ULIPs vs crypto for investment: What should you go for?
The Hindu
ULIPs vs crypto for investment: What should you go for?
Accumulating wealth is the goal for most people but with a myriad of options available today, the choice only gets tougher. In this scenario, what is the best route? Will it yield the results you are looking for? These are pertinent questions that are likely to go round in your mind. Among the many investment channels that are popular, cryptocurriences are fast gaining popularity. Then there are insurance plans which also offer benefits of investment tools. While these may lack the glitz of crypto, they do come with some pertinent benefits. You can decide which investment tool is better suited to your needs once you understand the nature, benefits and risks of both.
So, let’s understand both insurance and cryptocurrencies from an investment perspective. United Linked Insurance Plans or ULIPs are a combination of investment and insurance products. These plans provide investors with the opportunity to grow their wealth through market-linked funds, alongside providing life insurance coverage.
On the other hand, cryptocurrencies are digital or virtual currencies that operate on blockchain technology. They are decentralised, borderless, and are considered an alternative medium of exchange and store of value.
It’s time to delve deeper into both these investments.
Regulation and security
When it comes to ULIPs, the biggest advantage is that they are regulated by the Insurance Regulatory and Development Authority (IRDA). This also means that consumers get guaranteed benefits at lower charges. The positives also extend to those who plan to exit early due to a significant reason. All in all, ULIPs are well-governed, protecting investor interests and providing a sense of security.
Cryptocurrencies, being decentralised, lack the regulatory framework and oversight that traditional financial instruments possess. This absence of regulation exposes investors to a higher level of risk, including market volatility, price manipulation, and security breaches.
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