Future Generali

How to make money through ULIPs?

ULIPs are life insurance instruments that combine benefits of both life insurance and investments in money markets. The best ULIP plan will have a simpler cost structure,and they offer investors a choice to invest in fund options according to their goals and preferences. From the money-making point of view, the premiums are invested in equity and debt funds of your choice that improves the returns but enhances the volatility of investments. Other benefits of ULIPs that provide wealth creation options are:

Compound Interest: When you buy a ULIP plan you can invest a portion of your sum in the fund of your choice, be it equity or debt. In return to your periodic investments, you are awarded returns, which in the long run can grow your amount by a significant margin (*Note that returns are market-linked and may increase or decrease as per market environment).

Tax Benefits: Investments in the ULIP help you in saving taxes. The premium paid for ULIP can be deducted from taxable income as per applicable tax laws. This allows you to grow your savings. Apart from this, the maturity and death benefit amount is exempted from income tax as per applicable tax laws. Therefore, these tax benefits make ULIP an attractive investment option.However, to avail maximum benefits,check that your sum assured is at least ten times of the premium that you are paying.

Top-Up Option: The top-up option in ULIP allows you to invest extra premium in addition to the existing premiums under the policy. So, that you can invest more into the funds of your choice.Moreover, the additional premium value also increases your life cover providing better protection to your family.One should also keep in mind that if the top-up sum assured is not ten times of the top-up premium, the benefits on the policy may become taxable.