Last Updated on May 24, 2019 by Gopal Gidwani

Since savings are a major part of our lifestyles, there is no denying that every individual develops the habit of savings with age. In order to ensure its effectiveness, the insurance companies provide a plethora of investment options to the customers. Amongst the tons of options for investment, Unit Linked Insurance Plan, as well as traditional equity investments, are the popular ones. While conventional customers prefer traditional equity investments, a majority of entrepreneurs opt for new-age ULIPs due to its diversity.

So if you’re wondering why a ULIP Plan is better than traditional equity investments, then keep reading to find out more. Take a look at these few of the most important reasons mentioned below.

4 reasons why ULIPs are better than equity investments
A ULIP Plan is the perfect combination of an investment as well as insurance under one roof. Additionally, it offers its customers with the dual benefits of protection and growth. With the help of a ULIP, an investor is able to not only secure his entire family but also generate wealth for the long run. Apart from that, there are a couple of other reasons that attract investors towards ULIPs. Here’s a better look at those reasons:

1) Reformation of ULIPs
A few years ago, ULIPs were constantly criticized in the markets due to its high costing. However, this is no longer the case after the reforms made by IRDAI which has made ULIPs cost-effective solution. Due to this, you can depend on ULIPs to serve you even at the time of your retirement.

2) Implication of taxes
As per rules and regulations by the Insurance Regulatory and Development Authority (IRDA), ULIPs exempts the policyholders from the payments of taxes. According to Section 80C of the Income Tax Act, 1961, the premiums are eligible for deduction up to Rs. 1,50,000 from taxable income. Additionally, as per Section 10(10D) of the Income Tax Act, 1961, the amount received on the maturity date of the policy is absolutely tax-free.

3) Availability of several types
When you invest in a ULIP insurance, the insurance companies offer you with multiple types of ULIP options in order to match your purpose of investment. ULIPs cater to the various needs of every customer. These ULIPs are provided to the policyholders for retirement planning, child education, and so forth. Moreover, you can also select from the numerous fund options like equity funds, debt funds, and balanced funds at the time of purchase of a ULIP based on your risk appetite.

4) Multiple benefits
Investment in ULIPs means utilising its various benefits in order to fulfill all your financial goals. A ULIP policy is beneficial for the investor in order to ensure his participation in the equity markets and for his family in order to protect them in the absence of the breadwinner. Besides, ULIPs provides its customers with other benefits as well. Take a look:

• It allows selection of funds based on their risk appetite. Later, they can avail the switching options in case they aren’t satisfied with the returns.
• An investor can make the selection of the coverage depending on the needs of the family members.
• It offers a lock-in period for a duration of 5 years.
• It makes provisions for add-ons or riders for the betterment of the investor and his family.

Now that you know these reasons why a ULIP insurance are better than traditional equity investment, what are you waiting for? The best ULIP Plan makes provision for maximum benefits for its customers and their family in order to fulfill their long term goals. Therefore, it is advisable to understand your needs and then make an investment accordingly. One thing you need to be sure of is that no matter what, a ULIP Plan always serves its customers with the best.