It is pretty much common sense that you research a product inside-out before you invest your money in it. Hence, you must choose a unit-linked insurance plan (ULIP) for yourself in such a manner that you receive the maximum returns based on your risk-handling capacity:
- Based on personal investment goals: Most policyholders choose ULIPs to meet personal investment goals, such as funding a child’s education, retirement planning, building a corpus of funds, etc. Select the type of ULIP scheme that best suits your various investment goals.
- Compare ULIP offerings: Once you have defined your investment goal and the type of ULIP that’ll help you achieve it, compare the ULIP options available in the market. You must focus on expenses, premium payments and ULIP performance. Ensure you check the mix of shares, bonds and equities that a ULIP invests in to get a broad understanding of the security and the likely returns from such a scheme.
- Policy term flexibility: When you choose an ULIP, ensure you check if the selected policies offer some flexibility in terms of benefits. Based on your preferable investment duration, look at short-, medium- or long-term ULIPs.
- Investment flexibility: Look for ULIPs that allow for investments across asset classes- from bonds to stocks to equities. This will result in higher returns and permit high-risk investments when the market is up, even if your initial investment was relatively low-risk.