An investment policy that can help you secure your future

Posted by aarti singh on September 20th, 2016

A majority of the Indian population comes under the middle class section. These people know the value of money and are mostly educated & aspiring. They believe in having financially secured life with an aim for wealth creation as well. This initiative of middle class people has led to a rapid growth in the investment sectors of India. There are a number of investment plans where middle class people can invest their money for wealth creation in the future. Markets are filled with hundreds of investment tools and often it becomes a complex thing to decide upon which is the best investment plan suitable for their needs.

Let us check some of the best investment plans available for Indian people based on their needs: 

Unit Linked Insurance Plans (UILPs)

ULIPs are market-linked investment tools and provide twin benefits of insurance and investment.  It is a market- linked product in which your fund gets invested in stock markets, bonds and mutual funds. The policy holder can invest only once or in regular investments. There are some charges associated with it such as administrative, fund allocation, etc. when you pay the premium. The returns depend on market performance. It may be risking profile, but there are debt based funds that can help you to stabilize the returns.  One can invest in ULIP plans based on their risk appetite. Here are some benefits of ULIPs based funds: Earn good returns from market-linked fund performances, Opt for single payment or make a regular payment of premiums, Partial fund withdrawal anytime you want, provided you have paid regular premiums for first three years, Enjoy flexibility to switch between funds you choose, Most of the insurance companies offer rider benefits – an added benefit of investing in a ULIP as you get income tax benefits with ULIPs.

Endowment Plan

Endowment is another best investment plan for middle class people for wealth accumulation. It assures a substantial life cover. At policy maturity if the policy holder dies, lump assured will be paid to the beneficiary. If the policyholder survives till maturity, he or she is paid the entire sum assured along with bonuses (if any).  Some benefits of Endowment plans are as follows: It offers life coverage, comes under low risk category, maturity, and rider benefits are available and tax benefits

Child Plan

Child Plan offers a combination of investment and insurance plan. It aims to secure your child’s future and at the same time it helps in your future wealth creation. There are two types of child insurance plans available in the market. One is child ULIP in which your fund is invested in stock, debt or balanced funds. The returns depend on the performance of the market. So the risk component is slightly high, but taking a financial expert advice will help you gain good profits. The other one is child endowment plans. In this plan, your fund is invested in debt instruments. The returns of this plan depend on the bonus payable at the time of maturity. So it has a low risk profile. Some benefits of child plans are as follows:  tax benefits, choose from different premium payment frequencies, flexible riders offered for child plan.

Apart from these , there are other investment tools which you can choose as per your risk appetite. While low risk provides guaranteed returns they have a lesser profit margin. Alternatively, the high risk investment plan may involve risk factor but derive chances of higher profit margins. You have to understand your own financial goal, risk appetite and personal circumstances, so that you can choose the best investment plan that meets your future needs well within time.


aarti singh

About the Author

aarti singh
Joined: August 29th, 2016
Articles Posted: 12

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