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Investment Plan
Nowadays, everyone is worried about their future. They want to make a decision that not only benefits themselves but their families as well. Money and income play an important role in making sure your family's lives will continue as they were meant to. This is why most people with a good income prefer getting an investment plan so that they can be secure about their future. An investment plan is an insurance plan where you get paid returns on your premium which you paid when you bought the plan.
What is Insurance Investment Plan
What is an investment plan? Investment plans have been developed as a special ULIP (Unit Linked Insurance Plan) product by many insurance companies to take advantage of what they saw as the great benefits of both ULIPs and mutual fund investments. As the name suggests, you will be able to combine your investment in ULIPs and your life cover into one single product called: Investment plans. Why should I invest in an investment plan? If you are like most people and want to use an online life insurance plan, then it makes sense to use an investment plan from the same company that provides you with your personal accident and term life insurance. This way, all your money (premium for life insurance + money invested through unit-linked plans) goes towards providing financial protection for your family.
Types of Investment Plans
Investment plans vary. There is no single investment plan that suits all investors. It all depends on the investment risk profile and requirements of the investor. When you meticulously start evaluating the investment plans, what matters is the best investment plan which offers long-term sustainable returns, capital appreciation, and tax-saving benefits. It is paramount to consider the risk associated with each investment plan before choosing the best investment plan with a high return.
Low-Risk Investment
- Public provident fund
- Senior citizen savings scheme
- National pension scheme
- Bank Fixed Deposit
- Gold
- Sukanya Samridhhi Yojana
- RBI Taxable Bonds
If volatility is a part of your portfolio, or if you want some stability in the market, you may choose low-risk investment options. Since these investments usually provide a stable growth of capital, the investors should be ready to lock in their investment for the long term since they will not earn any significant benefit until the end of the term. Low-risk investment plans tend to offer guarantees of returns and incur very little damage during economic downturns and slowdowns. These come with higher dividends, fewer risks involved, and attractive interest rates. While these investments provide low-risk returns, the investors may have to wait for some time to deliver high yields. Let’s take a look at some of the best low-risk investment options that you could consider:
High-Risk Investments
- Debt Mutual Funds
- Direct Equity
- Equity Mutual Funds
- Unit Linked Investments Plan
High-risk investment plans are suitable for investors who are able to take large financial risks and whose main focus is long-term capital growth. In the case of high-risk investment plans, there may be significant fluctuations, but the chances to make a huge possible return in the long term are also very high. High-risk investment plans are certainly suitable for investors who have a long-term view and want capital growth. However, there are some considerable risks involved in such plans; therefore, some investors prefer to enter more conservative schemes and plans. Let’s take a look at some of the best low-risk investment options that you could consider:
Medium Risk Management
- Monthly Income Plans
- Hybrid-Debt Oriented Funds
- Arbitrage Funds
For those of you who are unwilling to take high risks with the investments, a medium-risk investment plan may be an appropriate choice. No one wants a huge loss but no one is willing to sit out the potential for wealth either. That is where medium-risk investment comes in. Moderate or medium-risk investment plans are a popular choice among savvy investors who want the power to grow their money while protecting their principal. This category includes investment plans that offer balanced and diversified investment. These types of plans not only provide an opportunity for growth but also take care of the market volatility up to a certain level. Some of the common medium-risk investment plans are.
Documents Required for an Investment Plan
PAN Card
Aadhaar Card
Driving Licence
Voter ID
Passport
For Salaried Individuals
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Form 16 of the latest year.
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Last 3 months' bank statement showing salary credit
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Income tax return for the last 2 years.
For Self-Employed Individuals
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Form 26 AS
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Income tax returns for the latest 2 years along with income calculation.
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ITR of the latest 3 years not filed in the same year (In case, income computation is not available)
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Profit loss account and CA (certified audited) balance sheet for the latest 2 years.
Things to Keep in Mind before Choosing an Investment Plan
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What are your goals : The first decision an investor has to make while choosing an investment plan is what kind of scheme he/she should subscribe to. And this is mainly dependent on the goals that an investor wishes to achieve. This may include buying a house, a car, foreign travel, marriage, and the expenses incurred for their children‟s education and marriage.
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Calculate your Expenses and Savings : Savings are essential to keep in place when considering long-term goals. If someone is looking to buy a house and is planning on saving money, they might want to consider investing or getting life insurance as they both go hand in hand. In this case, if someone has a large amount of savings, getting return benefits on their investment plan could be a great idea. While planning for the short-term goal of purchasing a home, it is best to think about saving more in the long term by saving all the money that comes in after repaying bill expenses and other regular costs.
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Calculate Future Expenses and Savings : Future expenses and requirements will determine which investment plans are appropriate for the investor. If the investor has no immediate major expenses on hand, s/he can choose an option that charges a premium for just a few years and provides enough returns to pay for it. An investment plan is something that should have a number of options to choose from. These options should include the amount invested and the time frame for the plan. The investor is much likelier to have a long-term goal and can, therefore, think about what kind of benefit pays out well and is good for the future.
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Existing and Required Insurance Cover : While an insurance cover and investment plans pay for different things, the first thing which you should look out for while selecting a financial product is its return or cover respectively. Both things are required to sustain your lifestyle in case you are unable to work anymore or in the unfortunate event of your death. While the return you earn from an investment can let you live a similar lifestyle in case you have no more earning potential, that from an insurance policy can provide you with additional living expenses so that your children can take care of themselves and your spouse. It can also let your spouse receive adequate support for the rest of his/her life.
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