.
They are perfect for meeting short-term financial goals and if you have a low tolerance for risk as they are safe investment options.
A ULIP policy is an excellent investment option that provides dual benefits of insurance and savings.
Tata AIA Life offers these and many more ULIP fund options to support you in achieving life goals. Now that you know these ULIP funds, you can make an informed choice and enjoy great returns!
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Insurance cover is available under the product.
The products are underwritten by Tata AIA Life Insurance Company Ltd.
The plans are not a guaranteed issuance plan, and they will be subject to Company’s underwriting and acceptance.
For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
IN THIS POLICY, THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER
THE LINKED INSURANCE PRODUCT DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICYHOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR.
Past performance is not indicative of future performance.
All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.
Please make your own independent decision after consulting your financial or other professional advisors.
*Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility for tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.