Top 5 ULIP Plans In India 2024

As you journey towards financial stability and prosperity, Unit Linked Insurance Plans (ULIPs) offer a unique blend of investment and insurance. In this article, we'll explore the top ULIP plans that not only provide a secure financial net but also pave the way for a prosperous tomorrow. Let's delve into the world of ULIPs and make informed decisions for a brighter future.

What is a ULIP?

ULIPs represent a financial tool that combines the advantages of insurance and investment, serving as a dual-purpose offering from insurance providers. These plans cater to individuals seeking insurance coverage while also aiming to enhance their wealth.

ULIPs extend insurance protection to clients alongside the flexibility to leverage diverse investment vehicles such as stocks, bonds, and mutual funds. This twofold advantage of security intertwined with the autonomy to select preferred investment routes establishes ULIPs as a highly favoured financial instrument among a broad spectrum of customers.

Features of ULIP

ULIPs present remarkable attributes and advantages to individuals, rendering them exceptional investment instruments, particularly in the modern, fast-paced landscape where returns hold equal significance as security. Here, we spotlight the distinctive characteristics of unit-linked insurance plans that elevate them amidst an array of investment choices.

1. Versatility

ULIP schemes exemplify an extensive form of versatility that extends across multiple facets of the policy. The ensuing varieties of flexibility accompany ULIP schemes:

• Selectable life cover: Customers can opt for a life cover within ULIPs that aligns with their financial capacity.
• Adjustable premium amount: Most ULIPs grant customers the option to modify their premium amount after a designated time span. This adjustment can involve increments or reductions based on the individual's prevailing financial situation. Additionally, numerous ULIP schemes offer a top-up facility, enabling customers to inject higher supplementary amounts for increased gains at their discretion.
• Add-on riders: Riders, supplementary benefits attainable through a slightly augmented premium, encompass critical illness and major illness riders, among others. ULIPs provide the flexibility for customers to integrate extra optional riders, affording amplified advantages and heightened protection.
• Selectable fund options: ULIPs function as insurance policies wherein a portion of the funds is channelled into investments such as mutual funds, stocks, and bonds. Most insurance providers furnish customers with the liberty to designate the type of fund for their investment. This spectrum of funds spans from assertive to cautious variants, accommodating diverse customer needs.

2. Transparency

Transparency constitutes a pivotal aspect of ULIPs. Unlike alternative investment instruments, ULIPs empower customers with elevated control over their policies. Evident benefits and features, elucidative brochures, and a grace period for review ensure that customers approach their investment in ULIP schemes with utmost certainty.

3. Liquidity

The liquidity aspect of ULIP schemes varies depending on the insurance provider under which they are acquired. Most insurance companies impose a lock-in period spanning three to five years, after which customers gain the freedom to execute full or partial withdrawals.

4. Numerous Gains from a Singular Scheme

The most outstanding attribute of ULIPs lies in their ability to deliver insurance advantages and a channel for individuals to nurture their capital through investments in stocks and funds. This investment tool is particularly fitting for individuals with a lower risk tolerance yet aspiring to foster their finances.

5. Tax Advantages

ULIPs extend more than just security and profits; they also offer tax exemptions according to section 80C of the Income Tax Act for life insurance and health insurance plans, as well as under section 80D for life insurance and critical illness riders. Moreover, ULIPs serve as an excellent mechanism for disciplined savings and the concurrent growth of the accumulated sum.

6. Risk Reduction

ULIPs engage funds in diverse investments while ensuring protection, making them investment tools with minimal risk. These policies are particularly advantageous for individuals seeking to leverage market growth without direct engagement in the stock market.

Factors to Consider Before Investing in ULIP Policies

Here are some essential considerations to ponder before investing in the finest ULIP plan available in India:

1. Fund Performance

The primary factor of utmost importance in selecting the best ULIP plans involves assessing the performance of the funds. It's imperative to prioritise businesses that consistently deliver substantial benefits and returns based on thorough research. However, it's important to note that a fund's past performance does not necessarily predict its future outcomes.

2. Policy Charges

The charges associated with the policy should be kept as reasonable as possible, and the company should be transparent about all other associated fees.

3. Diversification of Funds

A strategic alignment of funds across Equity, Debt, and other Hybrid Funds is crucial for maximising potential returns.

4. Upper Premium Limit

This crucial aspect empowers policyholders to opt for ULIP Plans that align with their preferences most effectively.

5. Availability of Riders

In addition to life insurance and wealth accumulation, many ULIP Plans offer optional riders to extend coverage, such as premium waivers or accidental disability coverage.

6. Added Benefits

Factors like wealth enhancement features and assured benefits contribute substantially to the fund's value. It would be advantageous to be vigilant for such elements.

Best ULIP Plans of India: An Overview

Here is an overview of some of the top ULIP plans available in India:

1. LIC Endowment Plus

LIC's New Endowment Plus Plan is a Unit-Linked Participating Policy and a non-participating endowment guarantee plan. It offers a balanced blend of safety and savings, combining investment and insurance throughout the policy term.

LIC's New Endowment Plus policy provides four diverse investment options, granting policyholders flexibility in allocating their funds. The fund category selection can be made after premium payment and deduction of premium allocation fees.

2. HDFC Life ProGrowth Plus

HDFC Life ProGrowth Plus is a unit-linked insurance policy with regular premiums. This plan allows you to choose the investment fund and premium amount. Your regular premium, minus premium allocation charges, is invested in the fund(s) of your choice.

Upon the policy's maturity, you will receive the accumulated value of the chosen fund. The premium for HDFC Life ProGrowth Plus is invested in the stock market, delivering attractive returns along with insurance coverage.

