InvestorQ : what are benefits of ULIP plans ?
prerna made post

what are benefits of ULIP plans ?

Deepa Salunkhe answered.
3 years ago

ULIP or Unit Linked Insurance Plan is a combination of Insurance and Investment. In simple words, the amount paid by the customer in ULIP schemes are diverted in two-channel; one in Insurance and other in equity/debt funds. ULIP generally comes with a lock-in period of 5 years. So only to be invested when your time horizon is 5 years and more. Not suitable for an investor with short-term goal.

Investment in ULIP is considered for tax benefit under Income Tax law, Section 80C as it invest in Equity and Debt market. So understand the ULIP product and take your decision accordingly. ULIP provide growth perspective with investment in stock market, along with insurance cover to the policyholder.

Best part of ULIP is that you can customize it with respect to flexibility to move money between equity and debt funds. Additionally, policyholder can partially withdraw money at times of need. However, the lock-in period is 5 years and so withdrawal can happen after 5 years or as policy terms.