Most of you out there must have heard about ULIP plans in India. ULIPs are life insurance plans where the premiums paid by you is divided into two parts, one part going towards investing in money-market instruments and the other one towards risk coverage. There are a lot of companies offering ULIP plans in India. ULIP plans in India are offered by life insurance companies as investment plans.
What are ULIPs?
Unit Linked Insurance Plans like Edelweiss Tokio Life – Wealth Accumulation(Accelerated Cover) are market linked insurance plans. As mentioned above, one part goes towards coverage of life and the other part goes towards investment in market-linked instruments to maximise the returns. The returns that you get in this policy are linked to movements in the market and the risk in the investment is borne by you. This is an instrument for people with a higher appetite for risk. For instance, for a Sum Assured of approximately 4 lacs, you will pay a premium of Rs. 27,000/- for 10 years with a policy term of 30 years. Your maturity benefit will depend upon the market conditions, but assuming an interest rate of 8%, the maturity benefit will be approximately 7 lacs.
You also have the option of switching your investment between one fund and another. Funds are the category of stocks in which your money is invested. This option of selecting funds rests with you and you can switch between funds depending on your market outlook and risk appetite. If you are not averse to taking risks and are in search of higher returns, you can opt for this. The returns on a 20-year period are better than those offered by F.D’s. Most of the ULIP plans in India, especially the ones offered by Edelweiss Tokio are doing good. All the funds of Edelweiss Tokio were rated as 5 star as on Septemebr 31,2016 by Morning Star, which is a fund rating house.
If you have the appetite for risk, ULIPs like Edelweiss Tokio Life – Wealth Accumulation(Accelerated Cover) are the ideal instrument for you to maximise your wealth.