Financial planning is crucial for every person regardless of what stage of life they are in. In today’s time, if you want to live a good life, you need to do more than just paying your bills. You have to make sure that you are using your earnings optimally and putting it in the right places. This means carefully deciding what you are going to spend and where. Generally, people think of financial planning as simply spending less money. However, there is much more to the idea. An important part of financial planning is to use your money to make more of it. This means making the right investments.
With so many investment options available, picking the right one is next to impossible. Moreover, the right investment option is the one that is best suited to your financial goals. Hence, you need to find the investment option that is best for you. Additionally, as a big part of investing is to be safe, financial security is also very important. Hence, the ideal option to put money into would be something that helps with investment as well as financial security. If you are someone that is looking for an option like that, you should look into Unit-linked insurance plans. Here are just a few of the ULIP benefits:
Wide range of investment options
ULIPs are not a simple buy-and-renew policy like many other life insurance options. They offer a long list of investment options that can be high, medium,orlow risk. Moreover, all these options are available under the same plan in the form of different funds. Firstly, you should look at how much of a risk are you willing to take with your money. Based on your riskappetite, you can choose the right plan and invest in the right funds.
Additionally, ULIPs allow policyholders to select either your premium or your sum assured depending on your buying needs. They are also flexible for policyholders when it comes to increasing the investmentthrough top-ups. This allows you to make the most out of opportunities that present themselves.
Many other types of life insurance policies do not offer all their information until you have purchased the policy. On the other hand, insurance providers offering ULIPs give you the charge structure, investment value, expected return rate, and the complete policy tenure among other things before you purchase the plan. This way, you can understand the product that you would be investing your precious money into. Additionally, you can also calculate the premium using a ULIP calculator.
Moreover, ULIP providers also give their policyholders the annual account statement, quarterly investment portfolio, and a daily report on the NAV of the plan. This makes sure you are aware of how your investment portfolio is doing.
Liquidity is an interesting concept in the world of finance. It is essentially knowing how much you own against how much you can spend. Once you buy something, it becomes an asset. Technically you own the monetary value of it. But the question is how quickly and easily you can procure that monetary value by selling that asset? For example, you own a car worth ₹ 12 lakhs. While on paper you are ₹ 12 lakh richer, unless you can sell the car instantly and receive the money, your liquidity is considered low. It is the same with any financial property you own. In the case of ULIPs, you own the units used to trade in the investment market. However, you need to know how quickly you can withdraw those units and receive the money. Fortunately, ULIPs offer a lot of flexibility with withdrawals. In the case of an unforeseen event, you can do partial withdrawals after the lock-in period of the plan.