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Why Is ULIP The Right Investment Option For The Long Term?

24-June-2021 |

When making investment decisions, it is essential to consider the long term. If you make strategic investments, you can reap various benefits such as relatively high long-term returns, tax* savings, etc., for many decades to come. ULIP insurance plans are one such long-term option to consider. A ULIP plan combines the benefits of a term life insurance policy and a profitable financial investment.

 

If you are wondering how ULIPs work well as a long-term plan, let’s discuss its various features and advantages that make it a strong contender for your investment portfolio.

 

Why ULIPs are good for the long term

 

Here’s why ULIP plans can be a great addition to your investments and life insurance protection option for the long term

 

  • Dual benefit

 

When you holistically look at your financial portfolio for the long term, you have to consider different financial needs such as wealth creation, life insurance, health insurance, retirement planning, tax* saving, etc. A product like ULIP insurance designed to cover two separate financial needs by way of one policy is advantageous to your portfolio. With a ULIP plan, you get a life insurance cover with the opportunity to invest and grow your money. And it doesn’t stop here. Depending on the ULIP policy you opt for, you can also add health riders# such as hospitalization, disability, critical illness, etc.

 

  • Flexibility and variety

 

New age ULIP plans offer investors benefits at par with mutual fund schemes. This means you can choose funds according to your financial goals and decide between equity, debt, liquid, balanced, cash, etc. There’s variety in the funds to choose from and added flexibility with the fund switching facility. Tata AIA Life Insurance offers Smart Sampoorna Raksha(UIN- 110L156V02), a unit-linked, non-participating, individual life insurance plan for savings and protection. You have 11 different fund options to choose from under this ULIP insurance plan, and you can pick any or all of them, depending on your goals.

 

  • Tax* saving

 

When you’re making a long-term investment, you cannot ignore the tax planning aspect. Even though your primary investment goal may not be to save tax, it’s prudent to figure out if you can. With a ULIP policy, you get a tax deduction for the premium you pay for the policy under section 80C of the Income Tax Act, 1961. The proceeds from your ULIP plan could also be tax-free. Considering the tax-saving aspect, ULIP plans are definitely an investment to consider for the long term coupled with life insurance protection. It’s essential to note that ULIP is a kind of investment where you buy the policy once, but you avail of the tax benefits every year when you pay the premium.

 

How ULIPs can give high returns

 

Returns are a primary aspect to consider while making any investment, especially one for the long term. ULIP plans are capable of providing high returns. You just have to keep certain things in mind when investing in a ULIP insurance plan.

 

  1. Asset allocation

  2.  

    While saving in a ULIP policy, remember to optimize your asset allocation. By investing in different types of funds, you can diversify your portfolio and minimize market risks. So, if one of the asset classes you invested in is making a loss, it can be compensated by another asset class that is making a profit. This advantage of asset allocation is further enhanced in ULIP plans due to the fund switching facility.

     

  3. Life stage-oriented decisions

 

ULIP plans make for a good long-term investment as they allow you to consider your changing goals as per your life stage and also offers life insurance protection. For instance, if your ULIP plan is for 25 years, then as time passes, your risk appetite and priorities will change. As you get closer to retirement and your risk appetite decreases, you may want to switch from equity to debt funds.

 

Conclusion

 

ULIP plans offer numerous benefits, including a life cover, high returns, tax*-saving, and flexibility, and qualify as a safe and lucrative long-term investment. You can figure out the right plan and premium amount for yourself using an online ULIP calculator.

 

L&C/Advt/2022/Mar/0681

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Need more information?

Let us help you

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

Looking to get a new plan? 

Connect with us now

+91

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

People Like You Also Read

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Read More
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Read More
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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA), Tata AIA Life Insurance is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimer
  • 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 it will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read 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

  • *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 on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.

  • 1Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term and Age at entry

  • #Riders are not mandatory and are available for a nominal extra cost. For more details on the benefits, premiums and exclusions under the riders please refer to the Rider Brochure or contact our Insurance Advisor or visit our nearest branch office.

  • IN THIS POLICY, THE INVESTMENT RISK IN 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 POLICY HOLDER 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 advisor.

Need more information?

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.