Categorized | Investment Insurance

investment and insurance

Investment plans are a great way to save up for the future and ensure consistent availability of funds at times of needs. If you are about to take out an insurance, we recommend looking at ways in which you can turn it into a long Term investment for yourself and your family. Insurance plans can be a great way to make safe and reliable investments with high returns. While some ensure fixed returns with lower amounts of payback, others come with much higher returns at higher risks. In such a scenario, it is necessary to know the investment plans available to you and the investment returns they will provide.

MONEY BACK POLICY

Money back policies are the best investment plans to ensure constant investment returns at fixed intervals. The investment rates are fixed from the start and are not affected by the market conditions. It guarantees regular payouts at fixed intervals during the term and return the balance amount at Maturity with bonus. However, in case of untimely death of the insured, the entire sum Assured is paid irrespective of the payouts made over the period. The best aspect of a Money Back Policy is that you can time the investment returns to coincide with major life events.

ENDOWMENT PLANS

An Endowment Plan is simply an investment plan which pays out after a fixed term, typically 10, 15 or 20 years. If the Policyholder does not survive this term, then the Sum Assured is paid out at the time of death. An endowment plan can be cashed in at any time depending on the Surrender Value decided upon with the insurance company.

There are two types of endowment plans– traditional and unit-linked endowment plans. While a Traditional Plan offers fixed returns at predetermined investment rates, a unit linked endowment plan will further invest your money in the market. This means, investment returns will depend on market rates and performance of your investment. While traditional endowment plans offer lower investment returns, these are more reliable than unit linked endowment plan. On the other hand, if planned with caution and market knowledge unit linked endowment plan can offer very high investment returns.

THINGS TO REMEMBER

Understand your needs and choose the investment based insurance Policy accordingly. If you want fixed investment returns without any risk, go for traditional plans as these are the safest way to ensure guaranteed returns.

In case of unit linked plans, analyze the performance of your investment.  If you have a good grasp of investments and know where you are likely to get high returns, a ULIP may work well for you. You can get high returns but this will also involve high Risk factor.
 
Understand what you can afford. It is important that the investment returns you get be worth your time. But can you afford a higher amount for getting higher returns? This is the important question. How much sum can you afford to invest right now for future returns?

If you have a life event coming up which may require regular payments, like a child’s education or mortgage on a house, consistent investment returns will really help you out. So think in advance to plan for the future. If you have a sum available for investment today, don’t wait! Investment based insurance will not just provide you with returns but also insure you for any unseen eventualities. It’s a win-win situation!