5 Parameters to Compare When Selecting the Best ULIP Plan

ULIP insurance products are unique in that they provide risk cover, while offering investment options to grow your wealth by putting a portion of your premium to work in the capital market. This is a combination of life coverage and investment under a single integrated plan. You have the freedom to manage both the investment portion, and the insurance portion of a ULIP plan based on your specific needs and choices. There are different types of ULIPs on the market that can help you to achieve your specific investment goals. While it requires careful consideration in choosing a plan, there are key parameters to compare when making a decision regarding which ULIP plan is best for you.

1. Premium Allocation Charges

Premium allocation charges related to ULIPs are deducted upfront as a certain percentage of the premium for certain initial expenses, including distributor fee, distributor fee, underwriting expenses as well as medical expenses, underwriting expenses and medical expenses. This is done at the time of the policy issuance. After the deduction of these charges, the remaining premium is invested in the funds of your choosing. It is important to compare premium allocation charges when choosing a ULIP plan, since the lower the premium allocation charge, the higher the premium investment amount. A plan that is not cost heavy will leave you with greater fund value.

2. Fund Options

The three basic ULIP funds offered by insurance companies are equity-based, debt-based and balanced funds, however, there are a variety of other options that align with your life insurance  needs and appetite for risk, including income, fixed-interest and bond funds, as well as cash funds. Depending on the market conditions, you have the flexibility to change your chosen investment funds. When comparing fund options, it is in your best interest to consider plans that have higher fund options.

3. Premium Payments and Alteration Flexibility

A policyholder may want a certain level of flexibility regarding how to pay their premiums. You may prefer to pay the premiums for the complete duration of your ULIP plan, or you may want to pay premiums on a term selection basis, for a predetermined period. ULIP plan can offer you the flexibility to make changes to your plan, such as a ‘sum assured alteration,’ partial withdrawals, top-ups and switching. A ‘sum assured alteration,’ for example, allows policyholders to increase or decrease their chosen sum assured. This way you can choose a plan that matches your needs, providing maximum benefits and limited restrictions.

4. Coverage

When selecting a ULIP plan that is best for you, it’s important for you to decide what a greater priority, investment or coverage. If you choose investment as the highest priority, then selecting a plan with the lowest sum assured will lower the mortality charges. ULIP plans also allow you to make both coverage and investment the focus, and a plan with coverage multiple would be a good option.

5. Fund Returns

ULIP plans by design are investment products and are attractive because of their return potential. You want your plan to grow, producing the highest returns from your chosen plan. Consider plans that have funds with consistent and steady performance, which can provide better returns in the long term and meet your investment goal.

Choosing the best ULIP plan for you requires assessing certain parameters, from premium allocation charges to fund returns. Keep in mind the structure of ULIP plans, along with the features and benefits offered when making a decision.

About Aegon Life

With a complete product suite of life insurance plans, superior technology, and customised service, Aegon Life Insurance Company Limited launched its pan-India operations in July 2008. As a joint venture between Aegon – world’s leading financial services and Bennett, Coleman & Company – India’s leading media house, Aegon Life Insurance adopts a local approach to facilitate customer interaction. Our vision to be the most recommended new age life insurance company has enabled us to leverage digital platforms that bring transparent solutions to customer needs. Our financial planning and investment solutions include term life insurance plans, pension plans, unit-linked insurance plans (ULIPs), health insurance plans, child education plans, and more.

Debt Arrangement Schemes…Are They Worth It?

The world is in $322 trillion of debt, and many are struggling to make ends meet each month. It’s a horrifying thought to owe someone or a company a lot of money but unfortunately, it’s now easier than ever to land yourself in debt. With buy now and pay later schemes and easily accepted finance options, it’s all too easy to say yes to purchasing something, and then later finding out that you don’t have the money. So how can you beat debt? Debt arrangement schemes are becoming increasingly popular all over the world, but many people are skeptical because of the ‘rogue’ companies that promise to give you the help you need but in fact, are simply after your money. So, are debt arrangement schemes worth it? Let’s take a look at what they can offer you and why we think they are the best solution for getting yourself out of debt.

First of all, knowing what not to look for in a debt relief company is essential for finding the right one for you. Rogue companies will often offer you a loan with very high interest rates. While taking out a loan to clear all your debt and then simply pay back that loan might seem like a good way out, it’s a very expensive way of doing so. Remember that debt consolidation companies won’t offer you loans or even try and make you take out money with them. Even though this method would clear your existing debts faster, it will create another one at the same time. Keep this in mind when searching for debt arrangement schemes and you’ll keep yourself safe from loan sharks.

