Unit-linked insurance Plans (ULIPs) are market-linked financial instruments that combine protection and investment features. A portion of the premium amount may be invested in different tools such as equity, debt, or hybrid funds. This means you enjoy life cover and can earn returns on your investments.
You may modify your investment allocation based on your financial situation and changing life goals. You may also choose investments per your risk appetite to earn returns. You may opt for equity funds if you are willing to assume more risk to earn higher returns. Alternatively, if you are risk-averse, debt funds are the ideal choice.
Several insurance companies offer different ULIP plans, and you must remember that the returns are market-driven. Such projects are classified into different categories based on their objectives and purpose. Here are the four popular categories:
- Retirement ULIPs
- Children education ULIPs
- Health benefits ULIPs
- Wealth creation ULIPs
These insurance plans have several benefits, such as advantageous features, affordable ULIP charges, and a transparent structure. You may also easily switch between different programs as per your preferences. Here are five strategies that may be a good investment option in the current year.
1. HDFC Standard Life – Balanced Fund Life Super II
The company provides different plans to ensure you choose the one most appropriately suits your needs. You may choose from various options, such as Crest, Capital Shield, Click2Invest, and Pro-Growth Plus. The ULIPs offered by HDFC Standard Life offer the following features:
- The extra life option provides death benefits and accidental death benefits
- You may earn higher returns because a portion of the premium is invested in financial products such as equity and debt.
- HDFC Standard Life provides extra life, health, and disability plans that include death benefits, critical illness, and accidental death benefits
- If you prematurely withdraw the money, you must pay the surrender charges, which depend on the fund value and the year of withdrawal.
- The company offers accidental death, permanent disability, and death benefits through the life and disability feature.
2. Future Generali Life – Future Dynamic Growth Fund
The ULIP returns on this plan have been excellent. This plan invests in equities only, which makes it a risky option. The return on investment (ROI) is moderate to high, and this plan covers 30 times the annual premium paid. This plan is an excellent option if you wish to accumulate wealth in the long term.
The fund’s value is paid on maturity, or you may withdraw partially at the end of five years. If you need to file for a claim, the company makes the settlement within seven days of receiving an accurately filled claim form.
3. Bajaj Allianz Life – Asset Allocation Pension Fund
Bajaj Allianz Life offers various ULIPs, which help in wealth creation. You may choose between limited and regular premium payment options. This plan provides several benefits, including payment frequency, redirecting and switching funds, and asset allocation flexibility. You may choose a plan that suits your requirements and risk profile. Some programs include Retire Rich, Future Gain, Principal Gain, and Fortune Gain.
The company offers assured death benefits at different premiums that are beneficial for planning your retirement. Bajaj Allianz Life plans can deliver higher returns if you can withstand higher risk. During 2017, the Asset Allocation Pension Fund provided an 18% absolute return. On maturity, you receive the regular fund value and the top-up value. You may accept the maturity benefits in five annual installments through the settlement option.
4. Kotak Ace – Balanced Fund
ULIPs offered by Kotak provide the advantage of market-related returns and insurance protection. You may pay the premium via different options per your preference and requirements. Following are some ULIPs offered by this insurer:
- Invest Maxima
- Ace Investment
- Platinum
- Single Invest Plus
- Wealth Insurance
- Single Invest Advantage
Before investing in any ULIP provided by Kotak Mahindra Life, you must invest some part of your investment in the Kotak Ace – Balanced Fund. The returns on this fund in 2017 were 22%. You may take the benefits in installments or as a lump sum on maturity. The maturity benefits include the fund value and loyalty additions, if any. The premium amount paid is tax-free as per section 80C of the Income Tax Act, and the maturity proceeds are eligible for tax benefits under section 10.
5. Canara HSBC Life Unit Linked Whole Life Plan – Balanced Fund
Like other ULIPs, this plan offered by Canara HSBC Oriental Bank of Commerce Life provides life cover and market-related ROI. Different programs include Grow Smart, Platinum Plus, Dream Smart, and Smart Lifelong.
The Unit Linked Whole Life Balanced Fund delivered 24% returns in 2017. You may check the policy status on the company portal. The claim procedure is simple, and the nominees may visit their nearest branch along with the death certificate and policy documents in case of their demise.
ULIP is a complicated financial product. Each plan comes with unique features and benefits. Considering your investment objectives while choosing among the different types of ULIPs available is important. You must select one that suits your risk profile, investment objectives, and financial situation for maximum benefits.
