As working professionals who are cognizant of all the blood, sweat, and tears that goes into every rupee we earn, the idea of market risks tends to turn us off. Sure, we all like the idea of investing our funds and watching them grow but the minute we hear this dreaded four letter word, the balloon pops. People who are generally averse to risks tend to prefer options that have next to none. For instance, when it comes to saving their money, many people prefer FDs or plain old bank deposits. For them, the lower pay off that comes with it is totally worth the lack of risk. Fair enough. However, what if we were to tell you about a high ROI policy type that also happens to be one of the safest options in the market?
We’re talking about ULIPs. Due to their vast flexibility, ULIPs can prove to be your safest high ROI bet. As an investor, you have greater control over your funds and where they are invested, when compared with most other investment options. This means that if you want, you can grow your funds and manage your portfolio yourself.
Here are some reasons why ULIPs are your safest high ROI bet:
1. You can switch your funds
When you invest in a ULIP, your funds are invested in a combination of financial avenues, mainly including equities and debts. As an investor, you can either choose the allocation of funds in these markets, or allow professionals to take over the same for you if you feel ill-equipped to make these decisions in an informed manner. If you are controlling the funds yourself, you can always switch them around as you see fit. Thus, if you notice your stocks taking a dip or foresee any risk in the stock market, you can always switch your funds to debt/liquid funds to prevent any losses. Once the issues in the stock market minimize, you can switch your funds back to make them grow faster. Sounds pretty convenient, doesn’t it?
2. You can invest as per your risk appetite
While most of us want to avoid risks altogether, it isn’t possible to do so as all investments come with a certain market risk. Depending on how quickly you want your funds to grow, and your risk appetite, you can invest your funds in avenues accordingly. Investing in equity can be riskier, but it can also help your funds grow faster. Investing in debts is far safer and can also give you a high ROI. The ideal way to go about it is to balance your portfolio with a mix of both.
ULIPs also offer flexibility in terms of the term period of the policy. With a minimum lock in period of 5 years, you can use ULIPs for plan necessary large scale expenses in the future and have a means of procuring the funds needed to back up your dreams. Whether you want to buy a house, send your child abroad for higher studies, or go on an exotic vacation somewhere, all your dreams are more possible when you have a reliable investment policy in place.