Everyone aspires for happy and lavish lifestyle. We constantly strive to make some kind of investment to yield some good returns from the market. This investment can range from equities to debt and stocks to mutual funds etc. However, with the modern day efforts and market analysis, financial experts say one of the best ways to enhance your funds in systematic pattern is through the Investment Insurance Plans. These plans give policyholder the benefits of both the worlds, saving as well as methodical increase in the assets. Whether you want to fulfill your long-term goals or take care of your short- term responsibilities, investment insurances are suitable for both kinds of requirements. Thus, a policyholder is not only getting guaranteed returns but he or she is also suitably covered with insurance while running his or her race to earn sufficient money.
Types of Investment insurance Plans:
Unit Linked Investment Plans (ULIP):
ULIPs are a common type of investment plan where part of investment goes for insurance cover while the remaining portion is invested in various equity and debt schemes. These plans are suitable in fast building a large corpus. These investments are directly related to the performance of markets, because of which they offer comparatively higher but volatile returns. Considered to be flexible and transparent, these plans offer investors with capital guarantees.
Endowment plans are generally for people who donot wish to take financial risks. It presents investor with a life cover but with comparatively lower returns. These plans guarantee returns to the investors, mostly at the time of maturity.
Systematic Investment Plan (SIP):
A popular form of investment, in SIP a person invests in mutual fund schemes. Here the investor can withstand the volatility of an unpredictable market with the help of Net Asset Value (NAV) that defines the units one might own. Try giving post-dated cheques which will easily transfer money from savings account to mutual funds.
‘With Profit’ Plans:
In “With profit” plans the investments are done on a range of assets which in turn provide investors with good returns on their policies; usually in the form of bonuses. These guaranteed bonuses are declared on per annum basis.
Why Investment Insurance Plans?
Investment insurance plans help investors to build a large corpus over the long-term time frame. On maturity, bonuses are offered along with a guaranteed sum. The flexibility of the plans allows choosing a suitable policy period. These plans offer an opportunity to do goal-based savings. Besides, they can be utilized to tax benefits for investors under section 80C and 10(10D) of Income Tax Act. Consumers can also get a loan against such policies. This investment insurance serves as protection for investors and his/her family.
How to choose an Investment plan:
*First review your financial needs, risks taking capacities and the period till which you would like to invest. Decide a final goal and then choose a suitable investment plan
*Try to begin with small amount, which can be increased gradually.
*Go for both liquidity and fixed investments. This will allow you to use your investment in emergency as well as curb over-expenditure of the same.
*Ensure that your plan allows switching
*After investing, keep an annual reviewing portfolio
*Based on your suitability select a premium payment option
While choosing investment insurance plans one must not get into over-exposure of a single market instrument. It is advisable to evaluate all market options and invest accordingly. Always compare various investment plans because not every plan fulfils every investment goal you have. Evaluate every aspect of a plan and then make a purchase.