ULIP stands for a unit-linked insurance policy which is one of the best investments you can ever make. ULIP plans give you life security and ensure the growth of your invested money. Life coverage and money growth are the main components of the best ULIP plans. There are a variety of features that are offered by these ULIP plans depending on the premium you choose.
Investment in ULIP plans is pretty simple to make but practical at the same time. The best part about buying the best ULIP plans is the security for your future self.
People need a certain amount of money to fulfill their needs and secure their future. As we all know, inflation is killing our financial situation, so making the best ULIP plans and investments that are worth your money and time is essential. The investment here is quite simple, the ULIP policy is flexible for your money, and you don’t need a considerable amount to get started.
Choosing the best ULIP plan can be pretty tricky, and every provider has something new to offer to understand the benefits and what are the terms. Read this article. When going for ULIP plans
What is the ULIP Plan?
ULIP plans are unit-linked insurance plans or life insurance plans that help you to grow your wealth by making safe investments in the financial market, guaranteeing you a certain amount for your future self.
The ULIP policy is an essential part of an investment to get a decent amount for the future resolving most of your problems. These ULIP plans are pretty different from term insurance as term insurance is a pure protection plan. The ULIP policy gives you overall protection while achieving your financial goal.
How Do ULIPs Work?
The investment for ULIP plans works in two components. The first is offering you life insurance, and the second is the growth of your wealth. To choose from the best ULIP plans, you can consider these ULIP plans as an asset investment where you invest your money for a specific time to get good results.
The insurance provider takes your money, giving you exceptional benefits for your investment. ULIP plans are created to keep an individual’s financial goals aligned and help them achieve their financial goals, offering life coverage. The best investment you can make is these ULIP plans where the risk is low, and the return is high, and ULIP plans can be the best choice.
The best ULIP plan is twisted into two portions. When you select the Best ULIP plan, the first portion functions as life insurance and the second is for growing your money.
The units are nothing but the value of the second portion of your ULIP plans, which is invested into funds of your choice; the value of your assets and how it’s supported will be discussed in this post, and ULIP plans at any point will be depicted as NAV. The NAV stands for net asset value, and the increase and decrease of the deal will be reflected.
The ULIP plans are pretty simple, and the liquidity is after the five years are over. The ULIP policy makes it easy to understand where your money will work for you and where you want them to invest it, which can be equity, financial bonds, mutual funds, or other investments. The risk is moderate, and the investment period is five years for going with the best ULIP plan.
Best ULIP Plans in India
| ULIP Plans | Minimum Entry Age | Maximum Entry Age | Min Premium | Premium Allocation Charge | Policy Admin Charge | No. of Funds | No. of Free Switches in a Year |
| HDFC Life Click 2 wealth | 30 days | 60 Years | Single – Rs. 24,000
Annual – Rs. 12,000 Half-yearly – Rs. 6,000 Quarterly – Rs. 3,000 Monthly – Rs. 1,000 |
No allocation charges | Nil | 8 | Unlimited free switching |
| Bajaj future gain | 1 Year | 60 Years | 1. Yearly – 25000
2. Half-yearly – 12500 3. Quarterly – 6500 4. Monthly– 2500 5. Top–up –5000 |
25,000 to 99,999 Annualized Premium – 1 Year 5.50%, 2-5 Years 3.75%, 6 Years+ 0.00%
100,000 to 199,999 Annual ed Premium – 1 Year 2.50%, 2-5 Years 1.75%, 6 Years+ 0.00% 200,000 and above Annualized Premium – 1 Year 0.00%%, 2-5 Years 0.00%, 6 Years+ 0.00% |
Rs.33.33 per month, inflating at 5% per annum every month | 7 | Unlimited |
| ICICI Wealth Builder | 0 Years | 69 Years | Rs. 48,000 |
i. One Pay: 3%(discount of 0.5% for customers who buy directly from the Company’s website) ii. All Top-up premiums are subject to an allocation charge of 2%(a discount of 1% in the premium allocation charge in Year 1 who buy directly from the Company’s website) |
i. One Pay: Rs 60 per month/720 per Annualii. Year 1 to PPT(policy term: 0.21% p.m.(2.52% p.a.)
iii. Above: 0.10%p.m.(1.20% p.a.) |
7 | 7 |
| SBI life e-wealth | 18 Years | 50 Years | Yearly: Rs 10,000 per annum
Monthly: Rs 1,000 per month |
Nil | Rs 45/month | 3 | Nil |
| Bharti AXA Life eFuture Invest | 18 Year | 60 Years | Premium Payment Term: 5 years
Annual – ₹ 18,000 Semi-Annual – ₹ 9,000 Quarterly – ₹ 4,500 Monthly – ₹ 1,500 Premium payment term: Single Pay ₹ 25000 |
zero allocation charges | 0.50% of annual premium subject to a maximum of Rs.6000 | 6 | 12 |
Here please check the explanation of the above ULIP plans.
