The economy’s instability, not just in India, but globally, has become a growing concern. Things change overnight, your financial plans become redundant, and you and your loved ones are left questioning how to recover. You need a varied solution that serves to assist in unexpected financial crunches.

The Indian youth today have tremendous responsibilities. Not only do you have to take care of yourself, but also dependents such as spouse, parents, children, and even pets. It is a massive undertaking for which you require effective financial planning. One source of income simply isn’t enough anymore.

It is a serious problem that you need to address, and there is a highly suitable solution in the form of ULIPs. So, let’s get to know the ULIP meaning and how the benefits of ULIPs can see you through tough times.

Exploring the ULIP meaning

ULIPs are a form of life insurance policy, but the ULIP meaning and functionality exceeds the common agenda of such schemes. Let’s break down the ULIP meaning to its essential components:

1. ULIPs serve the purpose of protecting the financial stability of your loved ones. When you purchase a ULIP, you need to specify the coverage and policy tenure, much like any other life insurance policy.

In the event of your death during the policy tenure, the insurer pays your beneficiaries the death benefit.

1. ULIPs are Unit Linked Insurance Plans. The actual ULIP meaning is hiding behind this particular component.

   When you purchase a ULIP, aside from the death benefit to help secure the financial future of your loved ones, you can also help yourself. ULIPs allow you to invest money in the current market to earn profits. You can do this through your insurer, who will take the responsibility of making the investments in unit-linked and risk-free investments according to your risk appetite.

Basically, you need to select risky or risk-free equity or debt investments. You can invest in both for a balanced approach or choose one or the other. Based on your selections and expected returns on investment, the insurer invests your money in suitable market funds. You can use the profits to address financial setbacks during your lifetime. The profits are also paid to your beneficiaries along with the intended death benefit in the event of your demise.

The ULIP meaning translates to a 2-in-1 solution for both life insurance and investment. You can avail of massive financial earnings and secure the future of those you leave behind.

Benefits of ULIPs

All forms of life insurance offer tremendous benefits for you and your loved ones. The benefits of ULIPs far exceed the conventional advantages of any other plans. Here are some of the top benefits of ULIPs:

1. It offers dual functionality. You can secure the future of your loved ones with the death benefit as well as your own financial future with market investments.
2. You can invest your money based on your financial goals and risk appetite. As per your preferences, you can minimize or maximize the risk, or you can take a balanced approach.
3. You can use the ULIP calculator online to figure out a suitable investment plan.
4. You can claim tax benefits of ULIPs in the following scenarios:

• If the total annual premium for ULIPs, including the investment component, is less than 10% of the sum assured.
• If the total annual premium is less than INR 2.5 lakhs.
• If you switch investment funds in ULIPs.
• If the sum assured is at least 10x the annual premium.

1. It helps you develop an investment habit, thus building a substantial corpus for you and your loved ones.
2. You can easily liquidate your assets in times of financial need. You can also withdraw the profits at your discretion or keep them for extended durations to avail of higher benefits of ULIPs.
3. ULIps help build a backup financial plan for emergencies.
4. The funds from the death benefit and the profits from market investments cumulatively amount to a higher sum. This amount can be used by your beneficiaries to tackle their own financial plans and challenges, including

• A child’s education
• Starting a business
• Marriage
• Medical emergencies
• For a comfortable life in the retirement years.

The benefits of ULIPs can also help you during your lifetime. Since only part of your premium is invested, you can rest assured that your loved ones will be well-taken care of after your death. The invested amount keeps making money for you during your lifetime without the need for separate investment plans.

Conclusion

It is not easy navigating the economy in today’s volatile environment. Luckily, the benefits of ULIPs exceed expectations and can help you address major financial crises without stress or additional investment requirements. You can merge the benefits of life insurance with these diverse investment plans and reap financial benefits during your existence and secure the financial future of your loved ones after death.