ULIP Returns in 5 Years

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    The linked insurance product do not offer any liquidity during the first five years of the contract. The policy holder will not be able to surrender/withdraw the monies invested in linked insurance products completely or partially till the end of the fifth year.

    Planning Your Financial Future with TATA AIA Life

    When thinking about the future, it is important to make the right financial decisions. TATA AIA Life's Unit Linked Insurance Plans (ULIPs) help you to save for your future and to ensure that your family is protected. This is where a 5-year ULIP can be quite beneficial to you as it offers both life insurance and investment. This plan is ideal for a person who wants to be financially secure and grow his or her wealth in the shortest time..

    IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

     

    What Does a 5-Year ULIP Policy Mean?

    A 5-year ULIP policy is a plan which encompasses two main objectives - insurance and investments. Some of the premium is used for life cover which protects your family. The remainder is invested in funds. It can be equity debt or balanced funds depending on your objectives.

    The 5-year period is crucial because this is the holding period. During this period,  you are unable to make withdrawals of your money. Hence, the investments that you make also grow without any hindrance. After five years, you can make a partial withdrawal of the funds or continue with the investment in order to accumulate more money.

    Another added advantage of investing in ULIPs is that it offers tax benefits under sections 80C and 10(10D) of the IT Act, thus making it all the more effective for planning your financial goals.

    So, How Does a 5-Year ULIP Work?


    Here’s how a ULIP works:

    • Premium Allocation - In this case, the premium is divided into two components where one offers life coverage while the other is invested in any of the funds that you choose.
    • Fund Selection - TATA AIA Life offers a range of funds, including equity for higher returns with more risk and debt for steady, low-risk growth.
    • Lock-In Period - A mandatory 5-year lock-in ensures you cannot withdraw funds prematurely, enabling disciplined investment growth.
    • Market-Linked Growth - The returns depend on the performance of the selected funds. You can switch funds during the policy term to align with market trends.
    • Maturity or Withdrawal Options - After 5 years, you can withdraw funds or remain invested, depending on your financial goals.

     

    Why Should You Pick This Policy?

    Opting for a ULIP policy with TATA AIA Life brings a host of benefits:

    Dual Benefits: Secure your family’s future with life insurance and grow your wealth simultaneously.

    Tax Efficiency: Avail tax benefits on premiums under Section 80C and tax-free maturity benefits under Section 10(10D).

    Customised Investments: Choose funds that match your financial goals and risk appetite.

    Disciplined Savings: The lock-in period fosters regular investments and financial discipline.

    Flexibility: Switch between funds during the policy term and adapt your portfolio to market changes.

    Real-Life Example

    Take the case of Rahul, a 35-year-old software professional. Rahul wanted to save for his children’s education while ensuring life cover for his family. He invested ₹12,000 monthly in ULIP policy, allocating funds between equity and balanced options. Over the lock-in period, his investment grew steadily, thanks to market-linked returns.

    After 5 years, Rahul had the flexibility to withdraw funds for his children’s school fees or stay invested for greater returns. Along the way, he also saved on taxes, making the policy a win-win solution.

    How are the Returns Calculated?

    The returns from your TATA AIA ULIP policy depend on several factors:

    • Fund Performance:

      Returns are influenced by the Net Asset Value (NAV) of the funds, which fluctuates with market trends.

    • Charges:

      Deductions for premium allocation, fund management, and administration affect the overall return rate.

    • Investment Allocation:

      The fund type (equity, debt, or balanced) you select plays a major role in determining returns.

    • Compounding Effect:

      The reinvestment of earnings during the 5-year period enhances wealth growth.

    • Policy Term:

      While 5 years is the lock-in period, staying invested longer often leads to higher returns.

    To get an estimate of your investment’s growth, you can use the ULIP Calculator on the TATA AIA website. Simply input details like premium, tenure, and chosen funds to project potential returns.

    Invest in TATA AIA Life ULIP Plans

    With our ULIPs, you’re not just investing in financial products - you’re building a secure and prosperous future. Whether you’re planning for milestones like your child’s education or aiming to grow your wealth, TATA AIA’s ULIPs provide the reliability, flexibility, and protection you need

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