The Indian stock market has been on a roller coaster ride in the past few months. The market has gone down several points and it is believed to be in volatile till the upcoming elections of 2019. Whether it is equity, debt or forex, investing in these tools have become quite risky. Since the stock market is extremely volatile, investors are looking for alternative investment opportunities. What can you suggest as an alternate avenue to your customer in these circumstances?
The answer is ULIPs.
Yes, you can suggest Unit Linked Insurance Plans to your customers under these circumstances! Here are the reasons which would help you reposition ULIPs in an all-new light–
Reason 1: Easy and tax-free switching
What happens when the equity market shows high volatility? Your customers like to direct their investments to secure investments, right? ULIPs give your customer the benefit of switching their investments from equity to debt and vice-versa. These switches are free of cost under many plans and can be done easily. What’s more, there is not even any tax implication on the fund which your customers choose to switch. So, ULIPs allow your customers to avail attractive market-returns and also hedge against volatile markets through tax-free switching facilities. A win-win combination, don’t you think? Do mutual funds allow such tax benefits when your customers switch their funds?
Reason 2: Market participation
ULIPs also invest in the capital market. When your customers choose ULIPs, they can continue to invest in the market albeit with additional benefits. Thus, ULIPs would let your customers enjoy the benefits of the stock market along with the options of protecting their returns in volatile situations.
Reason 3: Tax advantage
Up until 1st February 2018, equity mutual funds had a tax advantage. But the Union Budget of 2018 scrapped this advantage and made returns from equity investments taxable. However, ULIPs escaped this tax implication. Not only the investments made into ULIPs are tax-free under Section 80C, but the benefits yielded by the plan are also not taxable in your customers’ hands even if your customers invested in equity funds of the unit linked plans. This distinct tax advantage definitely swings the vote in favour of ULIPs, doesn’t it?
Reason 4: Insurance cover and other benefits
Let’s not forget what made ULIPs unique – a combination of market-linked returns and life insurance coverage. The insurance cover inbuilt in ULIPs definitely provides something extra for your customers. Moreover, other flexibilities like partial withdrawals, top-up facility, switching, etc. make ULIPs a flexible plan which your customers can choose to operate as per their investment strategies.
Reason 5: Reposition ULIPs and increase your business
While the above-mentioned points tell you how ULIPs have become more beneficial for your customers, its time you know how they have become more beneficial for you too. By repositioning ULIPs as the new avenue for your equity investors, you can also increase your sales volume. While the product would benefit your customers in the above-mentioned ways, it would also benefit you through increased earnings of your own. So, reap the benefit of the volatile stock market by selling ULIPs to your market-savvy investors. They would not only be able to get attractive returns, the volatility can also be hedged against by switching to debt funds as and when required. What more can your customers ask for?