Last Updated on August 22, 2019 by Gopal Gidwani
Goal-based investing is a contemporary approach of wealth management. With proper goal planning, one can easily achieve their life goals. There are various goals, such as buying a dream house, saving for early retirement and planning your children’s education abroad. It is a systematic approach and helps you manage your investment in the best possible way.
Given below is a list of 6 reasons why goal-based investing has an edge over random investment techniques and how you can achieve financial security through ULIP plans.
- Takes care of your savings
Due to goal-based investing, you learn to plan your goals and develop a practical approach to fulfil it. If you channelize your goals in the correct direction, you tend to align your savings accurately. Goal-based investing helps you to calculate the required amount of money to accomplish your future goals. Additionally, it also generates the habit of savings in you. Once you’ve decided on your goals and know the amount of money you’ll require to fulfil them, invest in a goal-based ULIP. A good ULIP calculator will determine how much you’ll need to invest now in order to fulfil your life goals later.
- Fetches more returns
You can achieve more returns based on how accurate your life goals are and how much in advance you start saving money to meet those. ULIP investments make use of the power of compounding principle, where your returns get added back to the principal fund value. These compounding returns will help you beat inflation. Also, it increases your purchasing power over time.
- Avoids the cycle of debt
While investing in a goal-based ULIP, you need to plan towards your life goals while keeping your day-to-day spending habits in mind. It plays a vital role in securing your financial stability in the future. Additionally, goal-based investing can make you a little less vulnerable to debts and improves the spending habits you have.
- Inculcates positive saving behaviour
ULIP is a goal-based investment tool which helps you to meet your financial goals. It comes with a lock-in period of five years, during which you cannot withdraw your money. This inculcates a positive savings habit in the policyholder. They are not tempted to withdraw early as it may result in a loss of substantial future returns.
- Flexible investment options
You can choose from the multiple funds option provided by the ULIP insurance policy. The policyholder can choose from equity funds, debt funds, and balanced funds based on their risk appetite. While a high risk-bearer can opt for equity funds, the risk-averse investors can invest in debt funds. The balanced funds are a combination of equity funds as well as debt funds. Moreover, you can select the sum assured value and the tenure of premium as per your requirements.
- Tax benefits
The premiums paid towards a ULIP insurance is eligible for tax-deduction. The premium is deductible up to Rs. 1,50,000 on taxable income under Section 80C of the Income Tax Act, 1961. As per Section 10(10D), the amount received on death / maturity is exempt from tax.
It is easy to avail a ULIP plan and save for your bright future. However, opt for a credible insurance provider before purchasing a ULIP Plan. Several insurance companies offer easy online claim process, as well. For a hassle-free and quick process, opt for an online ULIP plan. That way, you’ll be only one click away from obtaining all your life goals.