Saving your hard-earned money in a way that it yields good returns with time is a good habit. Although it is not easy for people to build this habit generally, investing in ULIPs helps you do that. Being a long-term insurance product, ULIPs can ensure you get good returns and achieve your financial goals in life. However, just like investing, monitoring your market investments asks for your time as well. It would help if you researched market trends, stock performance, and much else regularly.
Alongside this, it is crucial for you to spread the risks involved in investing in several different asset classes. Let’s say if you face loss in one asset class, you should have another asset class that makes a profit for you, thus balancing things out. Asset allocation ensures that the risk of your investments stays low, and it is easier to allocate funds between different classes in some of the best ULIP plans.
Here is how you can balance your investments in ULIPs like an expert:
Optimize the Allocated Assets
One cannot have a say in market volatility. However, after you have invested in ULIPs, you can make use of the premium redirection facility, which is commonly known as a switching option for ULIP funds. With this facility, you can balance your investments in debts and equities to your full advantage. It will help you achieve your end goals and create maximum wealth alongside.
Related to the ups and downs in the markets, you can think of moving a more significant proportion of your premium into debt funds while the markets are going up and into equities during the downtime. Generally, you can do as many times as you want during the tenure of your ULIP. However, this switching facility may vary from one plan to another.
Consider Your Needs at Different Life Stages
In old age, most of the people usually avoid making riskier investments. You may want to be more cautious about preventing higher-risk investments and choosing comparatively stable debt funds than equities. However, people forget to check their needs at various life stages while optimizing their funds in ULIP.
Your retirement plans, for example, calls for long term planning. For it, you can think of investing more into equities in the initial years of the ULIP investment plan and settle to the debt funds as the retirement age approaches. This way, the saved amount will come to you to ensure financial stability during your retirement. So, you are advised to consider your needs and financial goals while doing long-term investment planning.
Get Sound Financial Advice from Dedicated Fund Managers
It is good for almost everyone to invest in some of the best ULIP plans offered by the renowned insurers to get the collective benefits of life insurance and wealth creation. However, not everyone has the required know-how about fund movement and portfolio management. Neither people have much time to do that. In case you feel you are unable to balance out your returns, ask for help from the fund managers allocated to you by your insurer. On your behalf, you can ask them to monitor the fund movement as per market fluctuations. Similarly, you can use a semi-controlled switching option offered by some of the renowned insurers in India with ULIPs. It allows you to switch a certain fixed amount from one fund to another on a specific date every month.
Make A Long-Term Investment Always
The very idea of the five-year lock-in period of ULIP highlights the long-term orientation of this investment. It is where the power of compounding comes into the picture. Investing in ULIP funds for ten to fifteen years or more means that your money will keep on reinvesting to grow the principal amount as time passes.
Hence, you should invest in ULIP for longer terms to fulfill some specific financial goals and create wealth.