Guide to Get Better Returns With ULIP Investment Plans

One needs to invest both money and time to monitor your investments in the market. The time involved is spent on the research of market trends, stock performance and related factors on a regular basis. Being an active market investor you can deal with it easily, but if you wish to generate better investment returns without putting your money at risk for market volatility, then investment in ULIP can turn up to be the best choice for you. The ULIP investment instrument is considered the most economical avenue to step into the equity market and generate remarkable returns in long run. 

Tips to Get Better Returns With ULIP Investment Plans

Here are some tips following which can help you get better returns from your ULIP insurance plan:

1. Optimize Asset Allocation

The allocation of assets can be defined as diversifying your investments across various classes of assets. Therefore, optimising your asset allocations can shield you from heavy losses which you could have to face by investing in a single segment of an asset. ULIP investment plan allows you to switch between several asset classes such as cash, debt, and equity-based on the financial goals and risk appetite of a policyholder.

2. Select Between Debt and Equity Funds

Every investment asset holds different aspects of risk and returns. When it comes to equity schemes, they are known for high-risk high-return value, while debt funds are famous for providing low returns with lower risk over a period of time. Hence, debt investments help your policy become less risky and more profitable and the balance of these two is termed as Balanced Funds. ULIP plans generally have only 40% of exposure to the equity that makes it a safer investment avenue.

3. Life Stage Requirements

Your financial goals play a significant role in setting your risk appetite. The goals could be long-term as well as a short term from child’s education to children’s marriage. As a general principle to such condition, the market equities are practised early to mid-term only of a ULIP, therefore, it is good to save the amount you have built over time by switching to debt funds for the time your child pursues higher studies. In this way, you can utilise the build corpus for paying admission fees and related expenses.

4. Keep Up With Premiums Constantly

ULIPs include some charges that get deducted at the time of policy activation like fund management charge, mortality charge, surrender charge, and so on. Some charges are paid back to policyholders as loyalty addition. The lock-in period requires a consistent saving discipline that can be taken forward to other tools of investment build compounding returns. These features of ULIP plans helps in the enhancement of investment returns.

5. Stay updated with the Market

The nominee of a ULIP policy gets the amount of sum-assured amount or the fund value, whichever is calculated higher while computing the claim after the policyholder’s death. Also, the fund value is given in a situation where the insured person survives through the maturity period of the policy. Staying up to date with the values prevailing in the market can help your loved ones get higher fund value in the event of your demise.

Conclusion

ULIP plans are great investment tools that multiply your returns over a period of time. This article is to help you explore some options of this investment instrument to grow your funds. We hope this will help you to make the right investment choices and get better returns with ULIPs.

Also Read: 

Reasons Why ULIPs Are Secured Long Run Investment

Difference Between Money Back Plans and ULIPs

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.