Fancy a visit to Switzerland? Or France? Or any other exotic international destination of your choice? While the thought of visiting your dream destination is exciting, you know it will be an expensive affair. Read this post to know how ULIP investment can help you save enough for this journey of a lifetime.
While most of us have a travel bug, visiting an international destination of our dreams would take more than just conventional saving. In the bid to fulfil our current financial commitments, we keep on postponing our travel plans and finally leave it for our retirement years.
But are you sure that you’d be able to visit your dream destination after retirement? Are you sure that you’d have enough money after retirement to fund this journey of a lifetime? It is difficult to guarantee anything, no matter how dedicatedly you save as much money as possible every month.
But what if there was an easier way to fund your international travel? Apart from helping you achieve life goals like international travel, what if you also received life cover with it? Sounds great, right? A Unit-Linked Insurance Plan, popularly known as ULIP, can make this a reality.
What is a Unit-Linked Insurance Plan?
ULIP is a type of life insurance product that comes with an investment component. The primary goal of these plans is to enable long-term wealth creation while also offering life cover. In simple words, the premium that you pay for a ULIP is divided into two parts- life insurance and investment fund.
A policyholder is free to select the investment fund of their choice based on his/her financial objectives, age, and risk appetite. Most insurers generally offer multiple fund options such as equity, debt, and diversified funds.
How Can a ULIP Help Fund Foreign Travel?
As mentioned above, a fixed part from the premium you pay for ULIP is invested in the fund of your choice. So, if you are in your 20s or 30s, when you can afford a riskier investment approach, the investment part of your premium can be invested in an aggressive equity fund offered by the insurer.
History suggests that equity investments could outperform all the other types of investment avenues in the longer run. So, a ULIP with a tenure of 15-20 years could help you generate adequate returns for funding your visit to your dream destination. Not to forget the fact that you will also have life cover just like a standard life insurance policy throughout your ULIP tenure.
Tax Benefit of Investing in ULIP
As ULIP is a type of life insurance product, it enjoys the same tax benefits under Section 80C and Section 80D of the IT Act. Premiums of up to Rs. 1.5 lakhs paid for ULIP in a financial year can be deducted from your taxable income to reduce your income tax liabilities.
Moreover, the returns on the maturity of the ULIP are also exempt from income tax under Section 10(10D) of the IT Act. So, apart from helping you get closer to your life objectives and offering life cover, ULIP is also a highly tax-efficient investment.
Visiting Your Dream Destination with ULIP Investment
While ULIP can help you get closer to your dream destination, it is essential to start investing in them as early in life as possible.
Time is of essence with ULIP, as your investments will need time to grow and deliver long-term results. So, investing in ULIP right from when you are in your 20s or 30s is highly recommended for achieving your objectives sooner in life.