When buying Ulip make good judgment

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ULIP Plan Comparison
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When buying Ulip make good judgment

• There has been a long discuss on unit-linked
  insurance plans (Ulips) recently, but consumers
  find that many questions continue to remain
  unanswered.
• Meanwhile, the sale of traditional products has
  increased extensively despite the fact that Ulips
  are far more transparent today.
• So how do you know if an Ulip works for you, and
  if it does, which type is right to your needs?
  There are two broad categories of Ulips, which
  are defined by the death benefits they offer. The
  Type 1 Ulip provides benefits that are higher of
  the cover or the accumulated fund value.
•  

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The Type 2 Ulip offers death benefits that
include both the cover and the accumulated fund
value. It is important that you assessment
these two products as both the death benefits and
mortality charges are higher for the second
category. Here are some factors that you should
consider before buying an Ulip Plan
Comparison. Tax advantages should not be the
only reason for investing in Ulips, nor should
the investment amount be decided on the basis of
deduction available under Section 80C. Its
important to consider whether the cover and
projected maturity value are sufficient to meet
your specific need.
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Compare returns Instead of buying an Ulip, is it
better to take a term insurance and put the
balance in other investments? Ulips offer a
mixture of benefits with a charge structure that
optimises a bundled offer. After the capping of
charges, the new Ulips are competitive compared
with any combination of products, such as term
insurance and a savings product. Additionally,
tax incentives at the time of investment and on
maturity are an important thought. Let us
compare an investment in a Ulip with that in a
combination of products, say, a mutual fund or
PPF along with term insurance (see table). To
simplify the comparison, Ulip and mutual fund
returns are assumed at 10() per cent (minus the
charges) and PPF at 8.5() per cent. It is
important to note that in an Ulip,
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Assess your risk appetite Most Ulips have a
variety of fund options ranging from aggressive
equity, diversified equity and balanced funds to
bond or income funds and short-term funds. Choose
the ones that suit your risk profile and
appetite. You can allocate a desired part of
your investments in the fund(s) of your choice.
Ulips offer the flexibility to switch between
funds depending on your changing
needs. Investing in an Ulip is a long-term
commitment and its essential to compare
products. If it suits your specific financial
goals, go ahead and buy one. Source
https//www.bajajallianz.com/Corp/ulip-plans/ulip.
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