How To Invest In Equity Through ULIPs?
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ULIPs promote a steadily-built investment corpus by branching out the premiums paid by the policyholder. While some of it goes towards the cover for life insurance, some gets invested in the funds of your choice. Equity funds are termed as growth funds as they fetch a hefty payout through association with the market.
The market fluctuations might earn them the reputation of being a wavering tool of investment. In this article, we will guide you through the process of investing in equity funds and how they are capable of wealth generation.
How To Invest In Equity Through ULIP?
Investing in Equity funds through ULIP is a simple process. The following points provide you with an overview of the process -
- To get started, it is important to make clear your motive of investment. Investing in equity, through ULIPs will expose you to market risks to generate wealth for the future. If you have a lack of appetite for risks, it should be noted before investing.
- Since the premiums are bifurcated into two streams, it is within the reach of the policyholder to customize the fund allocation to multiple funds. This allows you to direct the ratio of your funds between the funds of your choice.
The different options at display regarding funds is a great tool to broaden your choices about the investment of premiums.
- After submitting the necessary documents, the process moves forward and with a stipulated premium, a corpus is built overtime which can be used in the future, and will also extend as an insurance cover if needed.
Benefits Of Investing In Equity Through ULIP
Given below are a few of several benefits that draw the attention of investors
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Wealth Generation
The profit earned through equity funds, is in association with the exposure to the market conditions. It is used as a processed tool by investors to not give into the exhaustion caused by inflation.
The wealth generated overtime will set well with the market conditions, fetching great profits.
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Tax Benefits
By investing in equity funds, investors can yield tax benefits to a certain degree, reducing the tax liabilities.
It is popular among investors because the profit yielded from the investment will not be subjected to taxes, making it more profitable.
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Easy to Manage
A portion of premiums that go towards investing in funds, are under the supervision of experts on the conditions of market and companies, making it easier to manage. The association with experts on the subject makes it easier for you to function and allocate your funds, fetching a greater payout.
Take Away
Investment in Equity funds is a path towards wealth creation. The exposure to market conditions might make it turbulent, making it a suitable option for investors with a greater risk appetite. Although that has to be considered while investing in equity funds, mentioned above are the ways it works and why it is worth the money and time of the investors.
Also read
How Does Max Life ULIP Calculator Work?
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.
