ULIP Investment Plan to Manage Your Wealth

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ULIP Investment Plan to Manage Your Wealth
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What is ULIP?

• The term ULIP stands for unit linked insurance
  policy. ULIP is both insurance and an investment.
  The premium that the policyholder pays is divided
  into two parts, one goes to the life insurance
  and the other goes to mutual funds as investment.
  A ULIP holder has the option of either investing
  in equity or in debt. An aggressive policy holder
  will choose to invest his money in equity while a
  conservative policy holder might chose to invest
  his money in debt. The money is invested during
  the term of the policy which may range between 5
  to 15 years.

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In recent times ULIPs have been the investment
opportunity. Here are five things you should know
about ULIPs before you invest in them.

• ULIPs were the most sought after form of
  investment, but lost their appeal when banks
  started levying heavy charges going up to 80 of
  the premium for these policies. The Insurance
  Regulatory and Development Authority (IRDA) in
  2010 put an end to it and capped the annual
  charges for ULIPs at 2.25 for the first 10 years
  of holding.

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• 2. ULIPs give you a wide range of investment
  opportunity. They come in three broad categories,
  aggressive, balanced and conservative with
  respect to the equity and debt investment ratio.
  You can choose the variant that suits your needs
  the best.
• 3. ULIPs allow high level of flexibility. An
  investor can switch from one investment variant
  to the other according to the market
  opportunities. Banks allow a set number of
  switches for their investors. This is a very
  important feature of this type of policies, since
  no other investment policies allow investors to
  make such switches.

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• 4. ULIPs are very similar to Systematic
  Investment Plans (SIP). In SIP an investor
  invests regularly on a monthly or quarterly basis
  without worrying about the stock market being up
  or down. In ULIPs the investor invests his money
  on a quarterly or half-yearly basis. An added
  benefit of ULIPs is that an investor can also
  invest one-time amount in the ULIP either to earn
  from opportunities in the stock markets or if
  they have an investible surplus in a particular
  year that they wish to put aside for the future.
• 5. In recent times insurance providers are
  offering even more perks with ULIP plans. They
  give discounts and are selling these policies at
  the lowest rates, making this the best time to
  invest in ULIPs.