Tapping ULIP investment profit possibilities
Today, I am giving you an awareness section about tapping maximum
profit from ULIP investment that one can make as an investment
instrument and also a tax saving instrument.
ULIP is double edged sword equipped with Insurance and investment vehicles. It will not only provide you the opportunity to get equity investment exposure but also, cover you from life incidents using insurance.
Good to hear. But there is a trap in this. Some ULIP provide insurance cover like this: 1 year premium x 30 times. If a person taking a policy with 50k per annually, his insurance cover will be 50k x 30 = 1500000/- Did you ever think about the mortality charges side for this amount? Assume the mortality charge per 1000 per month is 0.083%, then it would be about 0.83 paisa per thousand. In a month it is 1240.50 and thus an year premium is 1240.50 x 12 = 14886/- for first year !!! An individual with 25 years old will get a clean cover of 30 lacs with this amount if he buys a term policy. Which is costlier?
This is one part. The solution for this is, before applying the ULIP, decide how much insurance cover you required and calculate the mortality charges for one year to get that cover. If the charge is more compare with a term policy, apply the ULIP policy with very minimum cover and take a term cover with less amount.
For example, you are planning to invest a premium of 50k per year and once you found the ULIP insurance is costlier because of heavy mortality charges, reduce your premium to 45k and take a term policy with 5k with a term same as this ULIP term. This will enable you to not lose more money as mortality charge as well as getting term cover for the ULIP term.
Secondly, you should be aware about the costs of ULIP’s compare with mutual funds, it is heavy. This is one reason investing in ULIP should have long term focus, more than 10 to 15 years. To regain the reducing amount from your premium as costs, you have best option using switching in proper time. Everybody might have heard about the switching option with ULIP but, how many people doing the switching between funds in proper time? Most probably 90% of the ULIP buyers are not doing any kind of switching in there whole investment period. It is a best option to add more money to your ULIP fund value by doing switching intelligently. To do this, you should have an eye on stock market trends. When the market is coming low level or bear phase, switch all your funds to aggressive funds where 80-100% equity exposure available. When the market is into the maximum peak or top of bull phase, immediately switch back these funds to debt funds. Do the practice throughout the policy term. Your fund value will be increased exceptionally at the end of policy term.
ULIP investment is not a children’s play. It is require intelligent action at proper time. Selecting a proper fund on the basis of cost, past and performance require lots of study and time. Invest intelligently. Each product has hidden loopholes to get profit using small changes intelligently. Finding the same require time and patience. So be a conscious investor.
Insurance: A Guide
"Remember kids, I have life insurance" - Adam Savage
This is a guest article from Tatyana Levin
These days one must be financially savvy. Money is not easy to come by and should be managed carefully. With the availability of tools that make it easy to keep track of current events, the stock market, and even your own money, it would be almost a crime to not utilize these tools to make the best and most informed financial decisions. Unfortunately, the more there is, the more there is to keep track of. This applies both to tracking tools and money (the small curse within the comfort of having money to keep track of).
The savvier ones of us dabble in investments, and the savviest make their living that way. The key is that they know what to invest in. Not magically, of course; investors do a significant amount of research to learn how to optimize their portfolios, but they have the understanding.
A grossly overlooked investment is insurance. This may be because is not typically referred to as an investment with the exception of whole life insurance that has a specific investment component within it. Webster’s defines the word “invest” as a commitment of money for a return and “insurance” as a guarantee. This makes insurance the safest type of investment, because your returns are guaranteed. But returns are not always financial in the case of insurance. They can be, if there is an unforeseen accident, but the most certain return is the feeling of security.
Now there are many different types of insurance, and what you need depends on your current situation. Obviously you only need auto insurance, found using auto insurance leads if you have a car, and you only need renter’s insurance if you rent and have possessions that you would need insured. Insurance is for those who have something to lose. With an attachment to something, either emotional of physical (or dependence, not like physically being glued to your car), comes the fear that it will be damaged or ruined in some way. For example, if your house caught on fire, you would be devastated. What would add insult to injury is not having a way to recover from this horrible disaster.
These types of examples are not unique to this article. That is the way that insurance is sold. As they say that clichés are clichés for a reason, insurance is promoted this way for a reason. The foundation of the concept of insurance is uncertainty, and it is the same uncertainty that is conjured up when investing.
The main difference between insurance and investment is that not having insurance creates a feeling of uncertainty while investments by nature are uncertain. Therefore, investing in insurance creates security and is the only secure investment that exists (and is legal). Getting insurance should be one of the easier financial tasks if you apply all the resources available with technological advances like smart phones.
