I want to invest Rs 30,000 annually in a unit-linked insurance plan (Ulip). How should I choose a good plan?
A Ulip would be good for you only if it fulfills your requirement and gives you the kind of return you want. Your risk appetite should be the deciding criterion in choosing the plan. For instance, if you have a high risk appetite, an aggressive investment option with a higher equity component is more suitable for you. Compare products offered by various insurance companies on parameters like expenses, premium payments, lock-in period, among others. Compare the Ulips’ performance: find out how the debt, equity and balanced schemes are performing. Also study the portfolios of various plans. Expenses are a major factor in Ulips, hence assess this parameter as well.
Ask about the top-up facility offered by Ulips. This option enables policyholders to increase premium amounts, providing an opportunity to gainfully invest any surplus funds available. Find out about the number of times you can make free switches (changes in the asset allocation of your Ulip account) from one investment plan to another. Some insurance companies offer multiple free switches every year while others do so only after a stipulated period. After assessing all these factors, you can make your choice.
A Ulip would be good for you only if it fulfills your requirement and gives you the kind of return you want. Your risk appetite should be the deciding criterion in choosing the plan. For instance, if you have a high risk appetite, an aggressive investment option with a higher equity component is more suitable for you. Compare products offered by various insurance companies on parameters like expenses, premium payments, lock-in period, among others. Compare the Ulips’ performance: find out how the debt, equity and balanced schemes are performing. Also study the portfolios of various plans. Expenses are a major factor in Ulips, hence assess this parameter as well.
Ask about the top-up facility offered by Ulips. This option enables policyholders to increase premium amounts, providing an opportunity to gainfully invest any surplus funds available. Find out about the number of times you can make free switches (changes in the asset allocation of your Ulip account) from one investment plan to another. Some insurance companies offer multiple free switches every year while others do so only after a stipulated period. After assessing all these factors, you can make your choice.
