Things you could do thanks to your ULIP Savings

Jan 29, 2018 | 12 months ago | Read Time: 3 minutes | By iKnowledge Team

Has your ULIP investment left you with an envious corpus? Find out how you could use it.

A unit-linked insurance plan (ULIP) is a common investment option today. On the one hand, you get life insurance. On the other hand, you get to invest a part of your money in stocks and bonds. And you can invest according to your risk appetite. More often than not, they yield better returns than ordinary savings accounts. If you have a cash corpus sitting idle, here are some things you could do with it:

Pay off a debt in part or full:

Do you have a home loan or a personal loan to service? Then use the ULIP corpus to foreclose the loan. If you have opted for a fixed rate, this would help you save more. Over the years, you would end up paying a lot of interest. But, do check whether your lender will impose a prepayment penalty. See how this will affect your credit rating.

Increase your health insurance coverage:

Think ahead and estimate how much healthcare costs will rise when you are older. Get coverage for critical illnesses too. Health insurance is more expensive once you are a senior citizen. So, invest in a better health plan for your parents. A top-up plan or a super top-up plan may be a good place to start. You may want to increase your sum assured as well.

Invest in real estate:

Use the money as a down payment to buy an asset or invest in real estate. That way, you are less likely to liquidate tangible assets unless essential. Also, assets like gold or real estate increase in value over the years. So, you will get a bigger corpus when you liquidate.

Upgrade to a better car:

With old cars, over the years you pay more for maintenance and keeping it roadworthy. Also, with age, your needs change. Instead of a small car, you may need a sports utility vehicle that fits your kids, spouse, pets, and in-laws in comfort. Trade off your old car, add a bit on your own, and you are ready to get a better model. If you have enough of a corpus, you might not even need to take a car loan. It all depends on how much you are willing to spend.

Renovate your home:

Use the corpus for home renovations and repair. Timely maintenance and renovations are necessary if you live in a house. A facelift in the form of a fresh coat of paint or modern and upgraded fittings improve the value of a home.

Invest in a pension scheme:

Many people tend to underestimate their post-retirement needs. In fact, as health fails and inflation rises, people need more money. An extra income will keep stress at bay in this phase of your life.

 Invest in ULIPs again:

Take risks. Invest a part of your ULIP savings in high-risk investments. They have a better yield potential. You may get high returns if things click. Even if you do not, this is money you can afford to play around with.

Upgrade your skills:

Get that MBA degree you have been putting off. Go for the technical training you have been eyeing. Get to the next level in your field of work. Education is an investment. It never fails to bring high returns.

Travel:

Check off those destinations in your bucket-list and have fun. Use your ULIP savings to see the world, and simply quench your thirst for the unknown.

An unexpected cash kitty is a wonderful thing. Splurge and spend. Invest in yourself. But resist the temptation to blow it all up. The future is uncertain. Make sure you create a safety net for yourself. Not everybody gets a chance or the resources to do that. So, here’s to responsible spending.


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