“Highest NAV Guaranteed” ULIP: A safe mode of earning good returns

Everyone wants to earn more money in less time. For this they constantly strive to invest their money in some form of investment funds, gold, or mutual funds, insurance policies etc. Investment companies also take full advantage of the situation and keep on introducing new products with customized solutions to capture the interest of investors across the country.

Insurance companies introduced Unit-linked Insurance Plan (ULIP) with an aim that it would serve the purpose of dual benefits such as insurance cover and market based returns for customers. ULIP policies are market driven products and works on the principle of Net Asset Value (NAV) which summarizes a fund's performance and gives indications of the future trend of the fund. Net asset value (NAV) is one of the major parameters to calculate the performance of any fund in ULIP policy. NAV is by far the most commonly used denominator to compare funds. These funds are ranked on their NAVs. ULIP NAV is calculated by dividing the net asset value of the fund by the number of units. However, most of the companies emphasize on newly launched “Highest NAV Guaranteed” ULIP returns.

Markets are very curious about this newly launched concept of ULIP that are attracting investors because of the name of the product that assure highest NAV returns. The word highest returns make it ideal for customers to go for the purchase. But the article will discuss what highest ULIP NAV actually is and why does it make sense to go in for it purchase?

Highest NAV Guaranteed gives the impression to the investors that one will participate in the equity market growth. But for these products what a company guarantees is the highest value of its own NAV. In highest ULIP NAV the portfolio is managed and allocated proportionately between debt and equity in such a way that the highest NAV attained is locked by moving portion of assets to debt.

Over a period of time, equity assets are bound to move to debt. The reverse, however, is not a good option because when equity markets crash, the highest NAV locked is bound to differentiate.

Some of the advantages of highest ULIP NAV products are as follows:

•These products offer capital guarantee from day one which is a must for the mental peace of the consumers. In the volatile conditions of the market, investors worry a lot but such assured returns give them a hope to sail successfully during the market tidal wave. This makes buyers prone to buy the product.

•The Younger investor is; better would be the returns. Investors get ample time to experiment with the customer funds and then produce a balanced result at the end.

•You get the advantage of equity exposure in the beginning and over the time it is shifted to debt which is in line with the requirements, to an extent. But here the change will be much faster to debt.

•Fund switching helps to accumulate your wealth through debt oriented product as one end is drawn upon by equity shooters in earlier stages. 

If you’re looking for modest returns then ULIP NAV are policies to invest for. These products surely know how to counter equity storms and produce balance funds earnings out of your investments.