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How to Use ULIP Plan For Your Long-Term Financial Goals?

  6/27/23 8:40 AM

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Planning for the long-term can be tricky. The large timeline can make it hard to pick the right option. Some long-term investments also tend to be less flexible, making it harder for you to take the leap of faith and invest in them. Thankfully, a ULIP plan is an exception here. A ULIP scheme can offer your high returns and life protection, making them the ideal long-term tool. ULIP plan charges are comparatively lower than several other investments, and they offer multiple flexible features to suit all incomes, budgets, and financial goals.

If you are still unsure about investing in a ULIP, here are some ways in which you can use ULIP insurance to plan your long-term financial goals.

ULIP policy and long-term financial planning

1. Start with organizing your goals

Typically goals can be categorized into three types:

  • Short-term goals
  • Medium-term goals
  • Long-term goals
  • Out of these, long-term goals can commonly include:
  • Purchasing a house
  • Planning for retirement
  • Saving for a child’s higher education
  • Needing funds for a child’s marriage

Long-term goals can vary for different people. So, start by organizing and planning all your long-term goals. Based on this, you can set aside a sum of money suitable for different goals. Once you have found your goal, you can move to the next step.

2. Fix a timeline for your goal

Every goal will have a specific timeline. For instance, if you start saving when you are 30, you will likely have another 30 years to save for retirement, assuming you retire at the age of 60. However, if you start planning for a child’s college education at the age of 30 when your child is 3 years old, you will have 15 years to save enough before your child starts college.

The timeline, to a large extent, dictates the amount of risk you can add to your investment portfolio, the right kind of investment instrument for your goal, and the value and frequency of your investments. Hence, make sure to set realistic timelines for your goals and accordingly invest in a ULIP scheme.

3. Invest in a ULIP plan

A ULIP policy can be the ideal long-term investment tool for varied financial goals. The rate of return is high. Moreover, ULIP insurance safeguards your loved ones in your absence. Here are some features of good ULIP plans that make them suitable for long-term needs:

  • They offer rewards for staying invested: The longer you stay invested in a ULIP plan, the higher can be your earnings. Not only does your invested capital benefit and multiply with the power of compounding, but it also grows with loyalty additions. Insurance companies offer guaranteed additions and wealth boosters as a reward for staying invested for the long term. This increases your overall corpus by ensuring higher profits.
  • ULIP tax benefit helps you save more: ULIPs offer tax benefits for the premiums paid under Section 80(C) and on the maturity benefit received under Section 10(10D). However, keep in mind that as per the budget of 2021, a ULIP is a capital asset like other mutual funds. Hence, the returns from a ULIP will be counted as a capital gain, and you will be taxed long-term capital gain tax on ULIP. This is only limited to the returns earned and not the ULIP death benefit given out to your loved ones. So, when planning for your long-term needs, make sure to factor in the tax as you would with other investments.
  • They let you manage your risk: The market can fluctuate and change many times over the long term, and ULIPs let you take advantage of this fluctuation with their fund switching options. You can choose from equity, debt, and balanced funds as per your risk capacity and the market. You can make multiple switches through the course of your policy term. This enables increased profits. For instance, if the market is on the rise, you can invest in debt funds, and if the market falls, you can invest in equity funds.
  • ULIP insurance protects your family members: The insurance component protects your family members in your absence. The life cover ensures that regardless of life’s unexpected turns, your loved ones are always financially secured and well-prepared to cover their needs and live comfortably.

Edelweiss ULIP: Wealth Secure+

Edelweiss Life Life – Wealth Secure+ is a Unit Linked Insurance Plan by Edelweiss Life that can help you achieve all your long-term goals, such as retirement, home purchase, higher education, and much more. Here is what the plan offers:

  • There are three options in the plan that can cater to all kinds of needs. Here’s how:
    • Individual Option: Helps single people meet their goals.
    • Joint Cover Option: Helps couples achieve joint goals.
    • Child Option: Helps parents plan for their children’s expenses.
  • The plan offers loyalty additions and maturity additions to enhance earnings.
  • There is a systematic withdrawal plan for payments like monthly, quarterly, semi-annual, or annual payments.
  • The premiums are affordable and start from as low as Rs. 1000 per month. You can also add top-up premiums.
  • There are seven diverse funds to choose from and invest in.
  • The plan offers the option to invest for a minimum of 5 years.
  • The plan provides you with tax benefits under Section 80(C) and Section 10(10D).

To sum it up

A ULIP can help you achieve all your long-term targets with a variety of funds and investment strategies. Moreover, with competitive ULIP plan charges, you get value for money. Your loved ones are protected, and your money grows in a safe environment, ensuring substantial growth. However, it helps to plan in advance and invest at the right time so that you can comfortably invest at a preferred pace and reap the many benefits of ULIPs.



Neha Panchal - Financial Content Writer

Neha used to be an Engineer by Profession and Writer by passion, which is until she started pursuing full-time writing. She's presently working as a Financial Content Writer, with a keen interest in all things related to the Insurance Sector.

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