ULIP plans have several advantages for older age people. They can invest their saving to gain higher returns and enjoy tax benefits. Let us check out how ULIPs can benefit Senior Citizens.
ULIP plans are a combination of insurance and investment plans. The policyholder can get dual advantage of insurance coverage and higher returns on their savings. Senior Citizens can invest in different avenues from debt, equity or a balance of both depending upon the risk appetite. One can also choose their funds as per the requirements.
ULIPs Provide Life Insurance Cover:
One of the biggest reasons for opting ULIP is that it provides life coverage for the policyholder. The sum received after the death of the insured can be used by the dependents to support their finances.
Income Tax Benefits of ULIPs:
ULIPs also have income tax benefits, on the premium paid towards this plan. Policyholders can claim tax deductions under Section 80C on the premiums paid towards the ULIP plan in a year. Also, the maturity amount is tax-exempt under Section 10 (10D). Tax benefits are also available if the policyholder switches between the funds to get high returns.
ULIP Plans Are Flexible:
ULIP plans allow investors to switch between funds from time to time. Investors can even outperform the markets by switching funds and thereby earn significantly high returns. The companies allow several free switches so that individuals can easily switch between funds to meet their financial goals.
Option for Partial Withdrawal:
Senior citizens may need money for any emergency that may arise, and to support this, ULIP plans have partial withdrawal option. All ULIP plans have a 5-year lock-in period and post which the investors can withdraw the amount to meet any financial emergency. As we are aware that during old age the biggest emergency is any health issue that may arise. With ULIPs one can easily pay these Medical expenses with the help of ULIPs.
High Return Potential:
ULIPs can provide higher returns if invested for long term. Based on the investors risk appetite the funds can be invested in different equity funds that generates higher returns but also has high risks. At times, the investors can also plan to invest partially in equity funds and debt funs to even out the risk and get decent returns. There are also hybrid funds available which provide a healthy mix of equity and debt funds. One can choose to invest in these funds if they wish to have high returns and guarantee their investment.
Therefore, ULIPs are a go to option for all senior citizens and they can choose to invest in this fund any day to earn higher returns and get coverage for the dependant at the time of crisis. Also, if required one can stay invested in the ULIPs for a longer duration beyond 5 years and reap the benefits of long-term investment.
