ULIP Plans in India have become popular among different categories of people. It offers comprehensive benefits that can satisfy varied financial needs. Single people should consider purchasing ULIP funds to secure their investment and grow wealth in the long term. There are many other ways a ULIP policy can benefit single people. Here is a detail about 5 reasons single people should consider purchasing the ULIP plan.
Before we get started, let us understand what a ULIP Plan means.
What Is A ULIP Plan?
A ULIP plan is a comprehensive life insurance plan that provides a life cover that gives your nominee a lump sum death benefit in case of unexpected death and market-linked returns on maturity. In addition, you will get the option to invest in financial securities based on your risk appetite and switch between them during unfavourable market conditions. Here are a few reasons why single people should invest in the ULIP policy.
- To accomplish future financial goals – Single people will have to live independently in their lives. They may not have the necessary family support to fund all their initiatives. For instance, they might want to pursue higher education in a foreign university, start a new business, etc. To plan for such money goals and accomplish them as per the planned timelines, investing in a ULIP plan becomes important.
As the ULIP policy allows for choosing the fund options to invest in based on individual risk profiles, they can decide approximately on the required funds and choose the best fund option based on their requirement, timeline, and the inflation rate. The ULIP guaranteed return will prove beneficial if they have taken the right steps in financial planning.
- Clearing off debts – When single people increase their financial assets by purchasing a new house, car, etc., they might have availed of a loan. The liabilities might fall on the immediate family members during their unexpected demise. And the family members may not be in a position or mindset to pay for the liabilities. Since a ULIP policy also provides a life cover, the nominee can utilise the lump sum death benefit to pay for the debts.
- Securing investment and growing wealth – Single people may not have increasing family financial commitments. However, they have to invest a part of their income to secure their future and plan for retirement. ULIP plans provide a secure platform to invest their money and grow wealth in the long term. As the guaranteed ULIP plans provide market-linked returns, they can provide a higher return if you can afford to take a higher risk through the policy tenure.
- Flexibility – The ULIP plan provides varied fund options such as debt, equity, and the balanced fund. For instance, the Tata AIA life insurance policy provides 11 fund options allowing you to choose the ideal fund option considering your income and financial commitments. You can choose from the available funds and switch between them, considering the changing economic scenario throughout the world. So, if they have invested in the equity fund and want to switch to a conservative debt fund, they can choose to do so by switching it with the help of their fund managers.
- Tax benefits – Investing in the ULIP plan can also offer tax benefits. The premium that you pay towards the ULIP policy and the maturity returns will qualify for the tax deduction and exemption under Section 80C and Section 10(10D) of the Income Tax Act, 1961.
Purchasing a ULIP policy will provide a life cover and market-linked returns on maturity. Single people can utilise the flexible features to secure their investment, grow wealth, pay for their debts, and accomplish their financial goals by investing in the ULIP plan with precise financial planning. Moreover, one can take the expert advice from the fund managers to make well-informed investment decisions and benefit to the maximum possible extent!