ULIP is a combination of insurance and investment products. When you invest in a ULIP, part of your money goes towards life insurance coverage, while the rest is invested in funds like equity or debt. This helps in wealth creation while providing financial protection for your family. In this post, we will suggest the 5 best ULIP investment plans.
Here is the guide to learn about, ULIP vs Mutual fund before go for 5 best ULIP plans
Table of Contents
What Are ULIPs?
ULIP stands for Unit Linked Insurance Plans, which are basically an investment product that has a flavor of insurance. ULIP basically works like an insurance policy wherein a part of your premium paid will go for this insurance and the rest will be divided according to the choices made in the market funds like equity, debt, or a blend of these two. These twin benefits make ULIPs suitable for those who want to ensure their family’s financial security, while at the same time planning for long-term wealth creation.
Key Features of ULIPs
1. Dual Benefit of Insurance and Investment: ULIPs are attractive because policyholders can avail life insurance cover and invest in market-linked products to create a corpus for their family.
2. Flexibility in Fund Options: ULIPs offer various fund choices like equity funds, debt funds, and balanced funds. These funds can be exchanged by investors according to the risk tolerance and market conditions and sometimes without a cost implication.
3. Tax Benefits: Premiums towards the ULIPs are allowed under Section 80C of the Income Tax Act as tax deductions. In addition, the maturity proceeds can also be exempted from taxes provided it satisfies conditions as provided under Section 10(10D).
4. Partial Withdrawals: ULIPs give options to take out a portion of the invested money after the lock-in period of five years, to help in cases of emergency or achievements needs.
5. Transparency: ULIPs clearly disclose information about the charges they can incur, the performance of the funds they invest in and any other vital information, which makes it easier for the policyholder when evaluating their investment.
Top 5 Best ULIP Plans in India for 2024-2025
Here is the list of 5 Best ULIP Plans in India:
| ULIPs | Plan Name |
|---|---|
| 1. Tata AIA | Tata AIA Param Rakshak Pro (Equity) |
| 2. ICICI Prudential | ICICI Pru Signature ULIP |
| 3. Max Life | Max Life Momentum Index Funds |
| 4. HDFC Life | HDFC Life Sampoorn Nivesh |
| 5. LIC Endowment | LIC’s Single Premium Endowment Plan |
1. Tata AIA Param Rakshak Pro (Tata AIA ULIP)
Tata AIA ‘s Param Rakshak Pro is an insurance plan which would provide the dual benefits of financial protection as well as wealth creation. The ULIP plan level gives the policy holders an opportunity to choose a number of fund types according to risk tolerance. The option is also provided for such a replacement of the funds so that the plan would match aims and objectives of the investor as well as the market conditions prevailing at the time.
Key Features:
- Wide Range of Fund Options: While being high-risk equity instruments or safer and more conservative debt instruments of funds, something for everyone is provided by Tata AIA Param Rakshak Pro.
- Loyalty Additions: The policyholders continue to receive loyalty additions to the fund value, providing an increase in investment returns on the long-term policy.
- Flexibility: The plan gives an opportunity for partial withdrawals and also fund translation, which makes it flexible in terms of investing in most of your investments.
2. ICICI Pru Signature ULIP Plan ( ICICI Prudential Life Insurance ULIPs)
The ICICI Pru Signature ULIP plan is popular among investors because of an equally robust product design, along with the focus placed on the customer. It is an investment plan to ensure that both the family and the corpus are financially secured while the returns on investment come with the market risk.
Key Features:
- Zero Policy Administration Charges: This plan does not involve any policy administration fees hence allowing more of the money to be invested.
- Unlimited Fund Switches: The plan also has free movement from one fund to the other so you do not have to worry about extra charges on your portfolio.
- Wealth Boosters: Occasionally the plan contributes a portion of the fund value referred to as the wealth creators that help to increase overall returns of your investment.
3. Max Life Momentum Index Funds ( Max Life ULIPs)
Max Life Insurance presents ULIPs that are classified according to the needs and plans of every individual; We offer Money, Child education ULIPs and Retirement. Max Life ULIPs are famous for low expense ratio and high on customer satisfaction along with good fund performance.
Key Features:
- Automatic Fund Rebalancing: The plan comes with an option of rebalance which helps the system to bring back the investment portfolio to the appropriate risk level in accordance to the investor.
