Feb 16, 2009 03:20 PM
14371 Views
(Updated Jun 25, 2009 03:04 PM)
ULIP(Unit Linked Insurance Plan) is one of the forms of insurance plans. If we go category wise then term plan providing purely risk coverage is the right option.
Person looking for some benefit at the time of maturity along with risk coverage can look at endowment or money back plans as one of the options and people looking purely for wealth at the time of maturity can opt for either ULIPs or Mutual Funds.
The major difference between ULIPs and Mutual Funds is the charges deducted in ULIPs. There are ULIPs where the charges being deducted in the first year itself are very high and there are also ULIPs which help a person accumulate wealth over a period of time.
A person looking forward to buy a ULIP should go for a long term horizon so as to gain maximum benefit out of it and should also look at the Fund where premium amount is being allocated as Fund decides the return and performance of fund is a key measure of selecting the right ULIP.
There's one more category of ULIP wherein the amount at the time of maturity is guaranteed which ensures that the downside is packed and upside is kept open so that the Fund value can grow alongwith Market's performance. It is very essential that one should select the right ULIP investing into good funds and a good background.
