Investment Plans
Investment Plans
What are investment Plans?
Investment, in the context of finance, refers to the act of allocating funds or money with the expectation of receiving financial gains or benefits in the future. This can be achieved through the creation or acquisition of assets, such as stocks or real estate, with the anticipation of earning returns in the form of capital appreciation, dividends or interest income. The key differentiating factor between investments and other financial transactions is the intention behind spending the money. Investments are made with the intention of generating a profitable return over a certain period of time. Essentially, the funds spent on an investment are done so with the goal of obtaining some kind of financial return in the future.
The significance of Investment Policies can be summarized as follows:
- By allocating a portion of your income or savings towards investments, it becomes possible to establish a budget for monthly expenses, bills, and taxes.
- Creating a sound financial plan is essential to increase savings and work towards achieving financial objectives.
- Investments provide a means to handle unforeseen expenses related to healthcare, education, and other areas.
- It provides financial stability to investors and their families.
- In the long term, investments can be converted into a consistent source of income after retirement.
Types of Investments
Short term Investments
Mutual Funds
Long term Investments
SIP
Systematic Investment Plan
Pension Plans
ULIP
Unit-Linked Insurance Plan
The advantages of purchasing investment plans are as follows:
Financial Security
Investing in a carefully planned investment plan can help achieve both short-term and long-term financial goals such as a child's education, marriage, or retirement.
Favorable Returns
Investment plans usually provide better returns, especially in Unit-Linked Insurance Plans, when post-tax yields are taken into consideration.
Tax Benefits
Tax deductions are available for the premiums paid under Section 80C, and the money received at maturity is tax-free under Section 10 (10) D of the Income
Tax Act
It is important to note that different plans have varying tax exemptions, and careful evaluation is advised.
Additional Benefits
Riders like Critical Illness, Accidental death, and Waiver of Premium can be added to the plan.
Loan Option
Certain Insurance plans also provide the option to obtain a loan against the Insurance Policy in case of a financial need in the future. The interest rate may vary depending on the company.
Dual Benefits
By investing in an investment plan, you not only save for future requirements but also have the opportunity to increase your wealth by investing in the stock market.
Things to take into account before selecting
an Investment
Plan
are:
Comparison of investment returns with a benchmark.
Dual advantages of life coverage and savings.
Option to receive payout in lump sum or instalments.
Dependability of the AUM and Fund House.
Examination of the risks associated with each investment plan.
Flexibility in paying premiums.
Availability of a variety of riders to enhance life coverage.
Documents required to buy online
Investment Plans:
Age Proof
- Birth Certificate
- 10th or 12th mark sheet
- Driving License
- Passport
- Voter ID
- etc. (Anyone)
Identity Proof
- Driving License
- Passport
- Voter ID
- PAN Card
- Aadhar Card
- which proves one's citizenship
Address Proof
- Electricity Bill
- Telephone Bill
- Ration Card
- Driving License
- Passport
- should clearly mention the permanent address
Income Proof
- Income proof specifying the income of the person buying the insurance
Our FAQ's
Still have question ?
Our client Success Team is always here to help
Insurance as an investment refers to purchasing insurance policies that offer both protection and potential returns on investment.
Insurance works as an investment by providing financial protection against risks and offering the opportunity to grow your wealth through various insurance-linked investment products.
The benefits include financial protection, potential investment returns, tax advantages, and the ability to diversify your investment portfolio.
Types of insurance that can be considered as an investment include life insurance policies with investment components, unit-linked insurance plans (ULIPs), and annuities.
Insurance can complement traditional investment options, but it should not be seen as a complete substitute. It offers unique benefits and serves a different purpose.
Yes, many insurance policies can be surrendered or withdrawn before maturity, but it may result in penalties or loss of benefits. Read the policy terms and conditions for details.
Taxation for insurance as an investment varies depending on the policy type and duration. Generally, premiums paid and benefits received may have tax implications.
Insurance as an investment may be suitable for individuals with long-term financial goals, a need for insurance coverage, and a willingness to bear some investment risk. It's recommended to assess your individual needs.