Why Your Insurance Can Be As Good As Your Savings

If you fail to plan, then you plan to fail. This old saying applies to many things and is most practicable to your finances. Planning our finances sets us to be future-ready for what comes our way. Therefore, it is essential to set aside a portion of our money to be put in investments as a useful savings tool. Not only do we manage our wealth by keeping it but using it to grow even more. Saving gives us a security net that will help us and our family.

Insurance is a good fit for our needs to have security and savings. With a proper asset allocation strategy, insurance can significantly maximize our assets and improve our wealth.

The Indian insurance industry has developed to become more customer-focused and has served investors to the degree that they went beyond life insurance’s objectives. These products are great savings tools if used with the right perspective and well, so much so it can yield interest and grow one’s investment.

SAVINGS PLANS WITH ADDED BENEFITS

There are insurance plans that become savings by not only ensuring your life but also having the flexibility of allowing you to withdraw money from the policy you and your family can use in times of need without surrendering the policy.

There are now many insurance companies that offer online term plans. They also cover regular monthly benefits that could be level or increasing monthly, depending on the client’s choice. Our needs change as we grow from being single to getting married, raising the family, and retirement. It can also be used in certain investments you wish to take, like building a house.

NEW AND IMPROVED ULIPS AS LONG TERM INVESTMENT PLANS

Unit-linked plans (ULIPs) are long-term investment plans attached to insurance products and are tax-efficient and seamless transfer from debt to equity and back. More than five years ago, ULIPs were given a negative note because of its high fee structure and the agents’ misrepresentation of the product because of the higher commissions attached to be earned from it. As a result, measures for ULIPs were reformed. Under the new guidelines, ULIPs as insurance with an investment product, very low charges were applied than those imposed on mutual fund products. This also means that ULIPs become an excellent solution to cover risks, taxes, and even become just a long term investment one could grow for specific needs.

ULIPs can easily be the product for interested investors who do not want to go directly to the stock market to grow investment. Instead, they trust the company and avail of the benefits of long term market-linked growth. On other values, having a ULIP can help clients from the regular habit of savings, which they can also partially withdraw every five years.

Based on Materials from The Economic Times

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