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Unexpected economic slump, pandemic situations, and recession will have their effect on every individual. Investments are the best way to lead a secure future. You have to make a financial plan early in life to satisfy your needs, make way for short term and long-term goals and provide financial protection to your family. Financial planning with adequate investments will make you well-to-do in life.
What is an investment?
Investment is a financial practice wherein you allocate a fund to purchase an asset or a financial instrument to fulfil your financial obligations throughout your life. There are different types of investments in India that you need to know. Some of them have been mentioned below.
1. Life Insurance
Life insurance is imperative to protect your family in a financial crisis. If you are the only earning member in your family, your sudden and unfortunate demise can affect your family in future. Investing in term insurance through monthly premium amounts can help you earn a sum assured for your family. It will be provided as a death benefit to the nominee.
Buy term insurance online to make the best use of all the product features with proper knowledge. Online term insurance facilities make it easy and comfortable for investors to view the policy features. With a term policy, you can enhance the sum assured by opting for various riders# available like the accidental death rider#, total and permanent disability rider# and the critical illness and terminal illness rider#. It will ensure that the insured amount is payable under certain terms and conditions. There are also options to waiver future premium payments if there is a disability or get a refund of the premium amounts paid if you outlive the term policy tenure. And with Tata AIA Life term insurance you can enjoy extensive benefits.
Unit Linked Insurance Premium is a type of endowment plan that offers dual benefits. According to this plan, one part of the premium is used as a life cover just like a term policy, and the other part is invested in equity, debt or hybrid funds. It will give you high returns in the long run. You can switch between the different funds based on market fluctuations. If you are an early investor looking for insurance and investment benefits, ULIP is an ideal option. It has tax* benefits as well.
3. Guaranteed1 Returns Savings Plan
A guaranteed1 return insurance plan will provide a life cover like term insurance and, additionally, guaranteed1 returns. The guaranteed1 returns are payable post maturity of the policy tenure. The policyholder can avail the returns as a lump sum amount or a combination of lump sum and guaranteed1 annual income for a set period. It is also possible to receive it as a regular monthly income throughout life. This is an ideal option for people having a big family with extended financial obligations even after retirement.
4. Real Estate
Real estate is a popular investment option. It provides two benefits; capital appreciation and rental income. If you locate a good property in an industrial area with a good value, then purchasing the land will give you higher returns on selling it later. If you have purchased it for rental purposes, you will get a regular monthly income. However, registration and approvals are complicated and take a lot of time.
Gold is the easiest and simplest way to invest if there are sufficient funds. It is easy to liquidate gold investments that will help us during emergency financial situations. Gold prices fluctuate as a response to economic conditions. However, the fluctuation will not bring drastic changes to the gold price. Hence, possessing gold will be profitable.
6. Pension Plans
Pension plans such as a National Pension Scheme will help people save money periodically for retirement. It is an initiative by the Central Government wherein the people have to invest a particular amount in a pension account regularly during their employment. Post-retirement, you can take a percentage of the amount accumulated and the rest as regular monthly income.
Investing in stocks is not easy. The extent of risk involved in the case of price fluctuations cannot be measured. The right time to enter and exit is not specifically established. However, on a long-term basis, the returns are high compared to all the other types of investments. Pick the right stock and invest at the right time. Seek professional advice if required.
8. Mutual Funds
If investing in stocks is a difficult task, you can always choose a mutual fund. An asset management company will collect funds from various individuals or institutions and invest in stocks, bonds, or other market instruments. It is comparatively a low-risk investment. Equity Linked Savings Scheme is a viable option to invest for a long time for high returns and tax benefits.
9. Public Provident Fund
It is one of the most important investments for tax benefits and is regulated by the Government of India. An individual can open a PPF account and invest money regularly. It is a long-term investment with a minimum tenure of 15 years. The money invested and the interest accrued is qualified for tax benefits.
10. Fixed Deposit
Fixed deposits will serve as a good rainy-day fund. You can invest a huge sum on a fixed deposit and get a lump sum amount along with interests after a stipulated period. Though the interest rates are low, it will be useful for short term financial requirements.
Having discussed different types of investment instruments, it is your responsibility to plan investments early in life to make good profits. It is not advisable to purchase all types of investments. You have to evaluate your financial status and requirements to find the right investments for you. However, Term Insurance is a necessity. Pension plans and guaranteed1 returns savings plan are important for comfortable retired life. Forecast your financial obligations, invest now and stay rich forever!
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#Riders are not mandatory and are available for a nominal extra cost. For more details on the benefits, premiums and exclusions under the riders please refer to the Rider Brochure or contact our Insurance Advisor or visit our nearest branch office.* Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
THE LINKED INSURANCE PRODUCT DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICY HOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR.
Past performance is not indicative of future performance.
All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.
Please make your own independent decision after consulting your financial or other professional advisor.
Insurance cover is available under the product.
The products are underwritten by Tata AIA Life Insurance Company Ltd.
The plans are not a guaranteed issuance plan, and they will be subject to Company’s underwriting and acceptance.
For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale.
This blog is for information and illustrative purposes only and does not purport any financial or investment services, and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or a recommendation regarding any particular security or course of action.
Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document issued by the insurance company.
Every effort is made to ensure that all information contained in this blog is accurate at the date of publication. However, the Tata AIA Life shall not be liable for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.