Every person has particular goals that they want to achieve in the future. Some of them could be going abroad for higher education, settling down in a foreign country, travelling the world, etc. But accomplishing your ambitions requires capital that cannot be obtained only via saving. Thus, you have to invest money in financial instruments suitable for you and fulfil your life goals. Unit-Linked Insurance Plan (ULIP) is one of those tools that offer a life cover along with an investment component. But if you are wondering ‘why should I invest in ULIPs?’, here are five life goals that you can accomplish with this investment tool.
Top Five Life Goals That You Can Achieve with ULIP Insurance
1. Retirement Planning
Sooner or later you will have to sit down and start your retirement planning which will include figuring out the corpus required following 60. After understanding your expenses and estimating the capital you need, you also need to begin investing in financial instruments accordingly as saving up doesn’t cut it. Because ULIPs have an investment component, you can keep contributing towards the funds to get lucrative returns. Also, as you are accumulating funds for your retirement, staying invested for the long-term can earn you high returns. Thus, by investing in ULIP plans, you can plan your retirement and generate the required capital.
2. Travel Goals
Life can be stressful with a full-time job and responsibilities at home. Thus, most people love taking a break every now and then and travel to some quaint location. Many also consider going on an extended travel spree after 10-15 years of working. If you are one of them, you do not have to work tirelessly for that vacation but rather contribute towards a long-term tool like ULIP. Holding your investment in funds for a lengthy period can help achieve those travel goals you have longed for.
3. Higher Education
As parents, we love giving our children the luxuries that we never enjoyed. So be it a renowned institution for grade school or an opportunity abroad at a prestigious university. Many individuals begin saving up for such moments that will give their children a better life. Contributing towards a Unit-Linked Insurance Plan can give you the required capital but also safeguard your family in case something happens to you. The dual advantage of a ULIP policy makes it a beneficial option as a life cover is also as important.
4. Financial Backup
Be it for your parents or your spouse, a financial backup has to be available in case of a mishap. And when you are the only earning member of the family, leaving them without any safety net can be worrisome. A life cover is the best possible cushioning you can provide to your loved ones if something were to happen to you. The death benefit can offer financial stability and allow them to carry on without becoming dependent on anyone else. Insurance plans like ULIP enable you to choose the sum assured amount to be given to your beneficiary keeping their expenses in mind.
5. Tax Savings
Who doesn’t like reducing their tax liability even if it means investing some money? Though it is advised to not consider an insurance plan simply as a tax savings tool, you can enjoy substantial ULIP tax benefits. The premiums paid towards securing an insurance policy can be claimed under Section 80C of the Income Tax Act, 1961. There is a maximum cap of INR 1,50,000 that can be claimed per financial year. The maturity or death benefit in ULIP insurance can also be claimed for tax deductions under Section 10(10D). This way ULIP becomes a lucrative method of saving on taxes while enjoying a financial safety net.
To achieve more such long-term goals, ULIP policies can play a vital role in fulfiling them. It is a multi-faceted insurance plan offering several benefits to secure you and your loved ones.