What is the Difference Between ULIP and Traditional Insurance Plan?

Below are some effective tips that can help you in selecting the most appropriate life insurance plan:

• Assess the coverage amount: Purchasing a policy that can provide substantial coverage to your nominee after your demise is imperative. This ensures that they will not have to approach others for financial help.
• Check the policy tenure: The tenure of a policy varies notably with the type of insurance plan. Hence, it becomes vital to check its term to decide if it matures at the right time. This helps you avoid buying a second policy after its expiry.
• Determine your insurance goals: Before purchasing a policy, you should determine your expectations from an insurance plan. Accordingly, you can select the appropriate plan to help fulfil your financial goals earlier.
• Go for a reputable insurer: Before finalising an insurer, it is important that you go through their market reputation. Also, determine their solvency ratio and claim settlement ratio to ensure that your nominee gets the money instantly on raising a claim.
• Check terms and conditions: The inclusions and exclusions of a policy vary notably with one another. Hence, thoroughly review them before purchasing to ensure that it offers coverage against all possible situations.

Pro tip: Consider buying life insurance at an earlier stage of your life for affordable premiums. This can help you save more and get extended coverage. Also, you can claim tax benefits to increase your returns from the policy.

Now that you have an idea about the difference between ULIP and a traditional plan, it will become easier to make a prudent decision regarding your investments. Moreover, you should also carefully study the plans beforehand to ensure that you make the best judgement about your finances.