Flexibility Options: The ULIP plan provides the maximum amount of flexibility to their policyholders in choosing the premium payment term, policy tenure, funds of their choice, change of life cover, and various optional riders. Apart from this, the policyholder also has the option to increase the investment amount through top-up options according to their risk appetite.
Transparent Fees Structure: Before putting the hard-earned money into any financial instrument, we expect the highest degree of transparency with no hidden charges. The ULIP plans have an organized fee structure, which is very much disclosed in their policy wording document. Similarly, the company also provides the account statement on an annual and quarterly basis to their policyholders, with the daily net asset value (NAV) reporting and the fund’s performance, which helps the policyholder to keep a track on their investments.
Tax Benefit: ULIPs are a great financial tax-saving instrument, which tends to provide certain benefits at every stage of the policy. The policyholder receives tax benefits on premium payments under the Section 80C and 80D. The returns are tax-free and as well as the maturity benefits are tax-free under the Section 10 and 10D of Income Tax Act, 1961. However, if one has paid an insurance premium of more than INR 2.5 lakh for previous years of policy term, then they will have to bear capital gain tax on the amount of withdrawal.
High Degree of Liquidity: This is one of the best features of any ULIP plan, that one can withdraw their investment partially after the completion of five years of lock-in-period. The partial withdrawals feature allows the policyholder to withdraw a certain percentage of invested amount from their policy as and when they need.
Dual Benefit of Insurance and Investment: This is indeed the USP with which the ULIPs have been designed to offer the dual benefit of insurance and investment in one single plan. With ULIPs, the policyholder gets an exposure of equity and money market-linked growth without actually participating directly in the stock market. And, this comes along with the added benefit of life-cover, that provides death and maturity benefits and thus takes care of your insurance needs.
