Introduction

Life insurance holds different values in everyone’s life. It would be a financial safety net for some after retirement, while for some, it’s a backup post untimely death.

A life insurance policy is an effective tool that safeguards your family from unfortunate mishaps in life. It’s a long-term investment opportunity with particular advantages.

Buying life insurance doesn’t mean simply buying one without understanding the dynamics and repercussions. While insurance can assist assure cash flow in tough times, it is also clear that ill-advised plans can be useless in a crisis. Therefore, always list your requirements and examine all of the insurance options available from the top insurers.

This blog will educate you about life insurance, its benefits, ULIP, and the best Unit Linked Insurance Plan one must consider buying in India.

What is Life Insurance?

A life insurance policy is a contract between an insurance company and a policyholder that guarantees payment of a specified sum to the selected beneficiary in an unfortunate event such as untimely death or chronic ailment during the period of the policy.

In exchange, the insured agrees to pay a certain amount of money in premiums, which can be paid monthly or in one lump sum.

Though life insurance is necessary for everyone, it is also crucial to invest money to keep up with inflation. It is when the Unit Linked Insurance Plan comes into play. ULIPs protect your life and help you increase insurance premiums to keep up with inflation. For you, it’s a win-win deal.

But, buying any term insurance plan should be timed and should see through a few points.

Tip: Never purchase life insurance for the sake of buying. Know your requirements, understand your budget and other annual expenditures, and understand which Plan one should vouch for.

What is a Unit Linked Insurance Plan (ULIP)?

A Unit-Linked Insurance Plan (ULIP) is an insurance package designed to help you build wealth. ULIPs are often transparent and customizable, allowing people to customize their plans to meet their individual needs.

It provides protection and the ability to invest a portion of your money in eligible investment alternatives such as stocks, bonds, mutual funds, and other investment possibilities.

The Unit Trust of India was the first to develop ULIP plans in 1971, and the Indian insurance industry has embraced them ever since.

Investing in these programmes exposes you to financial market risks. They bear the investment risk in the policyholder’s account. As a result, it suggests deciding on an investment based on one’s requirements and risk tolerance.

Another issue to examine is the expected demand for the cash invested by policyholders. An arrangement with many units is also more apparent. The costs, such as fund administration fees and allocation fees, are specified upfront.

What is the best ULIP plan in India?

Aditya Birla Sun Life Insurance Wealth Assure Plus Plan

Under this ULIP Plan by the ABSLI, it insures you against death, disability, and sickness. The ABSLI Wealth Assure Plus Plan can help you achieve your wealth accumulation goals. The portfolio’s investment is the policyholder’s responsibility. Here, you can invest in one of five investment techniques or one of the sixteen funds with this ULIP Plan.

The Plan includes a survivor benefit, which provides a lump-sum payout to the policyholder after the insurance period. The sole requirement is that all premiums be paid.

Features:

Death benefit: ABSLI Wealth Assure plan provides the user with (depends upon the Plan and invested Option). The nominee will pay the death benefit if the life insured’s untimely death is within the policy term. The death benefit shall be affected based on:

*Fund value at the time of death announcement

*Sum Assured (less any partial withdrawals made in the two years immediately before the Life Insured’s death, if any); or

*105% of the annual premiums/single premiums collected till the Life Insured’s death.

Maturity Benefit: The fund value will be paid out in a lump sum or as a planned payout using Settlement Option if the life insured survives until the end of the Policy Term, providing all due premiums have been paid.

Note: Premium allocation fee and mortality charge will be refunded in addition to the fund value and added as extra units to the fund value.

Waiver of Premium on critical illness: Under this umbrella, the insurance company will pay all future premiums, if any, if the life insured suffers from any of the specified Critical Illnesses, total and permanent disability during the Policy Term (check for the Option you have purchased).

Customizable benefits (comes with additional cost)

Surrender benefit: This is where we are here for your rescue at the time of emergency. In this benefit, you can surrender your insurance to us at any moment during the Policy Term if an emergency arises. Any such surrender shall be handled per the conditions outlined in the section on Policy Discontinuance.

How to choose the best ULIP Plan?

Choose the right Life Insurance Coverage!

The ULIP plans are intended to assist you in achieving long-term financial objectives that could help you in the longer run, including children’s education and retirement. ULIP provides a financial safety net for your family in the event of your untimely death.

As a result, you must choose the appropriate amount of life insurance to protect your loved ones from financial crunches. For this, you should have a clear idea about one’s monthly and annual expenses.

Sort your priorities and understand your objective

With ULIP, you can invest in a variety of debt and equity funds. While equities have long-term solid development potential, debt investments offer better safety against market fluctuations. It’s preferable if you pick a ULIP plan based on your objectives and risk tolerance.

Think long term and not short-lived financial security

ULIP policies are designed to help with wealth accumulation. It is prudent to invest in ULIP insurance over a longer period. In ULIP, a 5-year lock-in period applies to ULIP plans, after which you can make partial withdrawals from the insurance. Furthermore, by investing in ULIP insurance for the long term, you may watch your money increase to compounded returns.

Don’t you want to save some tax?

Having the best ULIP plan in India helps you save much money on taxes, thanks to the Income Tax Act of 1961. A ULIP plan provides the following tax under the subsequent law,

• The Income Tax Act of 1961, Section 80C, permits you to save up to 1.5 lakh on your ULIP payment.
• You have a number of stocks and debt fund options to pick from.

Maturity/death benefits under a ULIP plan are free from taxes under Section 10(10D) of the Income Tax Act of 1961.

Conclusion

ULIPs can assist you, and your loved ones build a valuable corpus to help you reach your objectives. You’re generating money and safeguarding your wealth with life insurance benefits at the same time. Consequently, it’s critical to identify and pick a good plan to assist you and your family.

Depending on your risk tolerance, investment horizon, and market movements, you can swap funds. ABSLI  Unit Linked Insurance Plans may help you start creating your future today with features like different capital management choices and ULIP tax savings.