The first thing that you need to know is what exactly debt arrangement schemes can offer you when you’re in over your head with debt:

  • Your monthly payments could be reduced to as little as £80 a month with National Debt Advice. This is because they spread your repayments over five years and make it so that your debts are easily manageable. They understand that you still need to survive and pay the rest of your bills as well as eat, so while five years might sound like a long time, it is the best option in the long run to prevent any more debt arising. 
  • They will take on management of dealing with the companies that you owe. This means that you will no longer receive demand letters or harassing phone calls. Imagine not having the stress and worry of simply answering the phone anymore? 
  • As mentioned earlier, the solution to your debt problems won’t come with taking out more loans. In the long run, this will improve your credit rating if you’re showing that you’re chipping away at your debt without having to turn to yet another loan. Once your debt is cleared, you’ll be surprised at how good your credit score is. If you’re interested in keeping an eye on your credit score, there’s a completely free app and service called clear score. It calculates what you’re doing wrong and how you can improve your credit rating.
  • Unlike a lot of debt plans, you won’t have to pay any upfront fees to begin the process of getting out of debt. Again ‘rogue’ companies may expect you to pay something upfront for their services. 
  • If after five years you’re still paying off your debts, more often than not your debt can be legally written off. Another reason why you’re offered a plan that’s so lengthy. 
  • Using debt arrangement schemes will often freeze the interest you’re paying on your debt too, so the figure you see is the figure you pay, with no hidden charges. 
  • You will no longer have to worry about your card being declined for essentials such as food and water, and you won’t have the embarrassment of having to ask friends and family for help with your money; gaining independence back with your financial status! 
  • Over all your experience with getting yourself out of debt will be made as easy as possible. No stress of creditors harassing you, and no worries of forgetting to pay one of your debts off because it’s all in one monthly payment rather than multiple payments.

As you can see, debt arrangement schemes are definitely worth looking into. While it might not be the solution for everyone in debt, they can certainly help you take a step in the right direction to becoming debt free. People often shy away from things that they aren’t sure on, and with big words like debt arrangement schemes, you can almost imagine all of the fine print and complicated jargon that will be thrown at you. The truth is, genuine companies like National Debt Advice are there to help you get out of debt, and avoid the unnecessary jargon or confusion. Consider a debt arrangement scheme to help get yourself out of debt!

5 Ways to Start a Savings Plan on a Paycheck-to-Paycheck Budget

If you’re living paycheck to paycheck, putting money into a savings account may seem like an impossible feat. When you’re barely scraping by, how can you afford to put money aside for a rainy day? It may not be the easiest to start a savings plan when living on a paycheck-to-paycheck budget but it’s not impossible.

By building a savings account, you can pay for unexpected expenses and even get out of debt. Here are five ways to save money, even if you don’t have much wiggle room in your budget.

1. Set Savings Goals

Before you can start putting money aside, take the time to create financial goals. Even if your goal is as simple as saving $20 a month, it’s better than having no goal at all. Other common financial goals include saving money towards retirement or even putting money into a short-term investment account. Check out sites like Get Out of Debt to find tons of financial tools that can help you plan a savings goal that not only attainable, but also beneficial to your long term goals.

By setting goals, you have something to work towards each month. Goal setting will keep you on track and make saving a possibility. Once you have goals, write them down or use a budgeting app that can track them for you. To make saving a routine part of your monthly budget, try to set new goals often. This way you always have an objective to reach.

2. Open a New Bank Account

Depending on your bank, you may have to put a certain amount of money into your savings account in order to keep it active. Since this can be impossible if you’re living paycheck-to-paycheck, you’ll want to find a bank that doesn’t have a minimum balance requirement. You’ll also want to look for a bank that doesn’t charge fees.

To make money on the money you save, look for a bank that offers a savings account with a decent interest rate. This way you’ll earn interest as you start saving money each month.

A great option for saving money is an online bank account. These accounts are more out of sight out of mind, meaning you’re less likely to withdraw the money you’ve saved because it isn’t as convenient as a traditional bank.

3. Reduce Your Expenses

Chances are you can make a little wiggle room in your budget by reducing your expenses. There are all sorts of ways to cut down on the amount of money you spend each month. For example, bundle home entertainment services so that you can pay for a cheaper package deal. Another option is to use less energy at home by opening the windows and minimizing hot water usage. As you become more energy efficient, your gas or electric bill is sure to decrease.

Other ways to reduce your expenses include:

  • Eating meals at home
  • Unplugging unused appliances
  • Using coupons when shopping
  • Using public transportation
  • Bundling insurance policies

By reducing your expenses, you will have money left over that you can put into a savings account. A hundred dollars or so each month can go a long way over time.

4. Make More Money

Making more money may sound like a tedious task, but in our digital world, it’s quite easy to give your monthly income a little boost. If you have a few hours to spare each day, there are many things you can consider doing to put more money in your wallet. Online you can become a freelancer, take surveys or even get paid to write product reviews.

You can also offer services like pet-sitting, babysitting, or even lawn care in your community. This is a great way to make money without having too big of an impact on your already busy schedule. Other options to consider include working a seasonal job or selling household items you no longer need.

As you make more money each month, you can put a set amount of cash into a savings account while also giving yourself a little wiggle room.

5. Minimize Spending

In a world of ever-growing gadgets and new clothing trends, it’s quite easy to spend more than we should. If you’re already living paycheck-to-paycheck, one of the worst things you could do is make your financial situation even worse by spending money you don’t have. While there’s plenty of temptation, no purchase feels as good as watching your savings account grow.

Be sure to remove yourself from company newsletters and mailings. The more marketing materials you’re exposed to, the more likely you are to make an impulse purchase.

Conclusion

Saving money isn’t easy, and it’s even harder when you’re living paycheck-to-paycheck. Using these five methods, you can take control of your finances. As you make saving a routine part of life, you’ll feel much more comfortable living on your budget.

If you have any helpful tips for saving money on a paycheck to paycheck budget, leave a comment and share your best advice in the section below.