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Smartest investment and life plans in UAE
When faced with an emergency like a critical illness or the demise of an earning member of the family, having proper insurance in place provides essential aid. However, while insurance (whether health, term, vehicle or any other type) is necessary, one has to also manage the creation and improvement of personal wealth. With the ever-persistent inflation, a lack of investment can actually lead to an effective decrease in your wealth. To solve both the issues, i.e., insurance and investment, you can always turn to a Unit Linked Insurance Plan (ULIP).
Described below are the key aspects related to what is ULIP plan and how you can utilise ULIP investment to financially secure yourself.
A ULIP plan can be considered a combination of both investment and insurance. In these insurance plans, you pay a premium on a monthly or annual basis. A part of these ULIP premiums is used for life insurance coverage, while the other part goes towards investment. The latter part, i.e., the premium for ULIP investment, is utilised for investing in equities, debt, or hybrid funds (combining the previous two). Such a mixture of investment types leads to excellent returns in a secure way.
It should be noted that ULIP investment, however, is subject to market risks that are to be borne by the policyholder based on their investment portfolio.
ULIP insurance plan offers a number of advantages to policyholders compared to simple insurance or investment plans. These benefits are discussed here in detail.
All ULIP insurance plans are designed to increase the value of your investment along with providing insurance cover to provide financial aid in case of an emergency. While the ULIP policy plans in the UAE are not strictly categorised, they can be classified as per the following factors for practical purposes.
Under this ULIP plan, the policyholder makes payment while in service. The collected investment is then repaid in a lump sum or monthly payments to the policyholder after retirement.
This ULIP investment plan is specifically meant for wealth creation over a long period. It is usually recommended for young adults.
Child insurance ULIP plans are meant to take care of a child's financial requirements in case of the parents’ absence.
If the ULIP policy selected by an individual has term insurance, the benefits are provided to the family of the policyholder after the demise of the insured individual. However, it should be noted that the provision of benefits can differ as per the plan selected.
For instance, some ULIP insurance plans provide beneficiaries with an amount equal to fund value plus the sum assured. On the other hand, some plans may do otherwise in case of demise. Ultimately, as these aspects vary by plan, one should contact the provider and seek clarity regarding the same before initiating their ULIP policy plan.
It is usually considered that ULIP investment is best suited for individuals with long-term investment goals requiring insurance coverage. While beginning early with such plans is always beneficial, one can always make the start at any age provided they have not crossed the age limit for such plans.
As often said, proper investment can always prove helpful for fulfilling various financial goals and obligations. Anyone with a regular income and looking to secure their family’s future should have ULIP investment in the UAE.
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You can select the type of fund for your ULIP investment based on your risk appetite and return goals. You can either go for more returns (and risk) through equity funds, stay conservative through debt funds, or have a balanced approach through hybrid funds.
You can easily switch from one fund type to another in a ULIP policy. This allows you to modify and easily safeguard your investments from market fluctuations.
A key feature of the ULIP policy is the option to withdraw money after the expiry of the lock-in period. The number of withdrawals and the cap on the amount withdrawn, however, depends on your chosen plan.
Add-ons:
With changes in your financial goals, you may want to modify your investment portfolio. ULIP investment allows users to add top-up to their initial investment in the plan to fulfil the varying requirements.
With a ULIP insurance plan, you have the option of paying premiums at your convenience. With payment choices in the form of monthly, half-yearly, annually, or as a single payment, it is a flexible financial instrument.
One should take into consideration that not all plans in the UAE provide ULIP policy features under that name. Similarly, several plans may not provide all the benefits associated with ULIP plans in the UAE. However, these plans still make for an excellent choice regarding the goals of investment and insurance in the UAE.
With that in mind, here are some of the best ULIP investment plans in the UAE.
With numerous ULIP policy options available in the UAE, there is no specific plan that can be considered the best. The perfect plan for you depends considerably on your financial requirements and future planning. In that light, you can follow the given steps while choosing the best ULIP policy in the UAE:
Before deciding on any ULIP investment plan, identify your objective for making the specific investment and what is expected from the investment. Determine your key financial goals like children’s education, insurance, retirement, etc., as these will impact your investment in ULIP.
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Next, you should analyse the degree of risk you can manage at the existing stage in your life as per your earning and paying capability, current savings, and potential financial goals. If you can afford more risks for better returns, you can go with a ULIP insurance plan in the UAE that provides the opportunity to invest in equities for better returns.
Based on the investment timeline, you can choose an appropriate plan. For instance, you can select a ULIP investment plan for the long term if you are young. However, it should be noted that ULIP Policy plans are best suited for investors with a long-term investment horizon.
It is essential to compare the ULIP policy plans offered by the different insurance and investment companies in the UAE. This would help you evaluate the return on investment, applicable premium, etc., and make the best choice as per that information.
There are several fees and charges associated with ULIP policy plans in the UAE. Besides the fee applicable at the time of purchase, several ULIP charges can be levied later in the form of fund management charges for managing and investing your funds, partial withdrawal charges, and so on. One should verify all the charges with the policy provider before making a ULIP investment, as these can amount to a significant amount when accumulated over a prolonged time.
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Here are some key aspects to consider before selecting the best ULIP insurance plan as per your requirements.
To conclude, ULIP is a systematic investment-cum-insurance plan suitable for investors who are looking to fulfil long-term financial goals and improve their chances of earning higher returns. With several options related to ULIP insurance plan from the top providers available in the UAE, they are suitable for different age and salary groups.
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You can visit our website and explore several insurance plans regarding health, term life, vehicle, travel, and so on. In just one place, you will be able to explore some of the best ULIP policy plans in the UAE and get the one out of your choices in just a few clicks.
Before you leave and check the best ULIP investment plans in UAE, you can quickly go through the following information to know more about some key details related to ULIP insurance plans.
Net Asset Value (NAV) is a metric related to the price at which ULIP units in a fund are purchased. It is measured as the asset value per unit minus liabilities value per unit of an investment fund.
Yes, you can make part withdrawals from your ULIP policy after completion of the specified term as provided by your ULIP insurance plan provider. You can also go for early withdrawal in some cases, although a fee might be levied for that.
Yes, an investor can surrender their ULIP policy in the UAE after paying the charge applicable on such surrender.