How To Make Unit-Linked Insurance Plan Work For Your Long-Term Goals

Unit-linked insurance plan (Ulip) is a combo of insurance and investments to help one save for long term goals.

- Sanjeev Puri

If one is not in a position to keep investment and insurance separate, saving for long term goals through Ulips is a better way forward. Before buying ulips, make sure your goals are at least ten years away and you are aware of the way the Ulip works. Exiting from the Ulip plans mid-way before maturity may prove to be costly hence buy it once you are comfortable with its working, features, tax advantage, transparency and benefits.

In Ulips once you have fixed a specific tenure, the premiums need to be paid till maturity, unless you choose a limited premium payment period. Hence, saving through Ulips becomes a forced savings and requires payments each year for the policy to continue. Also, unlike in the past, now the majority of charges have become standardised and spread over the first five years of the policy.