What are life goals? A simple definition would be wanting to accomplish or achieve things at different stages of your life. For example, wanting to own a home by the age of 35 is a life goal. Or starting up your own business by the age of 40 is a life goal. Life goals can be anything for anyone. However, to accomplish these goals, you need to have sufficient capital.
One way you can ensure to have enough financing for your life goals is by investing. A ULIP is a plan that has become quite popular recently, and it can help you in achieving your life goals. How can investing in this plan help you with your life goals? Read more to find out.
Unit-linked insurance plan: What is it?
Before you invest in this plan, first ask yourself this: what is ULIP? It is a type of life insurance policy that provides you with dual benefits in a single policy: Investment and Insurance. A part of your premium is used for the investment component. For investment, you have the option of investing in equity, debt, and balanced funds. Where your money is invested is based on your requirements and risk appetite.
The premium is also used for the insurance component. In this plan, your loved ones are provided with life insurance coverage. In the event of your unfortunate demise during the plan’s term, your family would be compensated with a death benefit. Similarly, once the plan matures, the maturity benefits will be given to your family.
How ULIPs help with life goals?
Listed below are a few ways how a ULIP can help you accomplish your life goals:
Secures the future of your dependents
As a sole earning member of your family, they are reliant on your income for most of the expenses incurred. If something unfortunate happens to you, they might be more susceptible to financial instability. However, if you have invested in ULIPs, that might not be the case. In ULIPs, your family gets life insurance coverage. Under this cover, they get financial compensation in the form of a death benefit. The amount is decided by the insurer when you invest in the plan. Once they receive the death benefit, they can use it to manage the daily cost of living in your absence. They can also use it to fulfill goals in the future.
Helps in managing loans/debts
Suppose you recently bought a car with the help of a car loan. The loan will be repaid in monthly installments, which will be deducted from your income. While you may plan your expenses around the repayment, facing a sudden emergency may cause you problems with the repayment. In such situations, ULIPs can come handy. In ULIPs, you have the provision to make partial withdrawals from your funds. This provision is especially handy if you have multiple expenses to take care of at the same time. Partial withdrawals ensure that your income is not stretched too thin.
You get tax benefits
One of the main reasons to invest in ULIPs is the tax benefits you get to enjoy with it. As per the new tax regime, under Section 10(10D) of the Income Tax Act, annual premium payments of up to Rs.2.5 Lakhs are eligible for a tax deduction as per the changes in the new tax regime. This benefit applies to ULIPs purchased on or after 1st February 2021. As per the old tax regime, if you have purchased your policy before 1st March 2012, premium payments of up to Rs.1.5 Lakhs are eligible for tax deduction under Section 80C of the Indian Income Tax Act. Additionally, the maturity benefit under the policy is tax-free under Section 10(10D) of the Income Tax Act. 
If you are looking for a plan with which you can secure the future of your loved ones in your absence, you should consider investing in ULIPs. You can use the ULIP calculator before you invest in the plan.