Life Goals Loading…

    11

    Notifications11

    • Convert Your Saving into Investments to Fulfil Future Life Goals.

      CALCULATE NOW
    • Get Life Cover worth Rs.1 Crore at Rs.18 per day2 – Bajaj Allianz Life Smart Protect Goal

      PLAN NOW
    • Fulfill your Life Goals with Bajaj Allianz Life Goal Assure

      PLAN NOW
    • Life Insurance Term Plan with Return Of Premium

      WATCH NOW
    • Get your Life Goals Done with Bajaj Allianz Life Smart Assist – BINA MILEY MIL-KAR

      KNOW MORE
    • Checkout Quarterly Market & Macro Overview - Oct'20

      KNOW MORE
    • Is your weight right according to your height?

      Calculate BMI Now
    • Find out your Immunity Score right away!

      Calculate Now
    • How much Insurance do I need

      KNOW MORE
    • Paying your Renewal Premium is Quick and Easy!

      Pay Now
    • CIO commentary on RBI Monetary Policy: October 2020

      READ MORE

    Looking for a Term Plan?

    Get Exclusive Discount on online purchase^

    Have us call you

    Please enter a Name
    Please enter a Mobile No.

    ^3% Discount is available for regular premium and limited premium payment frequency under all variants of Bajaj Allianz Life Smart Protect Goal A Non Linked, Non-Participating Pure Life Term Insurance Plan.

    Please select a option
    Please select a option

    Thanks for sharing your details, A Sales representative from
    Bajaj Allianz Life will contact you shortly.

    Dear Customer, we request you to connect with us in our next business working hours, (Monday to Saturday 24*6) Thank you, Have a great day ahead

    Have Us Call You

    Get your Life Goals Done

    Have us call you

    Please enter a Name
    Please enter a Mobile No.
    Please select a option

    Are ULIPs Good As A Long-Term Investment?

    Are ULIPs good for long term

    Are ULIPs Good As A Long-Term Investment?


    calender-blue

    July 06, 2020

    By : Bajaj Allianz Life

    When one hears about unit-linked insurance plans, the first question that comes to the mind is this-

     

    Are ULIPs good for the long term?

     

    Yes, ULIP plans are one of the preferred investment options for the long term. ULIPs are a financial tool that helps you enjoy the protection of an insurance cover and simultaneously provide investment opportunities. If you dream of owning a house in 15 years or going on a world tour after retirement, ULIP investment is the ideal option for you. Though ULIP is an insurance product, it provides all the benefits of an ideal investment product like tax savings and market-linked returns.

    When you invest in a ULIP, the insurer provides you with a variety of fund options. After investing, the policyholder is allocated fund units depending on the fund he/she opts for. ULIPs provide an option to choose between equity or debt funds or a combination of both. Risk-averse investors can opt for debt funds, while people seeking higher returns can opt for equity funds. Both investment options lead to substantial ULIP returns over the long term and help in minimising the effects of inflation. One of the major ULIP benefits is the flexibility to switch between funds as per the market conditions. It is important to have a long-term view while investing in ULIPs. A number of factors make ULIPs one of the preferred long-term investment options –

    • Disciplined savings

    After certain regulatory changes in the past, ULIPs have a minimum lock-in period of five years, which inculcates a sense of discipline in investors. Depending on the premium payment term of the policy and the premium payment frequency chosen, one has to pay his/her premium on a monthly, quarterly, half-yearly or on an annual basis. ULIP premiums are a form of regular savings. Gradually, it develops a habit of saving rather than spending. Disciplined investing over a period of time leads to a substantial accumulation of wealth.

    • Market-linked returns

    ULIP investors are provided with an option to choose from a host of equity or debt funds. Investors can also opt for a combination of equity and debt funds depending on their risk profile and return expectation. Investors seeking to build a large corpus can choose to invest exclusively in an equity fund. Equity investments are known to generate considerable returns over the long term, which helps in negating the effects of inflation. Investing in equity funds through ULIPs with a long-term horizon also solves a key issue. It averages out the impact of short-term market movements on the value of the investment. When the market is down, your investments will fetch a higher number of units and when the market is at its peak, the same investment will buy a lower number of fund units. Over time, the cost of all the units averages out, giving consistent returns. ULIP returns are exempt from the long-term capital gains tax, essentially boosting the overall returns for the investor. Tax benefits are subject to provisions of Income Tax Act, 1961, as amended from time to time.

    • Flexibility to modify allotment

    Investing is not a linear process. The strategy has to be modified according to the life goal and the market condition. A crucial ULIP benefit is the feature that allows switching between funds. Investors can choose to transfer their units from one fund to another. Switching between funds allows investors to align their portfolio with their life goals and mitigate risks emanating from market movements. For instance, if your life goal is over a decade away, you can invest in equity funds, gain from higher market returns in the initial phase, and later transfer the investment into a debt fund. Similarly, if you think equity markets are going to be in a turmoil for a period due to a particular global event, you can shift your units to a debt fund for safety.

