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  • 5 ways to get the best possible returns from your ULIP

    Published on April 15, 2019

    Are you dissatisfied with the returns that you’re currently receiving? Or are you switching for a plan with higher returns? Whatever the case is, we have a perfect answer to your need for substantial returns: Unit-Linked Insurance Plan (ULIP).

    Being a market-linked product, ULIPs comprehensively reduce the risks of your investments. This is because it offers you the flexibility to switch funds as well as provides you with multiple fund options. The key to earning higher returns is by understanding the past performance of your funds you’ll be investing in. Having said that, there are other ways to do so. Keep reading to find out more about the same:

    5 ways to get the best possible returns from your ULIP:

    1. Attain a balance between your debts and equities

    Investing in a ULIP Policy is a constant struggle between whether to invest in debts or equities. The best way to do so is by attaining a balance between the two and then investing in your preferred ULIP funds.

    However, choosing either debts or equities solely depends on your life stage needs. Read the next point to know more.

    1. Know at what stage would you need it

    Before investing in any type of fund, understanding your life stage that you’re in is very important. Knowing at what stage you need it will simply help to avoid any unwanted risk in your ULIP Plans.

    When you invest in ULIPs, be instinctive about the decisions you make. As you get older, see to it that you switch the type of funds you have invested in. If you have invested in funds with the higher risk factor, switch to a fund with the lower risk factor.

    1. Use the automated switching options to your benefit

    As an investor, we do understand that you can’t look after everything due to lack of time. If you come under that category, then invest in switching options which are programmed. These programmed switching options are available for every ULIP Plan, hence, you need not worry.

    For instance, an investor can decide to switch a fixed sum of money from one fund to another. This can be done on a monthly basis or on a fixed due date based on the request of an investor.

    1. Stay updated about the current economic scenario

    Every investor is bound to stay updated about the current market trends. Staying updated helps the investors to analyze all the market metrics as well as stock markets. This allows them to understand the current economic scenario with ease.

    There are times when the equity markets may look overpriced. What would you do then? In that case, switch from equity to debt funds and go back to it later once equity markets have corrected substantially.

    1. Utilize the ULIP charge structure

    Unlike mutual funds, ULIPs come with a diverse charge structure. The charges levied by ULIPs are Mortality rate charge, premium allocation charge, fund management charges, and policy charges.

    On the other hand, ULIPs today comes with zero allocation and policy charge which eventually acts as a saving factor. Additionally, these new age ULIPs provide an additional allocation that increases over time. During this time, your insurance company also invests with you which garners you with higher returns.

    First things first. Invest in the best ULIP Plan for yourself that will make you earn higher returns today!