Such a dynamic financial landscape demands that you secure your family’s future. Life Insurance and ULIPs are some of the best ways to do so. Affordably priced, these financial instruments help with protection as well as wealth creation through savings and investments. One of the most valuable resources in your financial planning, it can now be managed more conveniently than ever before through digital tools, such as the HDFC Life Insurance App available on Google Play and Apple’s App Store.
Contents
- 1 What Is Life Insurance?
- 2 Types of Life Insurance Policies
- 3 What is a ULIP?
- 4 Key Features of ULIP
- 5 Benefits of Mixing Life Insurance and ULIPs
- 6 Manage ULIPs and Life Insurance with HDFC Life Insurance App
- 7 How does the HDFC Life Insurance App works?
- 8 Choosing the Right ULIP or Life Insurance Policy
- 9 Conclusion
What Is Life Insurance?
Life insurance is considered to be a contract between a policyholder and an insurer against which the latter party agrees to pay a certain sum of money referred to as the death benefit to the beneficiary at the death of the insured person. It makes sure that life insurance will leave behind a financially stable family even if you are no longer around to support them.
Types of Life Insurance Policies
Term Life Insurance: This is the most basic and cheapest form of life insurance. It is a plan that provides a payout to the beneficiary during a specified term, such as 10, 20, or 30 years.
Whole Life Insurance: This type of insurance covers the individual for a lifetime. It also contains the savings element where cash value is accumulated over time and could be used for borrowing money against or withdrawing.
Endowment Policies: Such policies incorporate both life cover and savings. If the policyholder survives the term of the policy, it matures with a lump sum payment. If they die during the term, the death benefit is paid to the beneficiary.
ULIPs: Single insurance cover and investment ULIPs are one of a kind wherein life cover and investment options are there. In that, whereas a part of the premium goes toward life insurance, another goes to the market-linked investment, including equities and debt funds.
What is a ULIP?
A Unit Linked Insurance Plan (ULIP) is a hybrid product offering life insurance and investment all in one. ULIPs allow you to grow your wealth at the same time while securing your family’s financial future.
Key Features of ULIP
Life Insurance Coverage: Similar to traditional life insurance, ULIPs offer a death benefit to your beneficiary in case you die within the tenure of the policy.
Investment Opportunities: The one great feature that ULIPs offer is the option to invest a part of your premium in an equity, debt, or hybrid fund.
Fund Switching: One of the salient advantages of ULIPs is known as fund switching. You can switch to any combination of different funds depending on your risk appetite and market conditions existing at the time.
Partial Withdrawal: ULIPs allow partial withdrawal after five years have passed in the lock-in period. This helps when one needs to have some liquidity for any emergencies or other major life events.
Long-Term Wealth Generation: ULIPs are generally long-term investing products. The longer the period, the greater the compounding in your favour. This makes it suitable for all those who have long-term plans.
Tax Benefits: The premium payments by the policyholder on ULIP are exempt under Section 80C of the Income Tax Act, to the extent of ₹ 1.5 lakh. Maturity proceeds can also be claimed as tax-free under Section 10(10D), subject to certain conditions.
Benefits of Mixing Life Insurance and ULIPs
Dual Benefit Protection-investment: While traditional life insurance products deliver purely financial protection to your family, ULIPs take it a step higher by offering an investment option which will enable you to increase your wealth even while reaping life cover benefits.
Flexibility in investments: Under ULIP plans, you get the ability to invest between the three funds-assured, equity, and debt-or the balanced fund. According to your appetite for risk and your financial goals.
Objective-Based Financial Planning: ULIPs enable you to channel your investments towards specific financial goals, be it toward saving for the child’s education or buying a home.
Transparency: ULIPs are transparent about the charges, fund performance and the total worth of investments. You can thus monitor the performance of your selected fund so that you can accordingly make decisions.
Manage ULIPs and Life Insurance with HDFC Life Insurance App
Taking an HDFC Life Insurance App has made ULIP management and life insurance policies extremely hassle-free. The application provides many features through which policy management, fund tracking, and premium payment processes can be carried out easily.
How does the HDFC Life Insurance App works?
Policy Purchase: You are able to browse through life insurance and ULIP options that are available. After comparing their features, it gives you the option to choose the one you prefer and purchase it online, thereby doing away with lengthy paperwork.
Fund Tracking and Switching: It tracks the actual performance of your ULIP funds, offering you a real-time picture of how your investments are growing.
Premium Payment and Reminders: With the app, you will be able to pay your premium online without any hitch. You have a range of payment choices and reminders about due dates.
Claims Assistance: Claims assistance that the app offers- Claim filing process and tracking process for the beneficiary in a very simplified manner.
Choosing the Right ULIP or Life Insurance Policy
Review your Financial Needs: Identify your savings goals-for example, saving for your children’s school fund, retirement fund, or to buy a home. Under such goals, define how much cover you need and for how long you need to invest.
Review your Tolerance towards Risks: ULIPs offer a range of funds from those with high risks in the form of equity funds to low-risk debt funds.
Compare Features of the Policy: Compare ULIP and life insurance plans through the HDFC Life Insurance App. Select the plan that facilitates an easier portfolio-switching process, more options in fund switching, and free add-ons like critical illness covers.
Check the Charges: ULIP charges include premium allocation fees, fund management fees, and policy administration charges. Know these charges and how they impact your returns collectively.
Conclusion
ULIPs, like Life Insurance, are the best wealth creation tools, as they can protect money and also invest it. Life insurance takes care of the family’s requirements in case you cannot save them anymore, whereas ULIPs give you a mechanism to grow your wealth over time with life cover. With options of shifting funds, tax benefits, and partial withdrawal options available, ULIPs present an even more interesting solution for long-term financial planning.