About the Author: This article was written by Tatyana Levin, a copywriter for InsuranceFiles.com
ULIP is double edged sword equipped with Insurance and investment vehicles. It will not only provide you the opportunity to get equity investment exposure but also, cover you from life incidents using insurance.
Good to hear. But there is a trap in this. Some ULIP provide insurance cover like this: 1 year premium x 30 times. If a person taking a policy with 50k per annually, his insurance cover will be 50k x 30 = 1500000/- Did you ever think about the mortality charges side for this amount? Assume the mortality charge per 1000 per month is 0.083%, then it would be about 0.83 paisa per thousand. In a month it is 1240.50 and thus an year premium is 1240.50 x 12 = 14886/- for first year !!! An individual with 25 years old will get a clean cover of 30 lacs with this amount if he buys a term policy. Which is costlier?
This is one part. The solution for this is, before applying the ULIP, decide how much insurance cover you required and calculate the mortality charges for one year to get that cover. If the charge is more compare with a term policy, apply the ULIP policy with very minimum cover and take a term cover with less amount.
For example, you are planning to invest a premium of 50k per year and once you found the ULIP insurance is costlier because of heavy mortality charges, reduce your premium to 45k and take a term policy with 5k with a term same as this ULIP term. This will enable you to not lose more money as mortality charge as well as getting term cover for the ULIP term.
Secondly, you should be aware about the costs of ULIP’s compare with mutual funds, it is heavy. This is one reason investing in ULIP should have long term focus, more than 10 to 15 years. To regain the reducing amount from your premium as costs, you have best option using switching in proper time. Everybody might have heard about the switching option with ULIP but, how many people doing the switching between funds in proper time? Most probably 90% of the ULIP buyers are not doing any kind of switching in there whole investment period. It is a best option to add more money to your ULIP fund value by doing switching intelligently. To do this, you should have an eye on stock market trends. When the market is coming low level or bear phase, switch all your funds to aggressive funds where 80-100% equity exposure available. When the market is into the maximum peak or top of bull phase, immediately switch back these funds to debt funds. Do the practice throughout the policy term. Your fund value will be increased exceptionally at the end of policy term.
ULIP investment is not a children’s play. It is require intelligent action at proper time. Selecting a proper fund on the basis of cost, past and performance require lots of study and time. Invest intelligently. Each product has hidden loopholes to get profit using small changes intelligently. Finding the same require time and patience. So be a conscious investor.
Insurance: A Guide
"Remember kids, I have life insurance" - Adam Savage
This is a guest article from Tatyana Levin
These days one must be financially savvy. Money is not easy to come by and should be managed carefully. With the availability of tools that make it easy to keep track of current events, the stock market, and even your own money, it would be almost a crime to not utilize these tools to make the best and most informed financial decisions. Unfortunately, the more there is, the more there is to keep track of. This applies both to tracking tools and money (the small curse within the comfort of having money to keep track of).
The savvier ones of us dabble in investments, and the savviest make their living that way. The key is that they know what to invest in. Not magically, of course; investors do a significant amount of research to learn how to optimize their portfolios, but they have the understanding.
A grossly overlooked investment is insurance. This may be because is not typically referred to as an investment with the exception of whole life insurance that has a specific investment component within it. Webster’s defines the word “invest” as a commitment of money for a return and “insurance” as a guarantee. This makes insurance the safest type of investment, because your returns are guaranteed. But returns are not always financial in the case of insurance. They can be, if there is an unforeseen accident, but the most certain return is the feeling of security.
Now there are many different types of insurance, and what you need depends on your current situation. Obviously you only need auto insurance, found using auto insurance leads if you have a car, and you only need renter’s insurance if you rent and have possessions that you would need insured. Insurance is for those who have something to lose. With an attachment to something, either emotional of physical (or dependence, not like physically being glued to your car), comes the fear that it will be damaged or ruined in some way. For example, if your house caught on fire, you would be devastated. What would add insult to injury is not having a way to recover from this horrible disaster.
These types of examples are not unique to this article. That is the way that insurance is sold. As they say that clichés are clichés for a reason, insurance is promoted this way for a reason. The foundation of the concept of insurance is uncertainty, and it is the same uncertainty that is conjured up when investing.
The main difference between insurance and investment is that not having insurance creates a feeling of uncertainty while investments by nature are uncertain. Therefore, investing in insurance creates security and is the only secure investment that exists (and is legal). Getting insurance should be one of the easier financial tasks if you apply all the resources available with technological advances like smart phones.
About the Author: This article was written by Tatyana Levin, a copywriter for InsuranceFiles.com
