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Simple steps to make the most out of your ULIP investment plans

Nov 30, 2018 | 2 years ago | Read Time: 3 minutes | By iKnowledge Team


Monitoring your own market investments requires you to invest not only your money but also an equal amount of time. This time is spent on researching market trends, historic data, stock performance and many more such factors on a daily basis. If you are an active capital market investor then this is no big deal for you, however, if you are like most investors looking to generate good returns on your investment and save tax on it too, without risking too much on market volatility, then ULIP is the investment plan of choice.

ULIPs can be considered as the most cost-effective avenues for entering the equity market and make sizeable returns over the long term. They are essentially life insurance plans with the added benefit of investing in the capital market. You can choose from the variety of plans offered by insurance companies to invest a percentage of your premium in well-established investment funds. All you need to do is make the most out of the ULIP Insurance Plan for higher returns is to follow a few simple steps.

Optimizing Asset Allocation

Correctly optimizing your asset allocation strategy can determine the risk to return ratio on your portfolio. Asset allocation means to simply diversify your investments across different asset classes. Hence, proper optimization of your asset allocations, by investing in different asset classes, can save you from heavy losses that you may suffer by simply investing in a single asset class. With ULIPs in your investment plan, you can easily switch between different asset classes like debt, cash, and equity, depending on the financial goals and risk appetite of an individual.

Selecting Between Debt and Equity Funds

Each asset has different characteristics of returns and risk. Equity schemes are well-known for their high-risk high-return value, whereas debt funds offer lower risk and low return over a long term period. Debt investments make your investment plan more solid and less risky, and a balance of both is called Balanced Funds. ULIPs usually have 40% equity exposure, giving them a reputation of being safer investment plans.

Life Stage Requirements

Your financial goals play an important part in defining your risk appetite. Your child’s education needs for example, require long-term planning. As a thumb rule to such a situation, equities take up early to mid-tenure of a ULIP investment plan, while it is safer to save the corpus you’ve built by switching over to debt funds as the time comes for your child to pursue his or her higher studies. That way the saved corpus can be used to pay admission fees.

Keep up with premiums regularly

ULIP plans entail few charges that are deducted at the time of activation. These charges include fund management charge, policy administration charge, and mortality charge, surrender charge, etc. Some of these charges are paid back to the insured as loyalty addition. The 5 year lock-in period inculcates regular saving discipline which can be carried forward to other investment avenues to generate compounding returns on investment in the long run.

Stay up-to-date with the market

As a protection plan, the beneficiary of the ULIP policy receives either the sum-assured or the fund value, whichever is higher at the moment of claim post your demise. Secondly, the fund value is paid out to you in the event where you survive through the maturity of the policy. Staying updated with the market could ensure that your benefactor receives a higher fund value benefit from your monitoring of the funds in the event of your demise.


ULIPs are excellent fund management tools that offer different investment strategies to multiply your returns over a significant amount of time. Aegon Life’s iInvest online plan encompasses a financial cover for your family along with the option of investment to grow your funds. The plan offers you the flexibility to choose from 6-unit linked funds and deducts no allocation charges, thereby helping you maximize your investment. Not only is it versatile in terms of the dual benefit of being an insurance as well as an investment plan, it also triples over as a tax saving investment plan with controlled market risk.

II/Oct 2018/4465


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