Categorized | Investment Insurance

when to buy a protection plan or an investment plan?

Worried about the uncertainties of life? You never know what the future has in store for you, but you can plan to keep on celebrating life. In case of any unforeseen events, you can continue to enjoy financial stability. Your family can go on with a comfortable lifestyle even in your absence. This can be achieved with investment plans. There can be no secured way to save and see your money grow. Investment plans are life insurance protection plans that combine the benefit of insurance with investment. While a part of the Premium you pay is invested for growth, the other part keeps you insured.

Types of Protection Plans

Traditional: These are risk-free; you get a fixed return on the Maturity of the Term or in case of death. They can be endowment plans or money back plans. Your money gets invested principally in fixed deposits and debt funds. You enjoy multiple benefits in terms of Risk cover, return and safety

Unit Linked Insurance Plans (ULIPs): These are market-linked and are risk oriented; you do not get fixed returns. Market conditions impact the returns. You enjoy protection and savings combined with flexibility. You can switch, add, and withdraw funds partially or systematically. 

Right Time to Buy Investment Policy

There is always a right time for investment. It should begin right from the time you start earning. Buying an investment policy, you save for your future. You see your money grow. You can use your savings for crucial events in your life. You save taxes and minimize the tax burden. You can look forward towards the flow of income even after retirement. You leave a regular income for your dependent family, thus letting them enjoy financial protection in your absence. There are many possibilities that you can think of buying protection plans at the right time.  

Needs do change with time. When you are single and have no dependents, you may not prioritize on your investment needs. You may not think of buying protection plans. When you get married, needs robotically change. Responsibility crops up so is the increasing sense of dependency of your expanding family on you.

Planned investment starts at an early age. But it can also happen at any age. Investment rates, i.e. the premiums you pay are calculated according to your age. Younger the age, lower the investment rates and vice versa. Protection plans should be planned in such a manner that their maturity dates coincide with crucial events - your children’s higher education, their marriage fund, your retirement, etc. 

Risk-taking Ability

When you buy an investment policy, your age decides whether you should go for traditional or ULIP options. If you are young, you may be ready to take risks. You may then consider for ULIP investment plans. But if you are young, the sole breadwinner and have dependent family members, you may think of traditional plans. Then there are conservative investors who are not prepared to withstand market volatilities. For them, traditional is a better option.

Investment Rates and Maturity

As aforementioned, investment rates differ according to age. Rates also differ from plan to plan. For high sum assured, investment rates are high and vice versa. The maximum maturity date is fixed in protection plans irrespective of whether you buy traditional or ULIP, though for the latter you enjoy the flexibility to choose an investment period. 

How to Buy the Right Plan

Visit a reliable insurance aggregator and facilitator’s website like easypolicy.com where you can get the most relevant and reliable quotes from all Indian insurance companies, where you can make price-feature comparisons, where you can see what each company has to offer, and where you can buy the right investment policy. On this website, you can also get in touch with certified experts who can let you decide right. An informed decision can prove a blessing for your future!