It is very important or you to make a distinction between utilizing your life insurance for your investment needs as well. Many ULIPs give that offer of providing for your life cover and be able to re-invest for inflated returns.
This practice should be discontinued. ULIP do not guarantee the security of your principle amounts. If the markets are on a downside, the sum assured in case of any medical emergency of the policy holder, will be bound to be of a lesser value. In such situations getting into a loan of a credit card or personal loan etc are quite undesirable.
To not get into such risky situations, it is best if you take a term cover of an assumed value that you think can support your medical emergencies in future. And separately opt for investing your funds in SIPs or in MFs. With this approach both your medical needs and your financial needs are satisfied.
With the current performance of the MFs in the markets, investing in them can give you high returns. If you want to accumulate funds for your son’s education need of Rs50 lakh in 15 years, you need to invest Rs9, 910 in a portfolio that earns 12% annualized returns or Rs7, 390 in a portfolio that earns 15% annualized returns. Likewise, to achieve your retirement goal of accumulating Rs3 crore in 30 years, you need to invest Rs8, 500 in a portfolio that earns 12% annualized returns or Rs4, 290 in a portfolio that earns 15% annualized returns.
Take the advantage of the market scenario now, and earn better returns. Make sure you exit investing in ULIPs if you hold any and opt for a term cover as it can cater to you with all your medical needs.