Saving monthly is an important part of managing finances, but as important is to keep that money safe and let it grow while it is being saved. Though there are a few other options for the same, insurance has come up as one of the best and rather popular investment alternatives.
It covers your life, besides providing Risk-free profits. Indian insurance companies, public as well as private players, offer various investment insurance options with reasonably priced premium.
Attractions of Investment Plans
- Risk Cover – Investment plans offer a guaranteed Risk Cover to the insured. So, if you survive the insurance term, you get back guaranteed returns and if something happens to you in between, your dependents get the sum assured.
- Consistent Returns – Investment plans are long Term plans that offer consistent returns. A part of the Maturity amount is guaranteed and bonuses announced from time to time are added to that.
- Secure – Whichever insurance company you may choose, your money is safe. Insurance companies and their policies are governed by IRDA and it is taken care that the interest of the investors is not jeopardized in manner.
- Peace of Mind – Risk cover, consistent growth, and secure investment, all put together, offer the peace of mind that no other investment option can provide. You donâ€™t have to worry about â€œwhat happens if something goes wrong with me. You get the feeling of having taken care of your responsibility whether you are around or not.
- Tax Sheltered – Being life insurance, investment plans are tax-sheltered. The Premium you pay is Deductible from income under section 80C. So, you save tax when you pay the premium of life insurance investment policy. Besides this, when the Policy matures or in case of a claim, the maturity amount or the Sum Assured is also non-taxable. This gives you the full benefit of your investment.
- Long Term Planning – They are ideal for Long term planning. More time you have to remain invested initially, more money you will have at the maturity. But if you have a final amount in your mind, the insurance company will calculate your premium for the duration you choose.
While with endowment insurance plans you get a lump sum on maturity, money back plans are good for life stage planning as you get the maturity benefit in parts at regular intervals. Insurance investment plans help identify important events and life stages and plan finances for them. Whatever your goal, you can find something that will fit your bill.
For traditional investment plans the returns are fixed and limited but safe and for market-linked investment plans (ULIPS) there is some investment risk involved and returns may vary as per the market condition. Yet, investing in savings insurance plans has become one of the most Favorited means of growing savings without any losses.