Attributed to Mr. Rakesh Goyal, Director, Probus Insurance Broker Limited
According to a latest UN report, India has the world’s largest youth population despite having the smaller population than China. India is also termed as “Young Country”, while half of the population is under 25 and two-thirds are under the age of 35 years. It is also projected that this population would probably reach to comprise almost 2/3rd of our total population by 2021. Also, India is likely to have the world’s largest workplace by 2027 with a billion of people between the age group of 15 to 64 years. Additionally, it is expected that by 2020, the average age in India will be 29 and it is set to become the world’s youngest country with 64% of its population in the working age group. These are the troops of people who believe living their lives by their own set of rules and highly passionate towards following their dreams. Therefore, when it comes to investment options for this young section of people, the insurance industry needs to roll up their sleeves and come with better options that can attract this millennial crowd. New Age ULIPs or Enter NULIP’s are also termed as 4G ULIPs. This ULIPs offer more flexibility than the traditional ULIPs and come at a comparatively lower cost. The premium allocation charges are least and the fund management goes from 1.35% for pure equity funds to 0.95% for debt funds. The other additional features include zero premium allocation and zero policy admin charge and the mortality cost of the life cover also gets covered on maturity. Now the important and most common question that lights the mind of these millennial is how to invest in a 4G ULIP. This investment plan is ideal for people in the age group between 25 to 45 years owing to its long-term investment. Adding cherry to the cake, this insurance is readily available online and be bought at just one click. In addition to this, there are two different ways of investing in a 4G ULIP plan. The first one is annual premiums and the second one is systematic investment plans. The 4G ULIPs works on the concept of rupee cost averaging which means that the cost at which you purchase the units of a fund are averaged. So in this case, the down the market is, the more units you should buy and if the market is up than the lesser unit one should buy. Whereas talking about the annual premiums, the only fallback with this premium is that one might not be able to take advantage when the market is low as the payment done would be a lump sum amount. Also, for the one who cannot invest a lump sum amount, he or she has an option of going with the monthly premium payment mode wherein the market fluctuations would be averaged out. The 4G ULIPs plans are considered to be one of the optimum investment options in the current market scenarios because ULIPs features options wherein investors can switch between equities and debt irrespective of the SIP or Annual Premium. This shifting can be done even during the first 5 years of compulsory lock-in and you are recommended to utilize these benefits for your advantage by switching funds on the basis of the market status.