 

3. HDFC Life Click 2 Wealth

In today's fast-paced world, investing in reliable plans with consistent returns and building financial security is crucial. HDFC Life Click 2 Wealth policy is a Unit-Linked Non-Participating life assurance plan that offers financial stability for the policyholder and their family.

The Life Insurance Plan presents three plan options: Invest Plus, a traditional wealth-building choice; Premium Waiver, wherein the insurer covers future premiums if the Premium Payor, not the Life Assured, passes away; and Golden Years Benefit, which extends life insurance coverage up to age 99.

4. SBI Life Smart Wealth Assure

SBI Life Smart Wealth Assure is a Non-Participating Unit-Linked Plan that aims to enhance savings through capital market participation, forming a substantial corpus for future needs.

Policyholders need only pay the premium once to enjoy the benefits throughout the policy's term. The plan allows a combination of two funds—the Equity Fund and the Bond Fund—for potentially optimal ULIP returns.

5. ICICI Pru Signature

ICICI Pru Life Signature is a Unit-Linked Insurance Plan designed for savings and asset protection. Apart from providing life insurance to beneficiaries, it offers flexible investment options to support the policyholder's goals.

With ICICI Pru Life Signature Insurance, you can choose from 4 portfolio strategies and a variety of funds spanning equity, debt, and balanced options, catering to your investment preferences. The Systematic Withdrawal Plan within the policy facilitates regular cash withdrawals for various life objectives.

6. Bajaj Allianz Future Gain

Bajaj Allianz Future Gain is a Unit-Linked Insurance Plan designed to optimise wealth growth through market investments and life insurance coverage. Policyholders can build future wealth through the premiums invested in debt and equity markets.

The plan offers features such as flexible premium payment choices, diverse fund options, varying risk levels, and more, allowing you to enhance wealth while benefiting from life insurance protection.

7. Aditya Birla Sun Life Fortune Elite Plan

The BSLI Fortune Elite Plan is a unit-linked insurance plan that invests premiums in unit accounts to capitalise on market growth and achieve substantial returns.

Additionally, the plan provides life insurance coverage to meet protection needs. The policyholder bears the investment risk associated with the investment portfolio.

8. Max Life Platinum Wealth Plan

The Max Life Platinum Wealth Plan is a non-participating ULIP tailored for High-Net-Worth Individuals. It enhances financial planning for a secure future, offering flexibility, portfolio strategies, diverse fund options, life coverage, and loyalty benefits.

The plan accommodates various premium payment methods and includes a rider option to extend coverage.

9. Bajaj Allianz Fortune Gain

Bajaj Allianz Fortune Gain is a Unit-Linked Insurance single premium endowment plan. It allocates up to 99.5% of the premium to maximise investment utilisation and minimise charges.

The plan emphasises wealth creation through market-linked returns and life insurance protection. Loyalty Additions, constituting 3% of the single premium, enhance the policy's value for premiums exceeding Rs. 1 lakh and policy terms of 10 years or more.

10. ICICI Wealth Builder

ICICI Prudential Wealth Builder II Plan is a non-participating ULIP that combines market-linked investments with life insurance protection. It offers a one-time investment option, aiming to grow wealth and secure family financial futures.

The plan allows premium payment for the full policy term or for 5 or 10 years under the limited pay option.

Conclusion

Prior to putting your money into any financial product, such as ULIPs, it's essential to have a comprehensive grasp of how it operates. If you're seeking information about ULIP plans, this blog will unquestionably offer valuable insights.

You have the opportunity to utilise various benefits, such as withdrawing a portion of funds, modifying premium payment frequencies, selecting rider options, and more. Some plans even encompass additional elements like the reimbursement of mortality charges, tools to enhance returns, loyalty bonuses, fund growth supplements, and similar attributes.

FAQs

Q. Will my investment in ULIP yield assured profits?
A. Whether direct or indirect, investments in the stock market do not guarantee returns. The outcome is contingent on the fund's performance where the customer's money is invested.

Q. Can I reclaim my premiums if I'm dissatisfied with my ULIP policy?
A. Refunds for premiums are only viable within 15 days of receiving the policy document. However, insurance companies may deduct certain fees and charges before reimbursing the amount.

Q. What's the longest duration for which I can reconsider my ULIP investment?
A. The majority of insurance providers offer a grace period of 30 days, allowing customers to rethink their decision.

Q. What proportion of my premium is utilised for purchasing units?
A. A part of your premium is directed towards unit investment. The percentage varies based on the ULIP type and the specific insurance company.

Q. Am I permitted to alter my chosen investment fund post-enrollment in a ULIP?
A. Certainly, customers have the liberty to switch between funds as desired, albeit with an associated switching charge imposed by insurance companies.

Q. Can I invest an amount exceeding the regular premium?
A. Yes, a top-up facility is accessible, subject to the features of the chosen ULIP scheme.

Q. Do insurance companies provide comprehensive insights into my ULIP plan?
A. Insurance providers are expected to furnish customers with annual reports, market assessments, fund-related analyses, and risk management measures.

Q. Am I allowed to make partial withdrawals from my ULIP?
A. Pension and annuity plans generally do not allow partial withdrawals. However, for other plans, partial withdrawals are typically feasible from the fifth year onward.

Q. What portion of the premium is apportioned for unit purchase?
A. The entire premium sum is allocated for purchasing units. The quantity of units acquired hinges on the specific ULIP and the corresponding year.

Also read: 

5 ULIP Charges You Must Know About

Are ULIPs A Good Investment Option For Long Term Wealth Creation

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.