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ULIPs in the Investment Mix

Best ELSS Funds to Invest Online 



Taruna got another compliment for her culinary skills. This time for the biryani she made for the weekend dinner at home. One of her colleagues curiously asked: How do you get the taste right? I have tried several times with the same recipe but the result has been different?

Ingredients are as important as the proportion to get the desired result, she promptly replied. Same formula applies to our investment portfolio. We normally put our money where we find ourselves at minimum risk. Bank FDs and traditional endowment insurance plans are the most popular among investors.

A portfolio dominated by a single asset class cannot deliver the same result as that of a well-balanced investment mix. For desired results from your investments, you need to create an assortment of asset classes. To get a perfect recipe made of Equity, Debt and Gold, you need to make the asset allocation responsibly.

Asset allocation means the proportion of each asset in the portfolio according to the investor's risk appetite, goals and time horizon for investment. For those with a higher risk tolerance, equity investment held for long term can deliver smart returns.

Equity exposure can be taken through shares, mutual funds or market linked insurance plans. Understanding the stock market can be a time consuming process with higher risk in comparison to insurance plans.

For aggressive investors ULIPs can be a great investment idea. They provide dual benefit of market linked return and a minimum sum assured equating ten times of the annual premium for investors below the age of 45.

Market participating insurance plans can be a great vehicle for retirement planning, children education, wealth creation. You can attach a life goal to the policy before buying and reap the benefits on maturity. Such plans provide transparency and flexibility through partial withdrawals for needs arising mid-way to your goals.

ULIPs are insurance-cum-investment product that offer choice of diversification. Which means you can choose your own fund: Growth, Equity, Balanced, Income, etc. as per your risk appetite or change in goal.

The premium paid by you is invested in these funds and the performance thus depends on the stock market. It's ideal for those who do not mind taking exposure in equity and yet want to have an insurance product in the portfolio.

ULIPs have an option of switching funds during the term. Here, monitoring the allocation isn't complicated. Since you do not have to keep a track of companies who invest in your fund. Just buy the policy and run it till maturity. You can change allocations in line with the performance of each of the funds chosen, that too free of cost. So you can change the fund allocation without the need to time the market.

ULIPs are a much attractive product now than what they were few years back. Costs like premium allocation charges, administration charges, fund management charges and surrender charges made it an expensive affair. In the recent years, some low-cost ULIPs have been launched where over a long investment horizon the costs might be comparable or even slightly lower than mutual funds.



SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

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