A life insurance investment plans offer multiple avenues to save and grow your money for future. An investment is a insurance plan that offer dual benefits. one this tax saving plans and second is unit linked investment plans (ULIP).
A perfect financial planning is that which gives you the opportunity to create future wealth, allows you to enjoy income tax benefits and offers life coverage at the same time. So, you must be thinking how you can receive all these benefits under one single plan. Here we will tell you about three tax-saving instruments that will give you all the three benefits at the cost of one.
Unit Linked Insurance Plans or ULIPs are investment plans offered by insurance companies. ULIPs are considered one of the best instruments for tax saving investments in terms of returns. In the past 3 years, ULIPs are found to give 9.8% returns. You also enjoy income tax exemption under 10(10D) of Income Tax Act. Moreover, ULIPs offer life coverage that protects your family financially against unforeseen future events.
Smart Tip on Investing in ULIPs
You need not be an expert in market timing to get high ROI from your investment plans. A tactful asset allocation will help you get good returns on your investment. Start by investing in a debt fund, and then gradually switch your money to equity funds for higher returns.
Pension plans also are investment plans that offer life coverage as well. If you want to build a sizeable kitty for your post-retirement days, consider pension plans as they offer the dual benefits of investment and insurance. Section 80CCC allows you to enjoy tax benefits under pension plans. Pension plans provide with the opportunity for good tax saving investments and they also promises high returns. In the past three years, pension plan have given 7-14% returns of investments. So if you are concerned about your post-retirement life, consider investing in a pension plan now.
Smart Tip for Investing in Pension Plans
Pension plans offered by both insurance companies and mutual funds are good instruments of tax saving investments. However, it is better to invest in pension plans offered by mutual funds as they give higher returns than those offered by insurance companies.
Different types of insurance plans are available in the market. Insurance plans are good tax-saving investments, especially for risk averse individuals. Though the ROI from insurance plan are less high in comparison with ULIPs and pension plans (5.5 – 6% returns on a 20 years plan), but the risk associated with insurance plans are much lower than the two investment plans mentioned above. You can choose from a wide range of insurance plans made available by the insurance providers in our country. So if you want really want insurance protection along with tax-saving investments, investing in an insurance plan from a good life insurance company would be the best option for you.
Smart Tip on Investing in an Insurance Plan
Insurance plans, as you know, are long term investment plans. So, if you find it difficult to afford the payment of premiums for such a long period of time, turn your plan to a paid-up policy. This will help you end the premiums but the cover will continue throughout the period as assured.
Instruments for tax-saving investments are numerous in the market. Apart from the three mentioned above, others instruments include ELSS Funds, NPS, Public Provident Funds, Voluntary Provident Funds, Bank FDs and NSCs etc. Among these all, ELSS funds or Equity Linked savings Schemes are found to offer the highest return on your investments.
So, do your research thoroughly on different types of investment plans. It will help you choose the right plan that meets all your financial requirements while giving you the opportunity to fulfil your financial goal for future.
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Best SIP Equity Mutual Funds to Invest in 2017
If you can go back in time and invest in some SIP investment plans like HDFC Top 200, then had you invested Rs. 1000 every month you would have a return of around 30% annualised now. This is an average over the past ten years.
What's Wrong with Using Insurance as an Investment?
Having a life insurance to safeguard the future of your loved ones is a must to do act. A pure life insurance policy provides life coverage to the family of the insured in case of any eventuality. However, many people want to have a life insurance policy from the investment perspective other than life protection.
