Get To Know The Correct Time To Invest In Ulip

By Author: raj sharma
Total Articles: 9
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Insurance is a must in today’s unpredictable world. Insurance today is providing a protective shield against unforeseen conditions that we encounter in everyday life. Especially, life insurance has been emphasized to a very great extent. Other types of insurances are also being demanded by consumers. These include health insurance, motor insurance, children’s plans, retirement or pension plans, travel insurance, etc. The demand for these types of insurances has been increasing in India.

Not only have the various kinds of insurance products provide protection and safety to policy holders, they have also transformed into instruments of investment. Nowadays, an insurance policy can act both like traditional insurance policy and at the same time can also act like an investment plan providing mutual benefits. This has been one of the major advantages of today’s insurance products.
One such kind of insurance product is ULIP or Unit Linked Insurance Plan. These Unit linked plans are of recent origin, but they have gained significant popularity in recent times as one of emerging insurance products. Unit linked policies ...
... combine the factors of risk coverage and investment in stock markets. They possess characteristics of both insurance policies and mutual funds.

In fact Unit linked investment plans are very similar in nature to mutual funds in respect of units. The contribution of policy holder is invested in units of similar to mutual funds in stock markets in desired investments which bring about returns.

One of the major concerns for people who are not ready to enter into stock markets are confused about investing in ULIP investment plans. Stock markets, today are highly unpredictable with each passing day either bringing in losses or slight margins. In such risk filled situations an average person whose risk appetite is low would definitely want to stay away from investing in stock markets.

But thankfully, these days the unpredictable situation in stock markets are slowly going down with stability returning and the stock markets moving up on point scale. This is a favorable time to invest in stock markets with ULIP in India. ULIP investment plans are ideal for people with low risk appetites such as salaried employees. ULIP in India are not for short term gain, but they are long term investment plans. Average life of ULIP in India is around 15 years to 20 years which is much longer than regular mutual funds. The longer life of ULIPs gives the advantage of additional return compared to mutual funds.

Under such cases, ULIP investment plans should not be invested for short term gains. From income tax point of view, ULIP plans do not attract tax under section 80C. But, long term tax can be up to 10%.
These days, insurance companies are coming up with new insurance plans which are unit linked plans in various categories apart from life insurance such as health insurance, children’s plans, retirement plans, etc.

But, due to volatile market conditions in stock market, unit linked investors have a responsibility of checking value of units on regular basis. The performance of units must be known from fund manager from time to time to avoid huge losses.

About The Author

Raj Sharma is the author of this article. In this article he has discussed about the Benefits of Investment Plans . To know more about Ulip and comparison of. more information Visit the site