A well-balanced portfolio has a nice mix of insurance and investments, among other things. A Unit Linked Insurance Plan (ULIP) can be the perfect fit for your portfolio for that reason and more. But if you are still feeling sceptical about whether to add it in your portfolio or not, here’s giving you some direction on the matter.
What exactly is ULIP?
A ULIP has two parts – insurance and investment. So, a portion of the money that you put in a ULIP fund goes into the insurance premium that secures life cover with death benefits. The other part of the money gets into debt or equity funds in order to derive financial benefits.
There is also a customizable aspect to the fund, i.e., you can either increase or decrease the money you put in your investments or insurance premiums. It all depends on what your long-term financial goals are.
Who should go for a ULIP?
Now that you know what is ULIP, it is time to figure out whether it is the right fit for your portfolio. You might have heard that ULIP is right for people starting their family. Or, you might be under the impression that ULIP is not a good idea when you’re just beginning your career. So, let’s clear the air and give you an exact idea about whether a ULIP is good for you:
When you start a family
If you are starting a family, then a ULIP can be a great choice for you. It will help you realize your long-term plans, such as paying for your child’s higher education. Maybe you can use the money to buy a bigger house somewhere down the line.
When you are single
Even if you are yet to start a family, you might have educational loans to pay off. Your parents might have taken some loans that you need to help in repaying. You do not want the loans to become financial burdens on yourself or your parents. So, get a ULIP to pay off all those loans and move ahead worry-free.
When you just start your career
When you are just starting your career, you have a longer period of investment to accumulate a handsome corpus. On the other hand, starting early also means you have a better risk appetite. So, you can invest in riskier funds and get better returns in the process. You can choose to lower the risk factor further down the line.
When you are planning for your retirement
You would like to have a steady income flow even after retirement. After all, you would not want to lower your living standards because you are suddenly out of a regular source of income. So, get a ULIP that lets you get payments periodically even after retiring.
That’s all! You can now choose a ULIP that suits your financial goals. It is a sound decision to get the plan at practically any stage of your life. So, wait no more!