India’s millennials and Gen Z are redefining personal finance.
In contrast to earlier generations that focused on fixed deposits or gold, this generation of young investors is seeking hybrid financial products that balance long-term wealth creation with financial protection. One such product that is catching up quickly is the ULIP — or Unit Linked Insurance Plan.
A ULIP has the ideal combination of insurance and investment, of interest to a generation that prefers openness, adaptability, and tax effectiveness. In this weblog, we discuss why ULIPs are fast emerging as a first-choice option for India’s new-generation investors.
Top Reasons Why Young Indians Prefer ULIPs
1. Dual Benefit: Insurance + Investment
ULIPs stand out because they provide life insurance protection in addition to investment in equity, debt, or balanced funds — all in one plan. This twin structure is attractive to young professionals who might not yet have different insurance and investment plans.
2. Flexible Fund Choices
ULIPs enable the policyholder to decide how their premiums are invested, based on their financial goals and risk appetite. One can, in the long run, switch between funds (equity to debt and vice versa), hence a dynamic option for market-conscious investors.
3. Wealth Creation Over the Long Term
With an average lock-in period of 5 years, ULIPs promote disciplined long-term investment. In 10–15 years, ULIPs can create good returns, particularly when invested in equity-oriented funds. This makes ULIPs a perfect choice for planning the purchase of a home, setting up a business, or funding a child’s education.
Features That Attract Millennials and Gen Z
1. Digital Access and Transparency
Present-day ULIP platforms provide total digital access — from payments of premiums to tracking of fund performance. Charges, fund NAVs, and policy information are all totally transparent, which generates confidence among young users.
2. Tax Benefits Under Section 80C and 10(10D)
ULIPs provide tax deductions on premiums under Section 80C, and the proceeds at maturity are tax-free under Section 10(10D), subject to the current tax laws. This makes them particularly appealing to salaried professionals looking to maximise their tax savings.
3. Low-Cost Entry Point
Unlike people’s general belief, ULIPs do not demand huge investments. Most plans now accommodate premiums of ₹1,000–₹2,000 per month — making them affordable even for those in the initial stages of their careers.
Real-Life Relevance: An Example
Consider the case of Rhea, a 28-year-old marketing executive from Bengaluru. She commenced a ULIP with a monthly premium of ₹3,000, opting for a balanced fund option. During the period of 10 years, not only did she build a reasonable corpus, but she also had peace of mind knowing her policy had the cover of life. ULIPs enabled her to build wealth while remaining insured — a win-win towards long-term financial well-being.
Conclusion: ULIPs Suit the Contemporary Indian Thought Process
Young Indians today desire their money to work smarter — and not harder. They aspire for returns, flexibility, and tranquility of mind, all packaged in one scheme. A ULIP provides exactly that, with protection and portfolio increase coming in a tax-efficient package. With increasing awareness, ULIPs are no longer perceived as complicated — but as smart, goal-oriented instruments for the financially conscious.
For Gen Z and millennials in India, the query is no longer “Should I invest?” but “What can get me the best of both worlds?” And ULIPs are responding to that call.
Meet Suhas Harshe, a financial advisor committed to assisting people and businesses in confidently understanding and managing the complexities of the financial world. Suhas has shared his knowledge on various topics like business, investment strategies, optimizing taxes, and promoting financial well-being through articles in InvestmentDose.com
