It is widely suggested to plan for your long term goals and then link them to a tax saving investment.
The tax saving season for the financial year 2019-20 has just begun and now most taxpayers would be searching the right tax saver and may make an investment mistake in the process. Remember, tax saving should only be incidental to your investments, and rather should be linked to one of your long term goals.
Unit-linked insurance plan (Ulip), is one such tax saver which suit investors who do not have the financial discipline and inclination to keep investment and insurance separate, but yet need to save for their long term goals. Ulip, of all the investment options available, is one such product that can help meet all the long term goal through a single purchase itself. Because of its lock-in and longer horizon, Ulip instills investing habit in investors. Ulip is typically a combo of protection and savings. This makes Ulip a hybrid investment wherein several factors such as premium, duration of the plan, mortality, fund administration charges, allocation charges to name a few, interrelate and impact each other.
Some of the long-term goals could be buying/ arranging a down payment for a home loan, funding of children education, marriage, or planning for one’s own retirement. All of these are possible to meet through a single Ulip. A single ULIP can be used to meet multiple savings goals using features such as partial withdrawals, multiple fund options, premium payment, and policy term options. They can be effectively used for wealth creation, retirement or child education depending on your financial goals.
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