Investment Through Life Insurance

Investment Through Life Insurance:

The Covid-19 has taught us all the importance of Insurance in our lives, however most of the people do not know that they can invest via insurance too. Investment through insurance is a relatively safer option than direct equity or mutual fund investments. Insurance policies are of various types and most of the insurance policies offer guaranteed returns (except ULIP’s). The prospect of guaranteed returns makes investment through insurance an attractive option. Insurance policy’s returns are not affected to stock market fluctuations and hence preferred by investors looking for secure returns.

What The Benefits Of Investment Through Life Insurance?

  • Tax Benefit
  • Helps to achieve financial goals
  • You can secure the future of your loved ones
  • Guaranteed income with insurance
  • Guaranteed plan is not affected in any way by market boom or recession or inflation.

Can NRIs Invest Through Life Insurance?

  • NRIs can also take life insurance if the insurance company’s terms and conditions are fulfilled.

Various Plans To Invest To Through Life Insurance:

Unit Linked Insurance Plans :

This is a type of Pure Investment Plan called Unit Linked, Non Participating and Non Guaranteed Plan in which you have to choose the fund according to how much risk you want to take while taking the policy as there are some high risk funds. There are low risk funds. When you pay the premium, some charges are deducted from the premium you pay and are invested in the fund of your choice. The value of the fund keeps increasing according to the performance of your fund. The amount of fund at the time of maturity of the policy will be given to the insured. If the Insured dies during the policy, his nominee will be given the Death Benefit given in the policy or whichever is higher than the fund value at that time. A certain amount can also be withdrawn from the fund value collected after certain years of the policy.

Guaranteed Return Insurance Plans :

The guaranteed plan says from the name that this is a guaranteed rupee giving plan. In which at the time of taking the policy you are given in writing how much money will be given during the policy even if the insured person is alive and also how much money will be given at the maturity of the policy. All these amounts will be paid as guaranteed fixed amount. If the insured dies during the policy, his nominee is given a lump sum amount as Death Benefit.

This type of planning is especially helpful for a person to plan their future financially.

Fixed Maturity Plans :

The guaranteed plan says from the name that this is a guaranteed plan. In which at the time of taking the policy you are given in writing that at the time of maturity of the policy if the insured person is alive then a lump sum amount will be given to the insured person. All these amounts will be paid as guaranteed fixed amount. If the insured dies during the policy then a lump sum amount will be given to his nominee as Death Benefit.

Participating Plans :

This plan offers both guaranteed and non-guaranteed returns. Such policyholders have a share in whatever profits the insurance company makes. So such a plan is called a participating plan. A guaranteed amount is also offered in such a plan. The amount guaranteed will be paid in writing at the time of taking out insurance and the amount of non-guaranteed amount will depend on the profit of the insurance company each year. In such a plan an income is paid every year during the policy period and at the maturity of the policy if the insured is alive both the guaranteed and non-guaranteed amount will be given to the insured as lump sum. If the Insured dies during the policy period, a lump sum amount will be given to the Insured’s nominee as Death Benefit.

Employer Employee Insurance Plans :

An employer- employee insurance policy is one in which the employer or company purchases insurance policy and the beneficiary is its employees. It is a benefit provided by an organization to its employees. Presently, the kind of insurance is most relevant because it works as tool to remain old employees and attract new employees.

It is very common to get confused between employer-employee insurance and key man. However, the two terms are completely different. On one hand, where key man is only a term life insurance, the other hand, the employee-employer structure is used for any kind of insurance plan.