Benefits And Features Of An Investment Plan

At various life stages, one needs funds. An individual needs to build the corpus. Whether the need is for a child's education, marriage or retirement savings. When one starts looking for various ways to build funds, one tends to look at investment plans where your money grows while one sits back. Because of the number of investment avenues, there is no simple solution to it. However, the simplicity of investment plans offered by most life insurance companies is one of the finest options available.

Benefits of Investment Plans

There are various benefits of investment schemes in India. Some of the major advantages of an investment policy are:

• Wealth Creation: Investment plans with life insurance are sure-shot ways to accumulate wealth over a period. As an investor, one can choose what suits the best depending on the risk, returns and disposal amount to buy a plan. In the future, when you require funds for a child's education, child’s marriage, retirement, pension, etc. life insurance investment plans will financially aid you.

• Financial Protection: A life insurance policy provides life coverage with investment options, which takes care of the family financially as both Survival and Death Benefits are provided. At maturity, the policyholder receives the returns with profit in the pocket. This way one can provide long-term financial security to the family. In case of an unfortunate eventuality, the policyholder dies before the maturity period, the insurance company will pay the nominee the sum assured. In this way, it provides financial protection to the family of the policyholder.

• Death Risk Coverage:  Not all investment avenues offer death risk coverage options. However, investment plans with life insurance do. These plans include death risk coverage. This way, your family’s financial needs are taken care of even in your absence. The sum assured is paid to the nominee in the event of the death of the policyholder.

• Retirement Savings: One can buy these investment plans at any given time of life stage. That said, this allows you to create the corpus for retirement. One can buy and build funds that can be used at a later stage of life. In this way, even after retirement, the investor will be financially independent.

• Flexibility:  Flexibility of money to be invested and the duration. One can opt as feasible, depending on the needs and planning.

• Save Taxes:  Investment plans are not only risk cover or wealth accumulation plans, but these plans also help in tax savings. As per section 80C and 10(10D) of the Indian Tax Act, premiums and payout are exempted from tax. A perfect combination of savings, wealth creation, and financial protection with tax benefits.

• Loan Facilitator:  Life insurance investment plans also act as a loan facilitator. But, it depends on the coverage one has taken, premiums paid, eligibility for the loan amount, etc.

Features to Check Before Buying Investment Plan

Mentioned below are the features you need to check before buying an investment plans:

• Where are you investing: You need to know and be sure about where you are investing and how much risk is involved.

• Look for complete transparency: Look for completely transparent investment plans.

• Study past performance: The objective of investing is to gain returns. For this, you must check the past performance report of the funds where your money will be invested. This will help you to know how much returns can be expected. As per your investment funds, you can see their long-term or short-term performance report

• How much are you charged: You may be charged a minimal amount as a commission to manage the portfolio. So you must check how much you are charged just to ensure you are not overcharged. And if yes, why?

• Know your fund house: How reputed or well-known is your fund house? As you put your trust in the fund house it is essential to know about their claim settlement ratio. Plus, you are giving your hard-earned money into their hands to utilize on your behalf and to the best of their knowledge and experience, it is your responsibility to know your fund house.

Conclusion

An investor of a life insurance investment plan can opt for riders. As the investment plans also combine death risk coverage, optional riders under such policies are available. Riders expand the policy coverage. In addition to the basic sum assured, rider benefits are also paid.

Disclaimer: This article is issued in the general public interest and is meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive and should research further or consult an expert in this regard.