ULIP (Unit Linked Insurance Plan) plans are one of the many different types of insurance plans that are present in India, although they might not be very popular compared to the traditional policies that are being sold by the insurance companies of India. In this article, we will take you through the eight different advantages of ULIP plans and how they can come in handy to meet the financial needs of your child when the need arises. These tips will help you make an informed decision about which kind of policy to choose between these two options if you’re planning on protecting your future with an insurance plan.
1) What is a ULIP?
ULIPs are long-term investment plans that offer both insurance coverage and investment returns. The two most common types of ULIPs are those that provide death cover as well as those that do not provide life cover.
2) Tax benefits
A ULIP is typically more expensive than other types of insurance plans. However, because it invests in both equity and debt instruments, it also has potential tax benefits. Equity investments are not taxable while interest payments can be claimed as deductions.
An individual can save up to 30% on tax liability by investing in an equity-oriented ULIP plan. Also, the interest income from debt instruments is typically taxed at lower rates (normally 20%) than the regular income on savings accounts or fixed deposits.
3) Why invest in a ULIP?
A ULIP is an equity-linked insurance policy that not only provides you with the security of an insurance cover but also allows you to invest in other financial instruments. You can make your ULIP grow either by investing in stocks or by opting for a regular premium payment plan.
The investment part is optional and depends on how much risk you want to take. It also helps if you are looking to meet your child’s educational needs as it would help provide funds for school fees, laptops, books, etc., all thanks to your investments.
4) Protection benefits
ULIPs are long-term plans that come in two varieties, those that provide life insurance coverage, and those that provide both life insurance coverage and savings. When you invest in a ULIP, the premiums you pay will be invested in stocks, bonds, or other assets.
Income from these investments is paid out to you either on an annual basis or when you leave your job. The main advantage of this type of plan is the tax benefits it offers. In India, there is no tax on income earned by the investments made under an annuity plan like ULIPs.
5) Growth opportunities
For children, growth opportunities may be more about building relationships than monetary gain. Still, every child needs to know how to manage money.
Some advantages come from allocating funds for their future. Not only does it give their parents peace of mind, but it also provides children with an opportunity to learn good financial habits while they’re young.
6) Bank on the future
Having your child take part in a ULIP plan can be an excellent way to prepare for their future. Not only do you get peace of mind knowing that they’re covered, but you can also feel good about helping them financially in the future.
With this type of plan, they’ll have no worries as they enter adulthood because they’ll already be invested in something that will provide them with financial security.
7) Easy access to money when you need it the most
When you have children, it is always important to be prepared for their future. This includes the best way to save money for them.
One great way to do this is through a ULIP plan. With this plan, you can put away money for your child that will not only be available when they need it the most but will also grow over time.
8) Income generation
No matter your financial situation, it is never too early to start planning for your child’s future. With the recent economic downturn, many parents are looking for ways to help their kids save money while also providing them with a good education.
One way to do this is through an Unpaid Lifetime Income Protection plan or ULIP. Unlike other insurance policies, this type of plan does not require you to make any payments until after your child turns 18 years old.
This means that you can provide more stability for your child without having to take on any new debt. Plus, if you think about all the money you will be saving by avoiding college tuition, then the investment in a ULIP may be worth even sooner than expected!
When it comes to long-term wealth creation and life coverage, investing in ULIPs from Canara HSBC Life Insurance, Invest 4G Plan is the best option out there. With Invest 4g Plan multiple portfolio management options, flexible premium paying options and tax benefits along with a wide array of other benefits, it’s no wonder why so many people choose the plan for their insurance needs. To find out more about how we can help you meet your financial goals, contact us today or visit us online to find more information on Invest 4g Plan.
There are many financial instruments available in the market today to help you with your child’s education needs. One such financial instrument is the ULIP plan. This plan can be used by parents to accumulate funds that they can later use towards their child’s educational needs. In this article, we have focused on some of the advantages of ULIP plans and how they can help with your child’s finances and education requirements.
