When it comes to tax savings, it’s important to have a plan in place. Investing makes sense if you are looking to save money over the long term. You don’t just want to invest and hope for the best, you want to make sure your investments will save you money over time & help you achieve your goals. There may be times when you need an investment option that will save you money immediately rather than later.
Unit linked insurance plans (ULIPs) are one way of doing this. In a ULIP plan, investors combine life insurance with mutual funds that allow them to build up their wealth over time while having access to their money whenever they need it.
What is a ULIP Plan?
Unit-Linked Insurance Plans, or ULIPs for short, are insurance types that allow you to invest in funds of your choice and benefit from a life cover. The premium paid towards ULIPs is divided into two parts. The premium you pay for the ULIP goes into the first part of the plan—the insurance cover. This policy covers disability and death benefits. On the other hand, the second part of the investment is invested in debt or equity funds. You can increase or decrease the ratio of your ULIP investments to your insurance cover or investment portfolio according to your future financial goals.
ULIPs are ideal investments for your long-term goals because they allow you to choose between equity, debt, and funds as per your risk appetite and goals.
Benefits of ULIP
1. Long-Term Investment
ULIPs are an excellent way to save on taxes. They offer more than one-year of tax-saving benefits, so if you had to make a quick decision this year, you could continue the same plan next year.
2. Highly Customizable
ULIPs can be changed at any time and for any reason. You can change your portfolio strategy, allocation, and even transfer funds to a different fund option within the ULIP.
3. Enhancement of Your Life Cover
ULIPs are a long-term investment strategy that can help you reach your financial goals. In addition to providing life insurance, ULIPs also provide financial security for your family.
In addition to providing life cover, ULIPs can help protect your money from market fluctuations and provide other benefits.
4. Tax-Free Benefits
The premiums paid towards the ULIP policy plan are exempt from tax under section 80C. of the income tax Act, 1961.
5. Adjust Investment Amount Later
When you invest in a ULIP plan, it is important to keep a flexible investment amount.
The 10% rule of taxation states that you can increase or decrease your investment amount in a ULIP later. When you buy without a long-term goal, you should keep the scope open for investing a higher sum in the ULIP plan if your income goes up.
Who should buy ULIP?
ULIPs are investment plans that offer the investor the flexibility of choosing from a range of funds and investment options. With a ULIP, you can choose from multiple fund options to suit your needs. These funds include equity, debt, gold, and hybrid funds.
Besides being flexible in fund options, ULIPs offer a range of other benefits, such as tax benefits and flexible lock-in periods. You can choose whether to invest in a ULIP for five years or even ten years at one go.
This makes it ideal for those looking for long-term investments and investors who aren’t sure about their investment goals yet but want to invest some money anyway.
Avail tax benefits – ULIPs are a great option for people who want to save on taxes. According to Section 80C of the Income Tax Act, the premiums you pay towards your ULIP policy can be deducted from your taxable income. In addition, death benefits paid under the plan are tax-free as per Section 10D of the Income Tax Act.
A single plan that offers dual benefits – You can protect your loved ones with an ULIP plan and ensure a steady income stream after retirement. A single policy offers both insurance and investment benefits. ULIP plans provide life insurance that protects your family from financial hardship and a variety of investment instruments that help you maximize your returns.
High returns – A ULIP offers higher returns and a variety of investment options. These include debt funds, equity funds, etc. Based on their performance and risk appetite, you can choose any of these. Depending on the market outlook, you can also switch between funds.
Long-term wealth creation – Switch to a ULIP to achieve your long-term financial goals. The lock-in period for unit-linked insurance plans is five years, so you’re invested for a longer period of time. Affording your long-term financial goals, such as owning a home or car, sending a child to college, getting married, and many other things, is easier when you have accumulated money.
Best Saving Plan in India
Saving and investing is a great way to provide a legacy for your grandchildren or to find the Best Saving Plan in India. Diversifying your investment portfolio is also recommended by many experts.
If you’re considering adding life insurance to your plan, it’s a smart move. Investing in a ULIP plan offers you the opportunity to invest in your favourite funds and benefit from life insurance at the same time.
The following are some of the Best Saving Plans in India.
Invest 4G Plan – Canara HSBC Oriental Bank of Commerce –
Canara HSBC Oriental Bank Of Commerce provides Invest 4G ULIP, their new age ULIP, available online. New-age investors looking to achieve their long-term financial goals should consider this investment option. This zero-commission investment product can boost your wealth and build loyalty. Due to its minimum charge structure, invest 4G performs better than other investment options in terms of returns.
Key Benefits to Invest in 4G’s ULIP Plan are –
Switching and redirecting between fund options is flexible
Eight different funds and four portfolio strategies are available
Adding Loyalty & Boosting Wealth
Mortality Charges Returned at Maturity
HDFC Click 2 Wealth –
This plan link returns to the market through unit-linked, non-participating life insurance. The plan is ideal for investors looking for long-term investments. HDFC Click 2 Wealth ULIP Plan contains the following benefits:
You can invest in 10 different funds to maximize your returns.
You can switch for free unlimited times.
Minimum Charge*: When managing your funds and when you take out a life insurance plan, there is only a fund management charge.
You will receive an additional 1% of your fund’s premium for the first five years.
If you select the Premium Waiver option, you will not be charged future premiums, and your funds will remain invested in the event of the death of the proposer.
For post-retirement income, you can systematically withdraw funds.
Return of Mortality Charges (ROMC) on Maturity: Only the Life Assured will be refunded the Mortality Charges upon maturity if Premium Waiver is selected.
Having a sound retirement plan is essential for every working adult. Building a fund to use in the future may not be enough with the increasing price of essentials and commodities. It would be wise to choose a Best Saving Plan in India that includes life insurance. You can invest in the Invest4G ULIP plan at Canara HSBC Oriental Bank of Commerce Life Insurance, which allows you to select among seven funds with varying risk and reward equations. In addition, it allows you to move between different types of fund options based on market fluctuations while also taking into account your changing risk appetite.