    • Power of compounding

    The power of compounding is the reason for the success of a number of famous investors. Compounding is simply the process of earning return over the interest earned on the initial investment. When your money starts earning money it is known as compounding. The actual magic of compounding can only be seen after you remain invested for a long period. As the returns accumulate and become the principal amount, the overall returns grow exponentially in the later years of the investment. One should stay invested in ULIPs for the long term to achieve important financial goals.

    • Tax Benefits

    ULIP benefits also extend into the tax-saving territory. Popularly referred to as EEE (exempt-exempt-exempt) investments, ULIP offers tax benefits at all the three stages of the policy course:

    1. Death of the policyholder

    Death benefit paid to the nominee after the death of the policyholder is tax-exempt, as per Section 10(10D) of the Income Tax Act, 1961, subject to provisions stated therein.

    2. Maturity of the policy

    In case the policyholder survives the policy term, the pay-out received upon maturity of the ULIP plan is also exempted from tax, subject to satisfaction of conditions mentioned under Section 10(10D) of the Income Tax Act, 1961.

    3. Partial withdrawal

    Partial withdrawal is also exempted from tax, subject to satisfaction of conditions mentioned in Section 10(10D) of the Income Tax Act, 1961.

     

    Conclusion

    If the returns are good and the investment is tax-efficient, it can be considered suitable for the long term. ULIPs with market-linked returns, tax savings and adequate flexibility are one of the preferred investment options for the long term. With the dual benefit of insurance and investment, ULIPs cater to a wide variety of investors. If you have life goals like buying a house or funding children’s education, you may choose to invest in a ULIP and enjoy a stress-free life.

    References:

    How ULIP helps you meet long-term life goals

    How ULIP meets your insurance and investment needs

    Bajaj Allianz Life Videos

    Video Icon

    Khushiyon Ka Return Gift | Happy Diwali | Bajaj Allianz Life

    Video Icon

    #SavingsToLifeGoals - Bajaj Allianz Life

    Video Icon

    Smart Protect Goal | Pay For 5 Years, Get Term Insurance Coverage For Life | Bajaj Allianz Life

    Video Icon

    Happy Independence Day 2020 | #IndiaSolveKarteJaa | Bajaj Allianz Life

    Video Icon

    Flexi Income Goal – Variants, Features, Benefits Explained

    Video Icon

    Why Choose Bajaj Allianz Life To Help Get Your #LifeGoalsDone?

    Video Icon

    #DostiWithDad - Happy Father's Day | Bajaj Allianz Life | Life Goals Done

    Video Icon

    Covid-19 Survivor Story | Bajaj Allianz Life Smart Protect Goal | Bajaj Allianz Life

    Video Icon

    Lage Raho India - Keep getting your #LifeGoalsDone

    Video Icon

    Don’t Let COVID-19 Lockdown Get in The Way of Your #LifeGoals

    Video Icon

    Coronavirus (COVID-19) Advisory Video #DooriHaiZaroori

    Video Icon

    Coronavirus COVID-19 impact on markets - CIO Commentary | #KeepCalmStayInvested

    Video Icon

    Bajaj Allianz Life Leadership Team | #PlankForIndia

    Our MD & CEO, Tarun Chugh launches #PlankForIndia campaign and planks with Sanjiv Bajaj MD & CEO, Bajaj Finserv and Chairman Bajaj Allianz Life & the rest of the group leadership team.

    Video Icon

    #PlankForIndia | Bajaj Allianz Life

    Bajaj Allianz Life will contribute to the training and development of India's future sports stars. Come together to Plank for Good Health, PlankforIndia.

    Video Icon

    #PehlaDinPehlaResolution

    #PehlaDinPehlaResolution | Happy New Year | Smart Protect Goal | Bajaj Allianz Life

    Video Icon

    Bajaj Allianz Life Goal Assure

    Bajaj Allianz Life Goal Assure - A ULIP Investment Plan To Achieve Life Goals

    Video Icon

    Valentine's Day

    Valentine's Day

    Video Icon

    Bajaj Allianz Health Care Goal

    A Comprehensive Health Insurance Plan with Critical Illness Cover | Bajaj Allianz Life Health Care Goal

    Video Icon

    #36SecPlankChallenge video

    Promote Healthy Living for a Better Tomorrow with our #36SecPlankChallenge

    Contact Us

    Bajaj Allianz Life Insurance Company Ltd.

    Bajaj Allianz House, Airport Road, Yerawada, Pune - 411 006, Maharashtra

    Tel No: 020-66026773

    Fax No: 020-66026789

    Branch Visit Timings:

    Weekdays - 9:00 AM to 3:30 PM

    Customer Care Helpline:

    1800-209-7272

    Monday to Saturday: 9:00 AM to 7:00 PM (IST)

    For NRI: +91 20 67871700 (Call charges apply)

    Monday 07.00 AM to Sunday 07.00 AM

    Sales Enquiry Helpline:

    1800-209-4040

    Monday to Saturday: 9:00 AM to 7:00 PM (IST)

    For NRI: +91 20 67688888 (Call charges apply)

    Monday to Saturday: 9:00 AM to 7:00 PM (IST)

    Find Us Online