Thursday, 31 January 2013

Faceoff between Myths and Reality of ULIP



Recently, on the game show “The Financial Wizard” (name changed), the participant was asked a question pertaining to Unit Linked Insurance Plans (ULIPs) – Do ULIPs allow debt investments? The participant had to choose between “Yes” or “No”. Being quite confident, without making use of any lifelines, he chose “No”. Do you think he was right or wrong? Well, he was wrong. Yes, you may be startled to know that ULIPs do allow debt investments…

Now, take a minute to think, why were you startled when you heard the correct answer? Well, the reason is that there are many myths surrounding ULIP plans, which have led to many viewing ULIPs with scepticism. This, despite the inherent benefits offered by these plans – a life cover + market linked returns. The market linked returns allow you to quicken the wealth creation process and the life cover ensures that in case of an untimely demise, dependents are financially secure.

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