A penny saved is a penny earned - We have heard this phrase multiple times but how do many of us take the effort of saving money in different ways?
Investing in different financial instruments can help us plan our short and long-term goals. Investments and insurances are two efficient tools that prove to be very useful in saving money. Whether you are a resident Indian or an NRI, investing in an insurance policy and/or mutual funds can help build a corpus to achieve long-term goals.
A Non-Resident Indian (NRI) is someone who holds a passport issued by the government of India but lives abroad. Since an NRI holds an Indian passport, he/she gets to enjoy all benefits applicable to resident Indian citizens, including the right to invest.
Unit Linked Insurance Plan (ULIPs) is one of the preferred investment plans for NRIs for building their investment portfolio in their home country.
What is a Unit Linked Insurance Plan?
A Unit Linked Insurance Plan (ULIP) is a multi-purpose product offered by insurance companies. It gives the policyholder insurance and investment under a single integrated plan.
Benefits of Investing in Unit Linked Insurance Plans
#1 Flexibility in Plans
ULIPs provide the flexibility of choosing the sum assured and/or the premium based on the investor’s needs, financial capacity and risk appetite. There are high, medium and low-risk investment options under the same policy and the investor can switch between funds with ease. You do not need to go beyond your risk-appetite while investing in a ULIP Plan.
#2 Market-linked Returns
The investments made under Unit Linked Insurance Plans are connected to the market and hence, investors get to earn and enjoy market-linked returns. Invest in different market instruments such as equity funds and debt instruments to reduce risk and increase the chances of better returns. Diversify your portfolio to gain good returns.
#3 Regular Savings
A ULIP Plan can inculcate a regular saving habit. This helps to build a corpus that comes in use for future needs and accomplishing long-term goals. These savings can be used for your child’s studies abroad, buying a house, securing a stress-free retirement, etc.
#4 Maintaining Transparency
Whether it’s the value of an investment and expected rate of returns, coverage offered under the life insurance or quarterly statements, the insurance company maintains complete transparency with policyholders.
#Tax Benefits
Not all investment options provide tax benefits but since a Unit Linked Insurance Plan is a life insurance product, it provides tax benefits. You get tax rebates under section 80C for the premiums paid and all pay-outs received are exempted under section 10(10D) of the Income Tax Act, 1961.
Conclusion
A ULIP Plan is a wise choice and a smart investment. Its multi-faceted quality makes it an affordable option to consider. NRIs investing in ULIPs are presented with a wide range of options.
Press release by: Indian Clicks, LLC
