James W Founder and chief editor of makemoneyinlife.com Blogger, Tech Geek, and SEO person. I started this blog because I've been making money online since 2005,and now want to help everyone else start their online business and make money online from home. You can contact me at [email protected] or [email protected]

Term Insurance vs. ULIP; what are the Main Differences and which one should you choose?

1 min read

Deciding on a plan to buy can be hectic and demanding. With so many insurance companies out there offering different products, you must go through your options well.

Are you considering term insurance plans or ULIP (unit linked insurance plans)? You should broaden your knowledge and understand the differences between the two. Ulip offers the advantage of insurance and investment options. You can invest in bonds, market funds, equity and debts.

For more exclusive insights, read on.

Flexibility

A ulip plan proves to be more flexible compared to term insurance. You can make partial withdrawal as long as it doesn’t precede the intended amount. You can also transfer your investments from one fund to the other. On the other hand, term insurance is fixed. You can’t withdraw until the maturity period and there is no option of transferring your investments when you wish to.

Clarity

With no doubt, getting information concerning your finances is satisfying. When it comes to ulip, you can track your portfolio and get regular statements. Term insurance doesn’t give you this option since you cannot trace your portfolio.

Safety

Term Insurance has low risk returns, it is highly secured, and comes with promising returns. Ulip provides protection based on your investment option or your risk protection.

Level of Returns

Term insurance proves to have higher returns after the completion of the maturity period. You can also receive bonuses on top off the returns. Ulip has lower returns. Despite these, you can redeem your points and get bonus rewards for being a loyal client.

Why should you choose ULIP?

  • In case you want to plan for the future, this is a good plan to organize yourself and achieve your goals
  • Other than the insurance opportunity, you get the investment option.
  • This plan is flexible and suitable for you. Depending on your financial situations, your commitments, or your risk profile, you get to access suitable products for you.
  • When you want to invest a lot more than your regular premiums, you can comfortably do so.
  • You can also invest anytime, no matter your age.

The following are reasons to go for term insurance;

  • You protect your family from suffering in case of your demise.
  • Convenient as you get to pay the premium yearly
  • You reap higher returns compared to your investments after the maturity period.

It is imperative for you to consider the pros and the cons of the two before making any decision. Investing in a Ulip plan is more expensive. There are several fees to be paid such as allocation charge, policy administration, and fund management fee.

When you opt for term insurance, you should invest when you are around 25- to 35 years of age, in order to get maximum benefits.

Bottom Line

In conclusion, you need to choose a plan according to what pleases you. The ball is in your court and you need to roll it well.

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James W Founder and chief editor of makemoneyinlife.com Blogger, Tech Geek, and SEO person. I started this blog because I've been making money online since 2005,and now want to help everyone else start their online business and make money online from home. You can contact me at [email protected] or [email protected]

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