1. HDFC Life Click 2 Wealth
HDFC Life Click 2 Wealth is one of the best ULIP plans, which offers good returns and family protection with fewer charges. There are three types of benefits: investment plus options, premium waiver option, and golden years benefit chance where you get mortality charges back. HDFC Life Click 2 wealth can be one of the best ULIP plans as they offer safe returns.
2. Bajaj’s Future Gain
One of the best options with good performance in the past, Bajaj has offered an excellent return to its customers. The premium provides death benefits in installment payables, and you can choose from 10 funds to build your investing portfolio. The entry age is 1 to 60, the maturity age is 18 to 70, and the minimum policy term is 10 years. The allocation charges are low, and with some essential documents, you can get started.
3. ICICI Wealth Builder
With an option to limited pay, regular pay, or one pay, the payment has an entry barrier of 0 to 55 and above age which makes it for 20 to 25. You have to decide the premium amount and the payment option to build your investment portfolio, and two options are available. Death and maturity benefits are assured to you and your family. You can buy the premium online, or you can ask for an advisor; along with it, you get loyalty points and tax benefits.
4. SBI life e-wealth Insurance
The second best ULIP plan for your investment is SBI life e-wealth insurance which provides immediate security to your family as its premium starts from Rs. 2000 per month, which makes it affordable and flexible. SBI allows you to choose from two options, and it’s a hassle-free option where you can take the premium online, availing tax benefits for your investment. The maximum age to buy this plan is from 5 years to 50 years, and the maturity age is 60 years. The payment method is regular, and you can put money monthly and yearly.
5. Bharti AXA Life eFuture Invest
The third best ULIP plan is the Bharti AXA Life eFuture Invest plan which can be bought in a single click online, and it’s affordable to believe there are zero allocation charges. The age to enter is a minimum of 18 to 60, and the maturity age is 70. There are two limited premium pay options: single pay or five years, zero allocation charges, and other charges applicable, offering you death benefits as well. There are different premium options Yearly, Half-yearly, Quarterly, and Monthly. You can start from 1,500 per month.
Why Invest in ULIP Plans?
1. For a better future
One of the main reasons people invest in ULIP policy is to have a secure future. In some regions of the world, there are still people who don’t believe in financial investments.
2. To get a better understanding of investing in funds
ULIP plans offer you a good understanding of your investments. If you find volatility in the market, then you can easily change the investments at your convenience, and this makes the ULIP plans versatile and secure. The fund allotments can be easily changed with your decisions and decide where you want your money to be invested.
Features of ULIP Plans
Picking up the best ULIP plans can be tricky. It can be tough to choose the best ULIP plan as there are many elements you need to consider. Selecting the best ULIP plan without any research and superficial knowledge can be challenging, so let’s get to the critical features of this ULIP policy.
1. Overall Control for Your Investment
The first and essential element of the ULIP policy is sticking with financial security. The control of your investments is in your hand, which means along with the life range, you get an understanding of investing money for the future. The best ULIP plan offers you investments and insurance under one premium without any hassle.
2. Easy to Understand and Transparent
The second key feature of the best ULIP plan is its transparency, where you get every update about your money and its growth. Also, the policies are easy to understand and you don’t need any external research. You’ll appreciate everything well by choosing the best ULIP plan.
3. Easy Switch with Your Choices
The ULIP policy is flexible for every requirement as you can easily switch investments from equity to bonds. By choosing the best ULIP plan, freedom is assured, and you don’t need to stick to one investment with your money.
The markets you choose can be volatile, so doing good research can make the best investment to keep your ULIP policy accountable. But here’s a catch: you can make little changes by using the terms in a financial year. Your insurance provider will give you an idea and suggest the best ULIP plan.
4. Top-up and Partial Withdrawal
Another feature of ULIP plans is the top-up of the investment, as you can add money to your investment for good growth. You can add cash under the options provided by the specific ULIP plans; it can be multiple times or a one-time investment concerning your existing plan.
The ULIP plans are set up for a lock period of 5 years, and after the completion of the lock period, you can partially withdraw the money. Also, when you choose the best ULIP plan, there are no additional charges after the lock-in period.
These are essential features when choosing the best ULIP plans for your future. The ULIP policy is promising and transparent enough to make investments for a secure lot.
Types of ULIP Plans
1. For a specific purpose
The first category is a specific purpose where people buy the best ULIP plan for retirement. The second can be wealth creation, where people in their early 20s want to achieve a financial goal, so they start investing in the Best ULIP plans for a specific financial objective. The third one is for children’s education. Many people want their children to have a better future and contribute to that, and they consider different ULIP plans for further studies.
2. To secure death benefits
Some people only choose the best ULIP plan for the sake of a promising future with no specific purpose attached, as they have to make sure that their family is safe and secure and that they don’t face any challenges financially. Choosing the best ULIP plan can give you a death benefit, and the nominee will receive a higher value for the investments.
3. For good investment
Another reason people invest in ULIP plans is because of the good returns. As we’ve told you, you can switch through the investments you make and quickly get good returns concerning the volatility an asset holds.
