Categorized | Investment Insurance

is it worth buying an investment insurance plan?

Insurance plans are a great way to make safe and reliable investments. There are many insurance plans in the market which can double as profitable investment plans with high investment returns. When you pay premiums for your insurance, a part of these can be put into an investment plan. This way you ensure a constant supply of investment returns to supplement your income at high rates. What’s more, you can take an investment plan which gets mature at a time which coincides with major life events you may need money for, such as your child’s education, wedding, buying a house etc. But is the investment plan you are going for really worth it? What are the rates of return and how much benefit do you really get out of it?

Ask yourself these questions before taking an investment plan:

Do you get guaranteed returns or can you invest the premiums in your choice of investment assets?

How long do you have to pay the premiums? Is it for the entire duration of the insurance or a fixed term?

Does the Maturity of your investment plan coincide at a time when you may need the money?

What is the amount you will get at maturity? Is it a fixed sum or are there additional bonuses?

Such considerations will help you find the best investment plan for you and your family.

Traditional or ULIP

Traditional endowment plans will give you returns on a fixed rate. On the other hand, Unit-Linked Insurance Plans offer returns based on market rates. You can choose how and where your premiums are used. It is an investment plan where you have flexibility to choose your Assured sum and Premium amounts. You can even change these after the Policy has started. Furthermore, you can withdraw money before maturity, as suits your needs. On the other hand, traditional investment plans are a safer choice because they offer consistent returns. These are not dependent on the rates in the market.

A ULIP can definitely offer much higher investment returns. But these returns are not guaranteed and sometime you may get less investment returns than expected. In this way, ULIP is a higher Risk investment plan. You can also switch your money from a high risk investment plan to one with lower risk. Additionally, ULIP allows you to choose your premium payment options. You can pay regularly or in one go, depending on the type of ULIP.

Money Back Policy

These are a great way to ensure sustained investment returns over a period of time. A Money Back Policy is the only investment plan where you are sure to receive returns at a constant rate throughout the life period. With a money back policy, you get a certain rate of the Insured sum as investment return at regular intervals. At maturity, you receive the entire balance amount if no claims have been made. Money back policies are a safe bet as they keep you and your family protected from market fluctuations. Changes in interest rates do not affect your returns on a money back policy. Added to this is the sure-shot guarantee of constant investment returns which you can further use in an investment plan.

Understanding investment returns on your insurance plan is very crucial before putting in your money. The amount that you invest and the rate of returns decide if your Investment Insurance Plan is worth it or not. It is recommended that you compare the different investment plans available in the market on variables such as investment options, rate of earning, premiums payable etc. This will help you choose the most appropriate investment plan for you and your family.