Moving forward while choosing the best ULIP plan

Insurance is something that has shown its importance to each and every individual. Every single thing today can be insured. The banks and financial companies provide their own policies to protect the insured person from any financial deformity. Some of the most common insurance types are life insurance, car insurance, home insurance, health insurance etc.

 

When you avail a policy, the company is liable to all the expenses caused to your property. There is a fee the policy holder is required to pay on an annual basis. However, this premium would be of no use if there is no coverage provided. But what if there is option for an investment that not only gives you cover but also gives you an opportunity to earn regular returns.

 

A unit Linked Insurance Plan (ULIP) is a product offered by insurance providers in India that is different from a pure insurance policy. It provides the investor with benefits of both insurance and investment in a single integrated policy. It allows the holders to direct a part of their premiums into different types of funds like equity, debt, hybrid, money market etc.

 

Before planning to avail the best ULIP plan, it is essential to know how the whole process works. A part of the premium paid is employed to provide with an insurance cover to the insured person while the remaining portion is invested in an array of equity and debt schemes.

 

All these investment options carry their own levels of risk and return potential. However, if the risk is high, higher would be the return capability. Equities in general involve highest risk but they also give higher returns that are beneficial over the long run.

 

 Just like mutual funds, the ULIP also helps in investing in a pool of market instruments which offer regular returns. One can select a type of fund i.e. debt or equity or even a mix of both based on the needs. NAV (Net Asset Value) helps in deciding the net rate of ULIPs. The fund’s performance and market conditions help in determining the NAV.

 

Today, the insurance companies have come with their own ULIP plan with their own unique features and benefits. No more is there a need for a person to be physically present at a company’s office to know about the plans they have to offer. All of this can be done within minutes over the internet. However when it comes to buying ULIP plans in India, there are certain aspects to be taken care of. The note below can make the task easier.

 

·         Understanding your need and risk profile-A plan suited best for you needs to be identified. This way you will be able to know where your premium amount is invested and the risk involved.

·         Compare ULIP products from the other ones-In order to choose the best ULIP plan in India, compare the ones offered by the insurance companies. This will help you make the selection task much easier.

·         An Insurance advisor- An advisor can always help you guide through the information related to the various schemes and policies. He/she will give you an unbiased opinion on what plan will suite you the most.

 

In India, the ULIP schemes have emerges as a vital long-term protection and a savings vehicle. It is just about the perfect choice for availing an insurance cover along with an opportunity of enjoying return benefits.