We all know how essential it is to save money and thus opt for different investment tools like insurance, purchasing FDs and RDs, buying gold, property and ULIPs. If you are planning to invest in ULIPS then here is something that can quicken your purchasing process.
What is ULIP?
ULIP is an investment option where our money in invested into the equity market. This dual sided sword offers insurance protection along with wealth creation opportunities. The premium submitted is divided into 2 buckets- one goes into providing you the life cover and the residual is invested in bonds or stocks. The return in the second case depends on the performance of the underlying fund being opted by us. ULIPs are preferred majorly for their exceptional transparency and flexibility.
Life cover feature
ULIP is preferred as the investment tool but not to forget its insurance aspect. Thus, it is necessary to ask the advisor or agent regarding the life cover offered under the ULIP you are planning to purchase. There might be a fixed life cover or range of coverage to finalize from. This would help you in aligning the plan with your financial objectives and help you purchase the one that is in line with your goals.
Any charges to pay
It is good to have a clear picture of everything you are planning to do for your future. You must have proper knowledge about the charges that would be accompanied with the servicing the policy. Majorly the charges to be paid would include- mortality charges, switching charges, fund management charges, policy administration charges and surrender charges. It is advised to get proper information about the frequency of these charges.
Investment options available
The investment in ULIPs is directed to debts, hybrid funds and equity market as per your selection. It gives you the liberty of investing your money in a particular type of fund or a combination of many. One must analyze his requirements, expectations and ability to handle risk before finalizing the investment choice. For this, you should also have a proper knowledge about the fund, its past and approximation of its future.
Your planning process needs to get information related to partial withdrawals, surrender value, switching between funds, option for additional investment etc. Our decision would never go wrong after such a thorough research process.