During your active working years, you might want to build a strong career to fulfill your dreams in the future. However, after you reach your 30s, you might not have financial responsibilities. As you grow up, you might tend to leave behind your dreams that you aimed for at a young age. According to a report, many Indian parents sacrifice their dreams for children. However, you might focus on achieving your life goals after you reach your retirement.
Many of you might invest in different instruments to fulfill your life goals in the future. Although there are various investment options like Equity Linked Savings Scheme (ELSS), Mutual Fund (MF), etc., you should choose a Unit Linked Insurance Plan to accumulate a corpus to meet your dreams. Therefore, let’s go through the three essential steps to help you to build a corpus for your future with a ULIP plan:
Consider the impacts of inflation.
The rising inflation rate can be a major threat to your investments. Whether it is medical inflation, educational inflation, or property inflation, you might fail to combat its effects on your investments. However, you can manage the negative impacts of inflation by investing in high-return financial products. A Unit LinkedIn Plan (ULIP) can provide you with high returns by considering the increasing inflation rate.
Cut down unnecessary expenses.
When you are in your 30s, your career can be at a peak. Hence, your income might also be on the rise when you are doing well professionally. Due to a salary hike, you might tend to spend money on expensive things such as gadgets, automobiles, and so forth. When you splurge your money on unnecessary and irrelevant things, you would be unable to control your expenses in the future.
Start your investment early.
Although your initial salary amount can be low at a young age, you should start by investing a small amount regularly. When you park a small sum of money in a ULIP fund early, you can be able to build a substantial corpus to meet your financial needs in the future. For instance, if you invest Rs. 5,000 every month in a ULIP policy, you can accumulate Rs. 75 lakhs by the time you reach the maturity period.
Years ago, you might have been wondered, ‘why should I invest in a ULIP plan?’ due to its high costs and low returns. However, today the ULIP plan has upped its investment game after the reintroduction in the market. Today, a ULIP plan can offer numerous benefits at an affordable rate. Therefore, let’s go through the following ULIP benefits given below:
Flexibility
Under a ULIP policy, you can have the flexibility to select the premium payment term, types of ULIP funds, and pay-out options.
Funds
You can make a selection between equity funds and debt funds based on your risk appetite, investment goals, and financial requirements.
Premium payment term
You can pay the premium quarterly, monthly, yearly, and half-yearly based on your convenience.
Payout options
A ULIP plan can offer a payout called death benefit to your nominees in your absence to maintain their standard of living, as the nominees can opt to receive the death benefit as a monthly income or a lump-sum amount.
Affordability
A ULIP plan can offer life coverage at an affordable rate. However, purchasing a ULIP policy online can be relatively cheaper. Due to zero commission charges, an online ULIP investment plan can be usually cheaper than an offline ULIP plan.
Tax-efficiency
A ULIP plan can offer tax benefits on the following elements given below:
Premium
According to Section 80C of the Income Tax Act, 1961, you can claim a tax deduction of up to Rs. 1,50,000 lakh on your taxable income.
Maturity payout
Under Section 10(10D), your nominees can receive a tax-free maturity payout.
In a nutshell, A ULIP investment plan can be the right choice not only for the growth of your money but also for your family’s financial security. The amount generated from a ULIP plan can be used for multiple purposes, such as fulfilling your life goals, a comfortable retirement period, your child’s financial needs, and so on. A dual-benefit product like a ULIP plan is a long-term investment; therefore, invest in the right ULIP plan that matches your financial requirements.
