Many people mistake ULIPs to be either an insurance plan or an investment plan. But the truth is that ULIPs or Unit Linked Insurance Plans are a conglomerate of both. It can help invest in debt instruments, stocks, and even commodities. However, the more important topic of discussion would be why ULIP is a timeless investment today.

To help you unravel the answer to it, we have created this comprehensive article. So, read till the end and find out why investing in a ULIP is a wise choice.

Why Invest In ULIP?

There are numerous reasons why investment in ULIP can be a safe call. Here’s a detailed guide on it for your reference.

1. High Returns

One of the main reasons to choose ULIP is the equity benefit it has to offer. If you have a high-risk appetite, then you should consider equity funds, as they can help you get high returns. So, whatever premium you are paying will eventually be invested in a multitude of asset types. This can happen via numerous funding options available in ULIPs.

2. Lock-In Period

If you wish to improve your habit of long-term investment, then ULIPs can be great. This is because they have a stringent five-year lock-in period. You can pay the premiums for them monthly or yearly as per your preference. However, the policyholder may choose to cancel their insurance if need be. They can also cancel their withdrawal assets. As such, considering investing in ULIP can be a good call.

3. Partial Withdrawal

Although ULIP offers a stringent lock-in period, it allows you to mitigate your risks during an emergency. So, if need be, then you may use their partial withdrawal system to withdraw the funds. This way, you can get the financial assistance required in case of an emergency. However, it is best to double-check regarding the same with your insurance provider. This helps abstain from any complications in the long run.

4. Improved Flexibility

With ULIP plans, you can easily move your investments across funds. This is possible as long as you are holding the policy. This can be done both wholly or partly. Eventually, you can choose the most convenient option, depending upon your needs and affordability.

5. Tax Exemptions

ULIP provides a tax-free maturity benefit. This is possible under Section 10 (10D) of the Income Tax Act. In fact, individuals can also decrease their tax burden up to ₹1,50,000. That is why you should consider investing in ULIP now.

The Bottom Line

ULIP is undoubtedly one of the most timeless investments. If you wish to do successful financial planning in the long run, then ULIPs can prove to be useful. Transparency, liquidity, and disciplined savings are some of the main reasons why many opt for it. However, it is also a great investment option because of all the flexibility it offers, as mentioned above. So, speak to your insurance provider today about this plan and get your hands on it at the earliest.