These days, people want money that would last them a lifetime. With a fixed source of income, people try to earn enough to make more money off it. This means that they constantly look for investment opportunities that can help them generate wealth. One of the best options available today is unit-linked insurance plans. However, it is trickier to buy a ULIP than it is sounds.

Here is a guide on how you can choose the right ULIP:

Understand important features of ULIPs

ULIPs are an ingenious financial product that give your life coverage along with the chance to generate wealth. However, they can be more beneficial for you if you understand the product and its features. Here are few features you should be aware of:

• Fund switching

ULIPs allow you to change where your money is invested. This means you can change your ULIP funds if they are not perform well enough to your expectations. The option of fund switching allows you to move your money from equity to debt funds and vice versa.

• Premium redirection

You may start out in a tricky position with your ULIP. But you don’t need to stay in the same position always. You may have been investing in a fund regularly. But it is of no use if the fund isn’t performing well. The option of premium redirection allows you to invest your future premium payments in a different fund.

• Partial withdrawal

Your investment is essentially the money that a particular fund is holding as a part of itself while trying to grow. However, in the case of an emergency, you may need all the money that you can get your hands on. Since the investment in the fund is your money, you should be able to withdraw it. Hence, in the case of a financial emergency, you can withdraw a part of your money.

Consider your financial goals

ULIPs give you the chance to invest in equity funds, debt funds, and both in many cases. However, that does not mean you should invest blindly into each of them. Each of these types of funds have a unique way of generating returns. You have to select the one that works best for your financial goals. Hence, you should select a plan that fits well with your financial plan.

Equity funds offer the potential of high growth over a long period of time. On the other hand, debt funds preserve your wealth. The choice between the two types of funds is based on your investment capabilities and risk appetite. However, the factor that matters the most is what financial goals do you have and which option can do a better job of achieving them. If you feel confused in which option of the two you should choose, there is also a third option – Choose to invest in both funds according to your risk appetite and financial goals.

Choose the right life cover

ULIPs are often considered synonymous with investment. They are often looked at one of the best ways to achieve financial goals like paying for your child’s higher education, creating a corpus for retirement, buying a new house. However, what many forget is that a ULIP is an insurance policy at its core. Hence, the life coverage aspect of a plan should be paid special attention to while buying a policy. ULIP benefits include a lumpsum payout to the nominee in the case of the policyholder’s death. This payout can help secure your family for a long time. Hence, the amount set as sum assured should be enough for your family’s requirement.