During the ongoing pandemic, there is no better gift to gift to your loved ones than financial security. Going directly for an insurance policy that covers COVID-19 may appear to be one of your best bet, but there are a slew of pre-existing financial products that can give you the benefits you need to stay secure during this time and after. One such financial product is ULIP investments.
What is ULIP investment?
Unit linked insurance plans (ULIP) are investment options that also give you the benefit of a life cover. ULIP plans provide the dual advantage of insurance and market linked returns from investment. It works by investing your premiums into the type of fund of your choice while also protecting you with a life cover. During the pandemic, ULIP plans offer unique advantages that gives you and your family security and your financial portfolio an opportunity of wealth creation. Here are some of these benefits.
1. Market Linked Returns
ULIP plans may also serve the purpose of wealth creation. One’s premiums can be invested in equity funds, debt funds, or a combination of both One simply picks the funds available in the product they would prefer to invest in and you are good to go. Market-linked returns may tend to perform better due to time horizon and different market cycles and power of compounding that happens over the years. However, with the right investment horizon, the same volatility can lead to long term gains that help you beat inflation, where the growing living costs eat into your profits. During a pandemic, staying invested in your ULIP policy may help you compound your returns.
2. Flexibility in Investments
Once you have decided your funds you want to invest in your ULIP, these choices are not set in stone. Funds can be changed to one’s liking or you can rely on your insurance company’s automatic switching option (if available as per product conditions). You have the option to switch from debt to equity or vice versa as and when you see fit. You can keep a watch on the market and make your moves between funds strategically or seek advice from a subject matter expert who can help you with the decision-making.
ULIP benefits may allow you to maximize your returns even during trying times such as the ongoing pandemic.