Why ULIP is a must in your financial portfolio?

Rhea was upset again this weekend. Even after trying for the 4th time she was not able to master the perfect recipe for the Biryani. She rushed to call her friend Sonal ‘who is a pro’ and complained about her failure. She asked her “How in the world do you cook your Biryani and manage to get that perfect authentic taste every time?

“The ingredients matter a lot, they are as vital as the proportions to get the perfect result,” Sonal promptly replied. The same formula applies to our investment portfolio. We are normally inclined to put our money where there is less risk involved. Traditional endowment insurance plans endowment insurance plans and Bank FDs are the most popular among investors.

A perfect portfolio should have a well-balanced investment mix and should not be dominated by a single asset class. To get a perfect recipe you need to make a responsible asset allocation with balanced ingredients like Equity, Debt, and Gold. The asset allocation is done according to the investor’s risk appetite, goals and time horizon for investment. For those who have high-risk tolerance, equity investments held for a long term can give good returns.

Aggressive investors can go for ULIPs as they can prove a great investment idea. Unit Linked Insurance Plan, more popularly known as ‘ULIP‘ is a life insurance product that provides insurance along with investment. Investment is offered in a variety of qualified investments such as stocks and mutual funds. ULIP has an edge over traditional insurance policies as it provides the policyholder with the advantage of flexibility; you can switch between different funds.

Based on your risk appetite you can switch between debt to equity funds. It is important to assess your needs and requirements before making a decision. ULIPs are highly beneficial to people who wish to invest money for a relatively long period of time.

Instead of managing two accounts with different financial products serving two different purposes, why not combine them into a ULIP, where you get a return on investment with tax exemption along with a life insurance policy.

So, the next time you are preparing Biryani (investment portfolio), make sure you choose the right ingredients (ULIP) to make the perfect rec