ULIP (Unit Linked Insurance Plan) is a life Insurance brand that provides investments to policyholder to invest in numerous certified investments such as mutual funds, stocks and bonds. In short it is an Insurance and Investment product.
The investments and protection section can be managed based on specific choices made by policyholders. However, ULIP may sometimes lead to risk related factors in the capital market.
It is made easier for policyholders, for easy calculations of their premiums with the help of ULIP calculator accommodated on the websites in all shared markets. The ULIP calculator is also available in application for easy mobile use. One can install for options with easy calculations.
Unit Linked Insurance Plans (ULIP) are more often favourable for policyholders who are willing to be invested for a long stretch of time. The ULIP calculator helps policyholders to closely oversee portfolios and keep customers updated without hassle.
Unit Linked Insurance Plan Structure
- Transparency And Charges: 60% of costs are incurred in the beginning of few years along with premium allocation costs, fund management fee, mortality charges, service tax deductions and fund shifting charges. The money that remains is further capitalized in the markets. The transparency is slightly blur since one cannot see through the exact amount of investments done. Relying on ULIP calculator needs to be constant.
- Tax Analysis: Deduction claimed earlier can be reversed in case one surrenders before the lock-in period. The policyholders must then be responsible to pay tax. The policyholder is free of tax charges once he/she dies. The tax rate is deducted by 2% if the premium exceeds more than 10% and prolongs for a year and exceeds 1,00000 INR.
- Lock-In Period: Unit Linked Insurance Plan (ULIP) has a lock-in period of 5 years. The investments remain locked for about 3 years. One may discontinue premium without quitting ULIP. However, it wouldn’t be commendable to quit ULIP once opened.
- Switch Options: ULIP grants a switch option than can change the rate of invested amount in various funds. This switch option helps the policyholders to change funds in case of risk associated situation in different phase of life. At a certain age one may shift the equity to debt or even switch out of equity in case the markets fall. However, the switches are limited. ULIP calculators helps policyholders to keep check and update plans for favourable switch and options.
Assets Of Unit Linked Insurance Plan (ULIP)
ULIP has certain advantages to provide customers good services.
- Flexibility In Choices: ULIP provides a wide range of option for clients to select. ULIP provides options to switch plans based on the needs of the policyholders. It also provides facility to withdraw partly from the invested fund. It allows the policyholder to invest beyond the premiums added as they desire. One can choose between equity, balance, income funds and surge according to the risks or any change of plans. Policyholders need not strive to maintain any track of companies. Just a selection of policy though portable ULIP Calculator and 4 switches per year are granted without any costs.
- Savings And Investments: ULIP offers plans that benefit policyholders of Investments and savings. One may have the opportunity to invest their income to earn more returns albeit taking proper care of protection needs. This helps in fortifying wealth in long term.
- Market-Linked Benefits: ULIP provide benefits to policyholder to earn huge amounts from the market-linked returns. A fraction of the premiums is invested in the market-linked funds that further invests in various other instruments such as debt instruments, equity and foreign exchange instruments.
- Better Returns: ULIP has an upper hand amongst other peers when it comes to “better returns” due to its advantage in equity. This insurance invests premiums through tax saving funds. Tax saving funds has always proven to double up the returns since time immemorial. But in case of one-time investment for ULIP, one has to look for new funds every different year.The maturity depends solely on the enforcement of the equity market. Gratuity plans are also deliberated to pay in huge sum of money after certain point of time. The maturity amount is free from tax hence making ULIP and efficient product. Fixed deposits that saves the policyholders from tax payment are offered in lock-in period for 5 years. However, the returns are cumulated to the income of policyholders and are not tax-free according to the income bracket.
- Favourable For Beginners: Investors that lean towards fixed deposits are gradually pacing towards insurance policies and mutual funds. With such a change in the pattern of investments, ULIP makes for a sensible choice for new investors. For generating wealth ULIPs can be a great tool, specially for long term investments. Since the markets are going digital the ULIP calculator can also help provide necessary information with just few clicks making it easier for policyholders. It is diverse in terms of granting funds and ideal for whoever wants to start early.
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