is it good to buy ULIP policy in a recession ?

is it good to buy ULIP policy in a recession ?

October 25, 2019 6:50 am,

ULIPs are generally meant for long term investment options. So, considering the advantages of long term investment, it is always good to invest in ULIPs when the market is down or when there is some kind of recession.

ULIPs give you the benefit of market-linked returns along with insurance coverage and are good investment options for long term investors. Moreover, the recent market low or recession makes it an ideal time to invest in ULIPs as the NAVs are down. You would, therefore, be able to buy more units with your investments which would, with future growth, give you good returns.

If you are wondering whether it is good to buy ULIP policy in a recession or when the markets are down, then this article will surely help you out in this regard.

Let us see the advantages of buying ULIP policy in a recession

  1. The stock markets have a habit of raising up even after the worst falls. Considering recent years even after a major crash in 2011, the returns have picked up in the later years. So, if you invest in ULIPs during downtrend there is always a chance of market picking up and give you positive returns in the long run
  2. When the markets are down you should invest in ULIPs to get the benefit of higher unit allocations. Choose debt funds and then switch to equity once the market picks up. Choose your preferred ULIP and invest.
  3. ULIPs allow Tax-free switching where you can move from debt to equity and vice versa without worrying about tax implications. So, when the market stabilizes you can switch to equity.
  4. ULIPs come with inbuilt insurance cover. So, you can invest in ULIP to build corpus as well as to insure life.
  5. Whenever you stay patient and invest in ULIP for the long term with careful financial planning, your investments are bound to yield good returns

So, we can always be sure that investing in ULIPs during a recession is always a good option as it provides better returns, once the market is up. ULIPs are generally medium to long term investment horizon, the minimum tenure is 5 years. The stock markets will see a rise even after the worst falls. So, ULIPs are better long term investment options. Also, the policy benefits are completely Tax-free under section 10(10D).


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