Which is the best ULIP to buy and the tips to consider before buying ULIP

Which is the best ULIP to buy and the tips to consider before buying ULIP

October 11, 2019 8:38 am,

Are you looking for best ULIPs which offer a dual benefit? This article is all about the best ULIP to buy and also the tips or factors to consider before buying any ULIP. ULIP is a combination of Insurance and investment. Premiums can be paid monthly or annually.  In most of the ULIPs certain percentage of amount is considered for insurance and the rest of the money is invested just like mutual funds. ULIPs do come with Tax benefits.

Which is the best ULIP to buy?

  • Go for the ULIP that provides a wide range of options fund options. For example, a ULIP with eight fund options with varied allocations in equities and debt is a better choice than one with 4 options.
  • Invest in ULIPs which comes with fewer charges. ULIPs charges are now closely regulated across all Insurers. Go for the ULIP with the lowest expense. The expenses can be compared easily since the information is made available on the company website. A ULIP with a zero-charge structure that only accounts for fund management and mortality charges are a good option. Go for ULIPs that invest the entire premium, meaning the premium allocation charge is zero.
  • Go for ULIPs that offer more flexibility to choose the policy term. So, a ULIP with a policy term of 5 to 20 years is better than a ULIP with a policy term of 10 to 20 years.
  • Buy ULIPs which offer flexibility in terms of premium payment options. For example, certain ULIPs offer the single or limited premium payment options(like 5 years, 7 years, 10 years etc)
  • Buy ULIPs that offer death benefit that is higher of the sum assured and fund value.

You can check ULIP plan from HDFCLife which includes all the above points discussed regarding ULIP and also one of the top-performing ULIP plans in India.

Let us see the tips or factors to consider before buying ULIP

  • Investment in ULIP is subject to market risks. The policyholder bears the risk. Hence always invest based on your need and the ability to take the risk.
  • Go for the ULIPs with less fund management and allocation charges.
  • You should be able to switch between debt and equity funds easily when it required.
  • Decide your investment goals before buying any ULIP. Buy the one which fulfils your goals
  • Look for ULIPs which offer policy term flexibility and investment flexibility.
  • Study the charges levied on ULIP like initial charges, premium allocation fee, fund management fee, surrender charges, mortality charges, service charges etc.
  • Study the features and benefits of a ULIP plan. Having a proper understanding of a ULIP plan you will be able to find the best plan which suits your financial requirements,
  • Check the previous performance f the ULIP plan that you plan to buy. One can refer to the performance o 3-4 years. So, you will get a brief idea about the returns that one can get from the plan
  • You can buy ULIPs if you are a long term investor. ULIPs tend to do well over the long term. This can be taken as the best retirement plans.
  • Consider ULIPs which offer good long term benefits.
  • Go for the one which offers death benefits, maturity benefits, withdrawal benefits as well as tax benefits.

Hence, ULIPs combine the benefits of insurance and investment. ULIPs are better than insurance or investment alone. They also provide life insurance cover. So, the best long term investment options are ULIPs. Consider the above factors discussed before buying a ULIP and go for the best plan that suits your needs.

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