3 Things ULIP and Makar Sankranti Have in Common

Makar Sankranti is one of the most prominent festivals of India that is celebrated during mid-January with different customs in different states. This is the day on which people worship the sun god who makes transit into Makara Rashi/Zodiac. It is the harvest festival that is celebrated to mark the end of winter and the beginning of the new harvest season.  While in Karnataka, Maharashtra, and Telangana, this auspicious festival is named ‘Makara Sankranti’, Tamil Nadu celebrates this as ‘Pongal’, Kerala as ‘Makara Vilakku’, Gujarat celebrates ‘Uttarayan’ and ‘Maghi’ in Punjab, etc. 

India’s rich culture and festivities teach you important life lessons which can also be applied in your financial journey to succeed and prosper. There is a meaning to every tradition and custom in India. If you understand the significance of the festivals like Makar Sankranti, you can relate it to your investments, financial products, and life in general. Do you know one of the popular long-term investment products, ULIP (unit-linked investment plan), has similarities with the festival Makar Sankranti? Let us know more about ULIP and Makar Sankranti in detail to understand what is common between this product and the festival. 

What is ULIP Plan?

Unit-linked investment plans, or ULIPs, are the popular hybrid investment products offered by life insurance companies. ULIPs offer the triple benefit of life cover (financial protection), market-linked returns on your investment (for wealth creation), and the benefit of taxation under Section 80C of the Income Tax Act, 19611.

Regulated by the Insurance Regulatory and Development Authority of India (IRDAI), ULIPs offer transparency to investors. ULIPs are designed for the long-term and tailor-made for your goals, along with offering a lot of flexibility to the investor. ULIP comes with many unique features, such as market-linked returns, life cover, tax benefits, transparency, payout flexibility, switch, partial withdrawal, etc. 

Now, let us see how ULIP is related to the festival Makar Sankranti point by point:

  1. Wealth Creation (Prosperity)

Makar Sankranti is considered the day of prosperity and happiness. As farmers celebrate the festival by worshipping the sun god and mother nature for all the things that they have grown throughout the year, then pray and plan for the new harvesting season hoping for prosperity. Similarly, ULIP is also designed to make your financial future prosperous by investing regularly in a disciplined way as needed for your future goals. 2

On the day of Makar Sankranti, various unique dishes are made, such as Pongal/kichadi, made from rice, lentils, fresh vegetables, etc., which are considered the healthiest and smooth on the stomach. One more such unique preparation of Makar Sankranti is sesame seed laddu made of jaggery and sesame seeds.

Like these unique dishes that are a mix of many things, ULIP also has fund options that invest your money in various assets like equity, debt, real estate, etc., to bring you the best result and create significant wealth for you in the future based on your suitability. ULIPs can be tailored to your need and objectives. You have the flexibility to choose the funds and allocate them based on your life phases, goals, and risk appetite. Capital appreciation through market-linked returns is one of the major features of ULIP.

  1. Benefit from Market Movement (can be related to the Sun’s change of direction)

Makar Sankranti is also the day on which the sun changes its direction, and its northward movement begins with the longer days ahead. That is why the festival is also called ‘Uttarayan’, and the change of direction or movement is celebrated by flying kites. Similarly, ULIP is one such product linked to the market, and you can benefit from market movements over the long term. ULIP also gives you the flexibility to make switches from one fund option to another depending on your requirement and market movements. 

  1. Protection 

The essence of the Makar Sankranti festival is spreading joy, harmony, and peace. The farmers celebrate the festival by worshipping lord Surya for providing abundant sunlight to their farmland to grow all crops.

As the sun god gives provides safety and protection to the farmers, ULIP also provides you with life protection. The insurance coverage provided by the ULIP plan helps your family in the time of an unfortunate event during the policy period.

In case the policyholder dies during the policy period, the predefined sum assured would be paid to the beneficiary. This can help the family to deal with the financial consequences and can provide them with financial stability

To sum up, just as we celebrate the harvest festival Makar Sankranti with faith and hope, investing in ULIP by choosing the suitable fund type and making use of all the flexibility that the product offers can help you build significant wealth for your long-term goals and experience a prosperous financial journey.