What are Investment Plans?
Investment Plans are Life Insurance Plans which also act as a secure way to save, invest and grow your money, in addition to providing Life Cover for your loved ones.
WishPolicy brings you different types of Investment Plans depending on your stage in life, desired rate of return, payout expectations and life goals. The two main categories are Unit Linked Insurance Plans (ULIP) and Guaranteed Return Plans. Want to know more?Get personalize quote
Benefits of Investment Plans
Best Investment Plans
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Investments when made as per your risk appetite and desired time horizon help you accumulate the desired corpus to achieve your various financial goals - marriage & education of kids, retirement money, etc. Amongst the investment options available for these purposes, life insurance cum investment plans remain a good choice. The reason being these plans provide you a life cover while also helping you earn a return of sorts on the premium you pay to the insurer. Sounds like a win-win!
With a life cover, your family members will get the lump sum amount (sum assured) in case you die during the policy term. These plans come with maturity payouts such as loyalty additions, bonuses, etc. Various wealth boosters are also included in these investment plans to raise your corpus and help achieve your financial goals easily.
Let's check how the benefits of these plans could help you in financial planning.
Choosing the best investment plan will require comparing different options based on life cover, likely investment proceeds, the risk appetite you have, etc. We can help you choose the best one by highlighting each of these points below. Let's check them without any further delay.
Assessment of your family's needs in your absence is the due diligence you must do before buying an insurance cum investment plan. You won’t like to see your family members compromising on their lifestyle after your death. Your current income level may have been allowing your dependents to carry out their ongoing lifestyle. But can that income ensure the same in your absence too? Maybe not! The growing inflation will make it insignificant over time. So, choose the sum assured wisely to get adequate financial security for your family. Keep the sum assured to around 15-20 times your yearly income or add 5-6% to your annual expenses every year to calculate the ideal coverage amount. The plan that gives such a sum assured is the one for you.
Once you have found some 4-5 plans offering you the sum assured you seek, see which one charges you less on the premium front. The premium depends on the policy term, premium payment frequency, administration charges, if any, etc.
Life insurance cum investment plans come with different premium payment terms - single, regular and limited pay. A single premium plan means you need to pay only once throughout the policy term. Regular pay means the payment of premiums will happen throughout the policy term. Limited pay, on the other hand, comes with a premium payment term less than the policy term. So, if the policy term is 25 years, you may have to pay the premium for only 15 years. But don’t get the impression that limited pay will be better than single and regular pay. Single pay premiums can be very high and beyond many. Also, the premium amount for limited pay plans can be higher than that of regular plans. So, check which makes you pay less overall and gives you the maximum benefits.
As these life insurance plans invest your money in different instruments with varying risk levels, it’s important to assess your risk appetite. Some plans would invest heavily in equities to generate higher returns, but at the expense of greater risks. Whereas some plans invest in fixed income instruments offering guaranteed returns. Now, it depends on how much risk you can afford. If you can afford high risks, investing in a Unit-linked Insurance Plan (ULIP) will be better. Someone with a low-risk appetite would find investing in endowment plans more appealing. See the kind of person you are in terms of taking risks and choose your investment plan accordingly.
Investment plans are broadly categorized into the following -
These plans offer a unique combination of life cover and investment benefits. A part of the premium paid by you is invested towards securing the sum assured promised in your absence, while the other part is invested in equities, debts or both to generate some returns. You will get a list of funds to choose from. You could see where the fund will invest your money. So, if the fund invests more in equities, go for it when your risk appetite is very high. In case you have a low to moderate risk appetite, choose a fund that invests predominantly in debt instruments. You can also use the ‘Switch’ facility to mobilize your money between equity and debt. The fund’s performance depends on the returns generated by its underlying securities. Here, the investment risk is fully yours, so choose the fund carefully to have a smooth ULIP experience. At maturity, you will receive a policy fund value based on the prevailing price of the units held in a portfolio
ULIPs come with a host of charges that get deducted from the gross returns of the fund you choose to invest in.
|Policy Year||Discontinuance Charges for Annual Premiums >INR 25,000 (In INR)||Discontinuance Charges for Annual Premiums<=INR 25,000 (In INR)|
Note : Some ULIPs may not charge for policy administration, premium allocation, etc.
So, if you are eyeing higher returns and can afford greater market risks, these are the ULIPs from which you can choose the one for you.