The first investment with ULIP plans for the third category is equity funds, where the risk is moderate, but the returns are pretty high. Investing in a company’s domain offers an excellent return to the person who owns ULIP plans.
The best ULIP plans, Fixed interest, and bonds are suitable for giving recurring returns and have low risk. The money you invest is invested in corporate bonds and other mediums.
How to Choose the Best ULIP Plan?
There are few ULIP plans offered in the market as the ULIP plans are pretty niche, so we’ll help you to know the best ULIP plans. They are provided in the market. It’s hard to understand which will be the perfect choice for the best ULIP plan.
As you’re going to invest your hard-earned money, you need to do proper research about it. Consider doing deep research about everything related to the ULIP plans and how the program works, its past performance, effectiveness, and potential.
Consider everything about ULIP plans. What should be the cost, its structure, and how it will benefit you, along with understanding the history of the providing company and what are the profits they’ve given to their customers? Let’s know some essential things you need to know before choosing the best ULIP plan.
1. What are Your Necessities?
In ULIP plans, the first thing you need to understand is what you need from the plan. As an investor, what you expect is the most vital thing you need to consider. What are your financial goals and the objectives you want to fulfill is the first thing you need to consider while choosing the ULIP policy.
Risk tolerance for the best ULIP plan is the crucial point because are you good with an equity investment that can give you exceptional results, or debt options that have low risk and provide protection to your money? Choose according to your financial goals and the amount of risk you can take for your ULIP policy.
2. Aim for Life Cover
One of the main reasons people choose a plan is to take care of their family in their absence, and you need to ensure they’re not struggling financially in your absence. The ULIP policy offers an astonishing amount to your family if something happens to you, so make sure you’re keeping this in mind and aiming for the good returns your family will get in your absence. Look for the highest life cover offered to meet your family’s objectives. Consider increasing your life cover.
3. Always Invest in Long Term
Don’t invest for a short period. To understand and witness the magic of compounding, you should be supported for a long time. The best ULIP plan has a lock-up period of 5 years, and after that, you can withdraw your money, but we suggest you stick for the long term and make it an excellent long-term investment to get higher returns. You also get different benefits and bonuses if you continue with long-term insurance, which will eventually result in wealth creation in your ULIP plans.
4. Tax Benefits and Charges
It would help if you also considered understanding the benefits of the ULIP plans. Under the Income Tax Act 1961, you can easily save and have a good amount of money in your hand. The tax benefits are offered for ULIP plans, which makes it the most preferred investment you can ever make. Even if you switch from debt to equity funds, you’ll not get taxed.
There aren’t any hidden charges, but your insurer will explain some allocation charges that come with your ULIP policy. When you evaluate the best ULIP plan, there are 4 to 7 types of orders which are :
- Fund Management charges
- Premium Allocation charge
- mortality charge
- Switch charges
- Discontinued charges
- Premium redirected charges
Understand the insurer’s charges to make a good investment.
5. ULIP Calculator and Compare Plans
For a ULIP policy, you can consider having a ULIP calculator, which will allow you to know the estimated value you’ll get by assuming a good return assured by your provider. To understand the best ULIP plan, you can use a calculator for better decisions.
Best ULIP Plans – FAQ
Which is the best investment: Mutual funds or best ULIP plans?
Ans: Both give you market-linked returns and are best in their place, but ULIP plans offer good returns and insurance, so it’s beneficial for you, you also save on tax and get maturity benefits with ULIP plans.
Can I cancel my ULIP plans in between?
Ans: The lock period of the ULIP policy is five years, and some companies may give you a cancellation, but you’ll have to pay some charges. The best ULIP plans don’t have any option to cancel at least for a five-year lock period. The best ULIP plans have terms and conditions to cancel the lock-in period.
Is it risky to invest in ULIP plans?
Ans: Compared to other investments you make, ULIP plans are relatively straightforward, assuring you good returns. Also, the fund value is invested by the policyholder, and you can switch your investment by looking at the volatility of your assets. Even if you consider the best ULIP plans, they have a few risk factors that benefit your wealth.
Can the ULIP plan help with wealth creation?
Ans: The best ULIP plans help boost your wealth, and the earlier you invest in them, the more wealth you can make.
How to choose the best ULIP plans?
Ans: Choosing the Best ULIP Plans isn’t an easy task. You can easily find companies that offer the best ULIP plans with good benefits in the market.
What is NAV?
Ans: In ULIP plans, the NAV stands for net asset value, the units you hold. The NAV is calculated by adding the holdings in your plan, and it’s the assets you have.
How do you understand the best ULIP plan?
Ans: A best ULIP plan can be understood by its past performance. The best ULIP plan has a good customer base and reputation with a good return.
Conclusion
You can consider this article to choose the best ULIP plans for yourself. There are different benefits you get by investing in ULIP plans. In this post, we’ve discussed everything about ULIP plans and how you can invest in them. We hope this post was helpful and you received valuable information from it.
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