If you are looking for a long-term option for generating wealth, ULIP should be the best and the most reliable option for you. ULIPs are best suited for those looking for a long-term wealth creation plan. This offers you the benefits of both, savings and protection. Popularly known as Unit Linked Insurance Plan, ULIP provides both insurance and investment. It provides life cover with good returns and also helps in saving taxes. According to the current market situation, ULIPs are considered to be the best investment options.
Reasons Why ULIPs are a better option for long-term wealth creation
- Flexibility – ULIPs are considered flexible because they help you in switching funds during your policy period. Out of all the financial tools, this is the only tool that gives you this option. It gives the option of moving the investment amount fully or partially from one fund to another to the insured. You have the option to choose any of them as per your needs or as to how your funds are performing. This includes growth, balanced, equity, and income funds.No cost is required even if you make 3-4 switches in a year. The only thing that is required from your end is, that you need to choose the policy, change its find allocation, and maintain it till your policy ends so that you are able to enjoy the long-term benefits.
- Better returns than other financial tools – The other reason why ULIP is a better option is that it provides better returns. When compared to other financial tools, it has been noticed that ULIPs invest the premium that you have paid in several asset classes which helps in getting better returns, apart from this, it also gives you the option you can opt for different funds every year according to their performance.
- Tax benefits -As per Section 80C of the Income Tax Act 1961, ULIPs also allow certain tax benefits. Certain factors are responsible for an ideal tax-saving option, such as lock-in period, maturity benefits, and amount of return. This in turn proves that ULIPs are a better option to invest in as compared to the other tools due to the benefits it offers.
Conclusion
All the above-mentioned points make it very clear why investing in ULIPs is a better option for creating long-term wealth. ULIPs maintain a perfect balance between providing insurance coverage and generating great returns. Therefore, choose wisely while investing in a financial tool.