What Are The Different Types Of Unit Linked Insurance Plans?
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According to their ability to produce wealth, unit-linked insurance plans are likewise divided into several categories. Investing in these programmes is done simply to maximise the return on investment. Some of the many sorts of ULIP programmes that focus on wealth building are described and listed below.
A wide range of benefits are available to investors in ULIP plans. Their versatility allows investors to select funds that meet their unique financial goals. You have the option of investing in high-risk equities funds, medium-risk fixed income funds, or even low-risk liquid funds, all of which are managed by professionals. Your ULIP fund choices can be changed over time as your goals and risk appetite evolve. ULIPs offer a variety of benefits in addition to flexibility, including the ability to instil the habit of disciplined saving, insurance coverage, and tax benefits.
Different Types Of Unit Linked Insurance Plans
Investors can choose from the following types of ULIPs -
1. Guarantee – Non-Guarantee Plans
Some ULIPs for wealth development give assured rewards as well. Long-term, these ULIPs provide the possibility for higher profits without taking on any market risk. As a result, these programmes are perfect if your objective is to accumulate wealth.
For their part, non-guarantee plans offer a wide choice of investment alternatives. Here, you may put your money in a variety of different funds of your choice. You may increase your exposure to equity funds and, as a result, increase your long-term growth potential. If your objective is to build money, these programmes are excellent.
2. Plans Based On Life Stages And Non-Life Stages
A life stage-based approach Life stage-specific investment plans (ULIPs) are based on the idea that your priorities change throughout time. Divide your money across equities and debt funds, thus. According to your age, a larger amount of equity and a smaller proportion of debt are allocated initially. In order to ensure that you maintain your wealth as you age, the plan progressively converts your equity into debt. It guarantees that your asset allocation is always in sync with your age and financial needs.
3. Plans For Regular Pay - One Pay
A one-time payment plan or a recurring payment plan is available, depending on your demands and premium-paying ability The premium for a one-pay plan is paid only once during the policy's duration. Whereas with the regular-pay plan, you may pay your premiums at a convenient frequency throughout the policy period (yearly, half-yearly or monthly).
Final Thoughts
ULIPs are one of the most popular financial instruments because of their vast range of advantages and flexibility. Investment may be tailored to meet your unique financial needs and objectives for years to come, regardless of which option you select.
Must Read: How Does the Unit-Linked Plan Work?
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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.
