How ULIPs can Help you Save for the Long Term

Save more moneyULIP stands for the unit linked insurance plan.  It is a tool generally considered to be great for the wealth creating. It is considered to be good for long terms due to the diversity that is offered in the funds. It is quite ideal for people who want to start at younger age so that they can have the equity advantage in the long run. also the guidelines issued by the New Insurance Regulatory and Development Authority of India, have made these ULIPs even more investor friendly as compared to the time when they were initially introduced.

There is several ways in which the ULIPs can save you from the long term plans. These are as follows-

Lock in period

They come with a five year lock in period which makes you habituated to indiscipline investing. This policy can be bight once and it helps because it is a long term plan. Also with the help of this, one can avail the tax benefits every year till the paying term of the premium ends. Also the lock in is calculated since the day the data policy is issued.  One can either choose to pay the premiums on a monthly basis or sometimes annually.

Potentially better return

Also the ULIPs give better returns as compared to any other insurance products. This is due to the equity advantage which is because the ULIPs invest the premium that is used by people in different assists and different funds. The tax savings are taken care of by the renewals. Also depending on the performance of the equity, the maturity amount varies for a given tenure.  And also the maturity amount may become at free in cases of tax efficiency.

Flexibility

ULIPs are considered to be very flexible.  One is allowed to switch between the funds during the term of the policy.  A person also gets to choose between equity, growth, balanced, income etc. they are also allowed to change the fund at any point of time.  Also here one deed not need to monitor the companies in which the funds are invested unlike the shares in which it is necessary to keep track of it.

Dual advantage

The ULIPs come with dual advantage. They provide unto INR 1.5 lakhs of tax advantage under the section 80 C of the income tax act 1961. And it also offers a minimum amount of sum that can be insured. Its value is equal to near about 10 times of the annual premium for all of those investors who are under the age of 45. And this is not the case with the term insurance plans.

Conclusion

Thus with so many advantages that are being offered by the ULIP, it can act as a great opportunity for the creation of wealth. With the ULIP become more investor friendly more and more people have been taking interest in this in the recent time.

How does Money Supply affect Interest Rates?

moneyEverybody wants to make profit in the market which deals a lot with the matter of money and even the shares and stocks. There is no doubt in that, the need is also to realize and make known to self that the money is a thing, which would keep changing and can never be constant in its behavior!

This behavior of money known by many, make them change the decisions and keep it with them.  Instead of investing their money somewhere, they choose to keep it safely in their locker. Some people ever ready to deal with risks are ready to take some decision, and bear the risk.

For all those, who are interested in investing money, this one is for you! The fact remains same, if the money is supplied in ample in the market, the interested remains lowered and hence many people afford to get loans making their dreams happening. The main twist comes when the money is not available and the need is still there!

In the current economy and even the ones, which have happened in the past, the current rate is made sure with the help of the graph turning out between the supply and demand of money in the market, the market value after a detailed research has been seen to be affected well by this process. The actions of the Federal Reserve and commercial banks affect the money’s value in the United States to a greater extent.

Interest rates are not only affected by the money’s supply and demand but also by the availability of the lender and the investor! This kind of risk is called the risk premium.

Assume an investor has abundance present cash and he will loan or contribute the additional money throughout the following two years. There are two conceivable offers for his present cash—one offering a 5% financing cost and the other offering a 6% loan fee.

It’s not promptly clear which he should pick since he has to know the probability that he’ll be paid back. On the off chance that the 6% appears to be more harmful in terms of return than the 5%, he may pick the lower rate or ask the 6% purchaser to raise his rate to a premium equivalent with the accepted risk

It truly depends on the category and the year in which the cash is flowing along with the change in the years as well.

No doubt, there is a fluctuation in the market and the demand of money there would sure be a great deal of risk and a lot of decision making abilities required to know when to invest in the market.

The fluctuating behavior of cash is no doubt making some of the meagre investors as well as lenders experience a big blow on their projects as well as business but this would surely be the cases of few months or even a year! As mentioned above the behavior of money keeps changing and it could never remain same!