Is ULIP linked to Stock market?

Is ULIP linked to Stock market?

October 25, 2019 8:01 am,

ULIP is a unit linked plan usually for long term investment options. ULIP is linked to stock market. So, being long term products, they help you to make good amount of money and achieve your goals. Though ULIPs are market linked we can always expect huge returns considering its long-term investment horizon.

ULIPs are the best investment tool to create wealth. They also provide life insurance benefits.

Let us see how stock market plays a major role when it comes to ULIPs

Predicting markets Ups and downs is a difficult task even for researcher’s and regular investors. Even the best analysis may go wrong with stock market some times. So, before buying you must understand few things about stock market and NAVs. There fore it is better to invest in ULIPs which provide market linked benefits along with life insurance and tax benefits.

This approach work well in the long run as it averages the market volatility over the long term. Unit linked insurance plan investors can make changes to their fund preferences throughout the duration of their investment. The funds offer transferring flexibility. Numerous investment options are also available including stock funds, bond funds, and diversified funds. So, the chances of incurring loss due to market volatility is negligible.

ULIP investment offerings are primarily concentrated in India where they were first launched. HDFC Life is a leading provider of ULIP investments. The firm’s plans offer varying provisions, terms and investment options.

ULIP vs Stock market

  1. Stock market ups and downs will surely affect the ULIPs. Since ULIP is always market linked it is always advisable to switch the funds depending on market performance. You can invest in debts and when the market is doing will you can switch to equities and vice versa.
  2. ULIPs provide returns which is purely based on market performance. So, if you are long term investor then ULIPs will definitely fetch you good returns
  3. You can tide over market volatility using ULIPs. The fear of market volatility often keeps investors away from market investment.
  4. ULIP is designed to inculcate the habit of disciplined long-term investment. So, Markets play a huge role in ULIPs. Hence, if you stay invested for long term you can expect better returns
  5. Regular investments over an extended period in equities without getting disturbed by the market ups and downs is the best way a retail investor should invest in equity markets.

To conclude, it is always advisable to invest in ULIPs to reap huge profits in the long run. Stay invested in spite of stock market volatility to get the maximum benefits. Switching  the funds based on market performance is a key factor in getting good returns.


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