ULIPs an Increasingly Popular Investment Option

If you are looking for ideal investment plans, a Unit Linked Insurance Plan (ULIP) should be your answer. Although earlier, ULIPs have been largely criticised but the scenario is changed now. People have suffered losses in ULIP plans mainly because of lack of knowledge of the plan. 

ULIP is a product offered by an insurance company. It gives benefits of investment and insurance both in a single plan. The premiums paid are invested in different markets as per the investor’ risk taking-ability. ULIP has always been a long term investment option. But, due to lack of information people seeking short-term gains have also invested in it, in anticipation of higher returns. As ULIP failed to meet their expectations, a negative image was created for it. Apart from this, the charges levied on ULIP plans were very high in the past. Hence, the gap between investment and returns was too less. These factors restricted investors from taking up ULIP plans.

Insurance Regulatory and Development Authority (IRDA) understood the growing aversion of people against ULIPs. It worked over it and derived some amendments in 2010. It increased the lock-in period of the plan from 3 years to 5 years. This made it clear to the investors that ULIP is only a long-term investment option. IRDA also stated that the annual charges on ULIPs should not extend the limit of 2.25% for the first ten years of the policy.

Benefits of ULIP

ULIP gives many benefits which are helping it to gain popularity with investors. It is one of those investment options in India, which gives higher returns than many other plans. It is well-structured to give long term benefits to the investors. The company experts understand various markets and raise the chances of gains from them.

Besides, the flexibility offered by ULIP has attracted many investors. A person wanting to take higher risks can opt for ULIP and people seeking low-risk plans can also opt for this. You can enter in one market and switch to another market without any extra charges. You can thus, change your risk degree from lower to higher to play safely and have a steady growth in the market. If your needs have changed, you can also opt to come down to lower risks market.

ULIP has changed tremendously over time. The numerous changes, in the recent years have made it to be a major attraction among investors. It is gaining popularity this year, because of the flexibility and scope of higher returns which it offers. It is one of the best investment plans in India to invest in. Besides, it is sure to get a higher reach in the coming years.

About HDFC Life

HDFC Life, one of India's leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life's product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.