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
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
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.