When it comes to long-term investments, ULIPs are one of the best options available in the market. Unlike other investment options, ULIPs offer a wide range of benefits that can help you grow your money over a period of time. This blog post will discuss how staying invested in ULIP for 10 years can maximize your investment.
We will also explore the different features of ULIPs that make them so popular among investors. So, if you are looking for a long-term investment option, then read on!
An Overview of ULIP Investments
ULIP or Unit Linked Insurance Plan are a type of insurance product that offers the policyholder both life insurance and investment opportunities. The investment portion is usually invested in mutual funds, giving the policyholder the potential to grow their money while also being protected in case of death or other unforeseen circumstances.
The dual benefits of market-linked returns and life cover make ULIPs one of the most sought-after investment plans.
Wealth Expected to be Created Within 10 Years through ULIPs
If you are looking for a long-term investment option, then Unit Linked Insurance Plans (ULIPs) are one of the best choices available, with returns ranging from 10% to 12%. What’s more, if you stay invested in ULIP for 10 years, then you can maximize your investment and create wealth within that time frame.
The returns that ULIP provides are much better. Moreover, your long-term returns can be negatively impacted due to inflationary trends. ULIP can help you nullify this factor by allowing you to choose a policy with a lock-in period of ten years or more.
Reasons ULIP are Perfect for 10 years of Investment
Here are the major reasons why you must choose to invest in ULIP for 10 years:
1. Tax Savings
A ULIP plan offers you dual benefits of life insurance and investment. Thus, allowing you to save taxes under different sections of the Income Tax Act.
Under Section 80C, you can claim a deduction of up to ₹150,000 for the premiums paid towards your ULIP policy.
Unit Linked Insurance Plans offer great flexibility in terms of the amount you wish to invest, as well as the tenure of your investment. You can start investing with as little as ₹500 per month and stay invested for just five years.
3. Fund Switching Option
You can switch your ULIP funds as per your risk appetite. As your investment period lengthens, you can afford to take on more risk because you have time to recover from market volatility. This is why it’s important to review your ULIP fund choices at least every few years and ensure they align with your current goals and risk tolerance.
The Bottom Line
Investing in ULIPs for the long term is crucial to maximize your investment and get the most out of your policy. By staying invested for at least ten years, you give your investment the time it needs to grow and compound, resulting in a much larger payout when needed.