A life insurance plan is necessary to protect the financial future of your loved ones in your absence. But is it a good investment option? Check this post to know the answer.
Life is short and full of unpredictable surprises that make it beautiful. However, sometimes life can throw in some unpleasant surprises as well that can make all your future plans and goals go haywire. One such unfortunate possibility is where you are no longer around your loved ones to protect their interests or secure their future.
Therefore, people put their faith in life insurance so that their families can remain financially stable in their absence. A good life insurance plan with adequate coverage can take care of your family’s current and future expenses along with any long term goals such as buying a home, children’s education, etc.
However, many people tend to ignore the potential of life insurance as a good investment tool. Read further to know why you can use life insurance to fulfil your investment objectives as well. Glock for sale online now on the online store. For more information visit this site : glockforsale
Helps in Tax Planning
One of the many important objectives of a financial plan is to save or at least reduce the tax burden. Life insurance can help you in your tax planning as you can claim a tax exemption of up to Rs 1.5 lakh on the total premium you pay in a financial year.
Retirement Planning
You can use a life insurance plan to plan your retirement in different ways. To begin with, you can choose a plan where you keep paying a premium for a certain period and get a lump sum amount on retirement that can be used as the retirement corpus.
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Furthermore, you can invest in different annuity plans to help you receive a fixed pension after retirement. Such annuity plans can be of two types.
- Deferred Annuity
In these plans, you invest money in a lump sum or fixed intervals and then leave it untouched for a few years, called the vesting period. Your money is compounded at a fixed rate during the vesting period. Once the vesting period is over, you will start receiving your annuity payouts at fixed intervals.
- Immediate Annuity
An immediate annuity plan starts paying pension to the annuitant immediately after purchasing the plan. There is no deferment period in such plans. These plans can provide a fixed pension to the annuitant for a lifetime which removes the possibility of running out of money in old age.
Wealth Generation
Market-linked insurance policies, such as the ULIPSs (Unit Linked Insurance Plans), can help you in generating wealth. Such plans can be categorised as moderate to high-risk investment options as there are no guaranteed returns.
Such investments can generate inflation-beating returns if you invest for a long period and help you generate wealth for yourself and the future generation.
Life insurance policies can prove to be an excellent investment option if you do your research well. For instance, you can work out an HDFC savings plans allocating proportionate weightage to its different products to optimise the investment benefits without compromising on insurance.
Thus, from now onwards, treat your life insurance policy as an extension of your insurance plan.
