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How does ULIP help in wealth generation?
Unit Linked Insurance Plans, or ULIPs, have gained popularity as a means of investment due to their unique combination of insurance and investment benefits. One of the key advantages of ULIP insurance is its potential to help in wealth generation.
ULIPs allow policyholders to invest their premiums in a variety of financial instruments, including stocks, bonds, and mutual funds. The investment component of ULIPs provides the potential for higher returns over the long term, which can be used to meet financial goals such as retirement, children’s education, or marriage expenses.
In addition to the investment benefits, ULIP insurance also offers insurance coverage for policyholders, providing protection against accidental death, critical illness, and other risks.
In this blog, we will explore how ULIPs can help individuals achieve their financial goals and generate wealth over the long term.
5 Ways ULIP Help in Wealth Generation
If you’re considering investing in ULIP insurance, you may be wondering what the ULIP benefits are. In this section, we’ll explore five key ULIP benefits that may help you make an informed decision.
1. Capital gain benefits
The investment component of ULIPs provides the potential for higher returns over the long term, which can be used to meet financial goals such as retirement, children’s education, or marriage expenses.
The profits earned from the sale of these investments after a period of more than a year are considered long-term capital gains and are taxed at a lower rate compared to short-term capital gains.
The Invest 4G Plan offered by Canara HSBC Life Insurance is an effective way to gain capital appreciation. The plan comes with options that provide life insurance protection as well as the opportunity to save and grow your money.
With a range of 8 different Unit Linked Funds, customers have the option of allocating their premiums in any combination they prefer according to their risk preference. Furthermore, the plan offers several portfolio management options such as Systematic Transfer Option (STO), Return Protector Option (RPO), Auto Funds Rebalancing (AFR), and Safety Switch Option (SSO).
Invest 4G plans help to secure your financial future and accomplish your life goals. It’s an affordable way to start saving for important life milestones like buying a house, paying for college tuition, or any other significant expenses.
With Invest 4G plans you can choose the plan duration that best suits your individual needs and budget, whether it be 3 years, 5 years, 10 years, etc. You can even invest a small amount each month to maximize the growth of your savings.
2. Tax benefits
ULIPs may offer tax benefits under the Indian Income Tax Act. Policyholders may be eligible for tax deductions on the premiums paid and the maturity benefits received, subject to certain conditions. In addition, long-term capital gains from ULIP insurance are taxed at a lower rate compared to short-term capital gains.
The Invest 4G Plan by Canara HSBC Life Insurance is a unit-linked individual life insurance savings plan that provides tax benefits for both premiums paid and ULIP benefits received. The plan offers tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961 on both premium payments and insurance benefits received upon maturity or untimely death of the policyholder within the policy tenure.
3. Flexibility in investment options
ULIPs allow policyholders to choose from a variety of investment options, including stocks, bonds, and mutual funds. This flexibility allows individuals to tailor their investments according to their financial goals and risk appetite.
Invest 4G Plan by Canara HSBC Life Insurance offers a range of flexible investment options to policyholders. With this plan, you can choose from 8 unit-linked funds depending on your risk preference and allocate your premiums accordingly. The funds include Emerging Leaders Equity Fund, India Multi-Cap Equity Fund, Equity II Fund, Growth Plus Fund, Balanced Plus Fund, Large Cap Advantage Fund, Debt Fund, and Liquid Fund.
Overall, Invest 4G Plan by Canara HSBC Life Insurance offers an excellent opportunity for the policyholder to invest in a variety of options with utmost flexibility and convenience.
4. Customization of coverage
ULIPs offer the ability to customize coverage according to individual needs. Policyholders can choose the type of insurance coverage, the policy term, and the sum insured.
Canara HSBC Life Insurance offers a unique unit-linked life insurance savings plan called Invest 4G that gives you the flexibility to customize your coverage according to your goals and needs.
The plan allows you to choose from 8 different Unit Linked Funds, as well as 4 different Portfolio Management Options, to manage and build on wealth. You can also allocate your Premiums to any, all, or a combination of the Unit Linked Funds as per your risk preference.
With this plan, you can earn an added annual bonus depending on the insurer, and protection from further market volatility.
5. Option to add riders
ULIP insurance offers the option to add riders, which are additional insurance coverage that can be purchased for an additional premium. These riders may provide additional protection for specific needs, such as accidental death or critical illness.
Canara HSBC Life Insurance Invest 4G Plan is a great option for those who are looking for a combination of protection and savings. This plan offers the dual ULIP benefits of protection and savings, which provides life insurance protection as well as the opportunity to save for fulfilling your long-term goals.
It comes with flexible payment options and a choice of funds, with four different portfolio management options – Systematic Transfer Option (STO), Return Protector Option (RPO), Auto Funds Rebalancing (AFR), and Safety Switch Option (SSO).
The policy also offers the flexibility to add riders to enhance coverage. The riders available with the plan include Accidental Death Benefit Rider, Disability Benefit Rider, Critical Illness Benefit Rider, and Waiver of Premium Rider.
Wrapping It Up
Unit Linked Insurance Plans, or ULIPs, offer a combination of insurance and investment benefits to policyholders. One of the key ULIP benefits is the potential for long-term capital gains, which refer to the profits earned from the sale of a long-term asset, such as stocks or mutual funds, held for more than a year.
The flexibility of ULIPs in terms of investment options and the ability to customize the coverage according to individual needs make them an attractive option for many investors. ULIPs may also offer tax benefits, including deductions on premiums paid and maturity benefits received, and the option to add riders for additional coverage.
By understanding how ULIP insurance can help in wealth generation, individuals can make informed decisions about whether this type of investment is right for them. It is advisable to consult a financial advisor or professional before deciding on a ULIP investment.