How to handle your Ulips investment in volatile markets

If you an Ulip investor and not worried about choppy markets, you are not alone. In fact, according to a report published in the Economic Times today, many Ulip investors do not bother to check the performance of their scheme. It is understandable, only if you are invested for long term, say about 20 years. In such a scenario, short-term market fluctuations need not bother you.

[caption id=“attachment_1069785” align=“alignleft” width=“380”]  Most Ulip investors are not worried about choppy markets.[/caption]

But, you should know that you do have an option to change your asset allocation, if you want to. All you need to do is use the switch option provided by the insurer, and move your funds within the options your fund provides, various proportions of and equity - fully equity, fully debt or a combination of both.

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But, keep in mind that some companies offer unlimited switches while others usually provide a fixed number of free switches. For more you will have to pay extra for switching. If you don’t want the hassle to do the switching yourself, you could also choose the auto rebalancing option where a fund manager will do the rebalancing for you.

But the real question to ask is should you switch or when is the right time to switch?

You should switch either to rebalance your portfolio to ensure that the right kind of asset allocation is maintained. Or, when your financial goal is nearing, having an equity heavy portfolio could be riskier. There are certain circumstance when you should simply not switch. To know more about that, read the full ET report here.