- Comprehensive Life Cover: In addition to investment benefits, Max LifeULIPs offer a sound life coverage, which would help your families financially.
- Top-up Facility: Max Life ULIPs provide the flexibility to enhance your sum required to be invested, which means you can augment the value of your fund in the event of your dispose over excess funds.
4. HDFC Life Sampoorn Nivesh (HDFC Life ULIPs)
HDFC Life is a popular insurance company and its HDFC Life Sampoorn Nivesh ULIP plans are in great demand in the market. HDFC Life ULIPs provide their clients with coverage along with investment planning and aim to achieve long-term goals. There are three types of ULIP funds in the HDFC Life Sampoorn Nivesh Plan: equity, debts and hybrid funds.
Let me tell you about the HDFC Life Sampoorn Nivesh ULIP plan. In this ULIP plan, if you invest an annual premium of Rs 1,20,000 for 12 years, you will get Rs 25 lakhs in death benefits. And after 20 years of policy, you will get approximately Rs 29,64,005 in maturity benefits. With the help of this HDFC Life ULIP plan, you can save money and also provide security to your family.
Key Features:
- Systematic Transfer Plan (STP): HDFC Life ULIPs are opened with an STP feature that enables the gradual switch of funds from debt to equity markets, thus reducing the impact of market fluctuations.
- Return of Mortality Charges: The plan allows you to receive back mortality charges so that at the end of the term of the policy, you are paid the amount you had been charged for life cover.
- Fund Performance: HDFC Life ULIPs present consistent and good fund return ratios, which assure the investors to build wealth for longer-term investment.
5. LIC’s Single Premium Endowment Plan (LIC Endowment Plus)
LIC Endowment Plus is a unit linked insurance plan (ULIP) offered by the Life Insurance Corporation of India that provides insurance coupled with investment. This plan is suitable for those investors who are in search of a promising investment tool that is backed by the leading insurance company in India.
Key Features:
- Guaranteed Additions: LIC Endowment Plus has guaranteed additions at normal times; this will increase your fund value.
- Switching Options: The plan also allows fund switching and can therefore be adjusted according to market trends.
- Simple and Transparent: LIC Endowment plus is extremely simple and clear-cut and is perfect for an initial investment in a ULIP.
Why Choose a ULIP?
ULIPs are unique retail products as they combine savings, protection and investment in the form of life insurance as well as market linked investment returns. They are perfect for those people who strive for lifetime financial objectives without compromising the financial provision of their close ones. Due to the portability of funds along with tax efficiency, ULIPs are a popular investment avenue.
How to Choose the Best ULIP Plan?
Selecting the suitable ULIP plan, one has to understand your financial goals, risk taking capacity, and time horizon. Here are some factors to consider:
1. Investment Objective: Decide whether you are aiming at building your wealth, saving for your child’s school fees, or saving for your retirement. Over time, select a ULIP that meets your specific needs.
2. Fund Options: Choose a ULIP that provides a variety of funds such as equity fund, debt fund and balanced fund. This means that you can invest according to your preferred level of risk that you are willing to take.
3. Charges: ULIPs attract different fees including; premium allocation fees, policy administration fees and fund management fees. It is advisable to compare such charges across the various plans to get the best deal for your money.
4. Flexibility: ULIPs with options like partial withdrawal, fund switching, and top up should be considered if possible. This enables you to have overall charge and control over your investments in case of changes in your financial situation.
5. Insurance Cover: Although the instrumental value is valuable, do not ignore the insurance factor. Make sure the ULIP gives you enough life cover to support your family’s future needs.
Conclusion
In conclusion, ULIPs give a perfect combination of insurance and investment; hence stands as the perfect solution for those planning to invest and get insured at the same time so as to take care of their families and future. Tata AIA Param Rakshak Pro, ICICI Pru Signature ULIP Plan, Max Life ULIPs, HDFC Life ULIPs, and LIC Endowment Plus are the 5 best ULIPs for 2024-2025 that cater to different financial goals and risk profiles.
There are several factors to be kept in mind while investing in ULIP, such as the purpose of investment, risk appetite and uniqueness of the plans. This way, it becomes easier to invest in a ULIP that not only secures your finances but also enables you to achieve specific financial goals in the future.