Any seasoned investor knows the importance of long-term and short-term investment plans and which funds or schemes to choose. Now, if you are looking for a long-term investment plan, then one of your best bets is to put your money in ULIPs. Let’s outline a few ways by which it can be helpful to you.
Twin benefits of investment and insurance
Firstly, when you invest in Kotak e-Invest Plan, you get the twin benefits of investment and insurance. These are both crucial aspects of long-term financial planning. So, on a long-term basis, you get to secure the financial future of your loved ones. At the same time, you can save up a handsome amount to secure your retirement and even that of your dependents.
The power of compounding and wealth accumulation
ULIPs are all about the power of compounding – you keep reinvesting your returns to increase the wealth you accumulate consistently. This is also the reason why the earlier you invest in ULIPs, the better it is for you. After all, it will give you a longer time period to accumulate wealth. You can keep reinvesting the returns until it suits you and your financial needs. Just make sure to pay the required premiums right on time every month.
The option to customize your investment plans
What also makes ULIPs a good idea for long-term investment is the customization factor. You can select between equity and debt funds as per your risk appetite and shift between the two choices as per your needs. For instance, you can start young and go for the equity funds that are riskier but offer better returns. Gradually, you get married and have dependents. Then, you play it safe and lean more towards debt funds.
The tax exemption factor to invest in Kotak e-Invest Plan
ULIP plans have major tax benefits. In fact, the tax benefits you earn for these plans are one of the best among all the other investment options. Under section 80C of the Income Tax Act, your investment in the fund gets tax exemptions up to ₹1.5 lakh. Moreover, the returns get tax deductions. The insurance payout that your nominee receives is also exempted from tax. So, if you want to save up on taxes for a long-term period, then ULIPs will work for you.
Becoming more disciplined about savings and investments
It is important to be more disciplined about money management, which is a skill you should hold on to for life. Getting a ULIP at a young age would help you to do that. Your money is locked in for five years, and you keep paying the premium systematically to help your savings grow and learn to be a better money manager.
The bottom line
Though you should also invest in other investment instruments to reach your long-term financial plans, make sure you keep a ULIP in the mix as well. After all, it also gets you an insurance component with the investment.
Click here to know more about Kotak Life ULIP Plan: https://www.kotaklife.com/online-plans/ulip-plan