|Policy Name||Sum Assured||Fund Options||Policy Term (In Years)||Premium Amount (In INR)||Loyalty Addition Rate|
|Aegon iInvest||Minimum - When the entry age is less than 45 years - Higher of 10 times the annualized premium and 0.5 x policy term x annualized premium When the entry age is 45 years and above - Higher of 10 times the annualized premium and 0.25 x policy term x annualized premium||Bluechip Equity Fund Stable Fund Accelerator Fund Opportunity Fund Secure Fund Debt Fund||10/15/20/25||Starts from 2,000 per month||1.70-1.80% of the sum assured|
|Max Life Online Savings Plan Variant 1||Highest of - cover multiple times the annualized premium 0.5 times the policy term x annualized premium 105% of total premiums received till the date of death Total fund value as on the date of death||High Growth Fund Super Growth Fund Growth Fund Balanced Fund Secure Fund||5-20||Starts from INR 1,000 per month|
|Aviva i Growth||6,00,000 - 50,00,000||Bond Fund - II Balanced Fund - II Enhancer Fund - II||10/15/20||Starts from 48,000 per annum||1.25-3% of the sum assured Available in the last three years of the chosen policy term|
|HDFC Life Click 2 Invest||7 times the annualized premium (When the Entry Age is more than 55 years) 10 times the annualized premium (When the Entry Age is less than or up to 55 years) Single -Premium Policies - 1.25% of the single premium||Equity Plus Fund Diversified Equity Fund Opportunities Fund Balanced Fund Income Fund Bond Fund Conservative Fund Discovery Fund Equity Advantage Fund Secure Managed Fund||5-20||Starts from 1,000 per month|
Endowment plans invest your premium towards life cover and savings. Upon the death of the insured, the nominee/s will get the sum assured as promised at the time of policy inception. Further, the future premiums get waived. Besides, these plans help build your savings over time by investing your money in instruments offering guaranteed returns. Endowment plans come in several variants -
After having a brief on endowment plans, let’s check, compare and choose from the best ones in this life insurance segment
|Policy Name||Sum Assured||Policy Term (In Years)||Premium Amount (In INR)||Maturity Benefit Payout|
|HDFC Life Sanchay Plus||The highest of - 10 times the annualized premium 105% of the total premiums paid Guaranteed sum assured on maturity An absolute amount payable at the time of death||6-20||Starts from 2,500 per month||Maturity benefits payable as a lump sum for lifelong after the policy period, or for a specified number of years post the policy term|
|Aviva Guaranteed Income Plan||20 times the annual premium||15||Starts from 50,000-75,000 per annum||11 annual installments of 1.2 times the annualized premium at the end of each year after maturity|
|Max Life Monthly Income Advantage Plan||Minimum - 54,000-4,05,000||16-45||Starts from 25,000 per annum||Accrued compound reversionary bonus, if any, terminal bonus|
|Canara HSBC OBC Guaranteed Savings Plan||The highest of - 11 times the annualized premium 105% of the total premiums paid Guaranteed sum assured on maturity An absolute amount payable at the time of death||10-20||Starts from 20,000 per annum||Guaranteed sum assured on maturity, guaranteed yearly additions, guaranteed loyalty additions|
As the name suggests, money back plans return the money you pay as premiums, to you at regular intervals. A certain percentage of the sum assured, known as survival benefits, is paid to the policyholder at predetermined intervals. At maturity, the remaining amount left from the actual sum assured is paid. These plans, usually, participate in profits and, therefore, bonuses are paid either upon the death of the policyholder or at the time of policy maturity.
How Do Money Back Plans Work?
The working of money back plans can be best understood with an example. Let’s consider the one mentioned below.
Example - You buy a money back plan that offers a sum assured of INR 20 lakh with a policy term of 20 years. If you opt for a regular premium payment plan having a survival benefit of 15% after every 5 years, you will get a sum of INR 3,00,000 (20,00,000 x15%) at the end of the 5th, 10th, 15th and 20th policy year. In case you die in the 17th year of the policy, the nominee will receive a sum assured of INR 20 lakh along with the bonus that would accrue.
Which are Best Money Back Plans?
If you want to choose a money back plan after reading its features and benefits, glance at the list below and pick the one that suits you the best.
|Policy Name||Sum Assured||Policy Term (In Years)||Premium Amount (In INR)||Survival Benefit||Maturity Benefit|
|Aviva Dhan Samruddhi||Minimum - 2,65,000-4,00,000||10-20||Starts from 3,109 per month||125% of one year’s premium at the end of every 5th policy year, except at maturity||(Sum assured + guaranteed additions till maturity) less the payout of survival benefits|
|Bajaj Allianz Cash Assure Plan||Minimum - 1,00,000||16/20/24/28||Starts from 6,500 per annum||15%/20%/25%/30% of the sum assured depending on the policy term you choose||60% of the sum assured plus vested bonus (if any) +terminal bonus (if any)|
|HDFC Life Super Income Plan||Minimum - 18,457-76,198||15-27||Starts from 2,000 per month||3.84-12.50% of the sum assured on maturity during the payout period||Last survival benefit amount Accrued Reversionary Bonuses Interim Bonus (If Any) Terminal Bonus (If Any)|
|Aegon Life Regular Money Back Insurance Plan||Limited Pay Plans - Higher of 10 times the annualized premium and absolute sum assured amount Single Pay Plans - Higher of 1.25 times the single premium and sum assured||10-20||15% of the sum assured at the end of 10th to 19th policy year||Accrued Bonus + Terminal Bonus, if any|
Securing the future of your child must be your top priority. And it is possible with a life insurance plan. You get a life cover in case of your unfortunate death, while your children receive the financial support to pursue his/her studies without any delay. The life cover amount will come in a lump sum while the children will get flexible payouts upon the completion of key milestones in their study life. These plans often come with an in-built premium waiver upon the death of the children’s parents. It means the future premiums will get waived off. However, if there is no such waiver integrated into the plan, opt for a premium waiver rider. The inclusion of the rider will raise your premium by some amount.
|Policy Name||Sum Assured||Policy Term (In Years)||Premium Amount (In INR)||Survival Benefit||Maturity Benefit|
|HDFC Life YoungStar Udaan - Child Plan||Highest of - Sum Assured on Maturity 10 times the annualized premium for people with an entry age up to 50 years 7 times the annualized premium for people with an entry age of more than 50 years Highest of - 10 times the annualized premium Sum Assured on Maturity 105% of the total premium paid||15-25||Starts from 2,000 Monthly||This benefit applies for the last 5 policy years Academia Option -15% of the Sum Assured payable 1-4 years before maturity and 30% on the 5th year Career Option - 15% of the sum assured on each of the last 5 policy years||Aspiration Option - 100% of Sum Assured + Guaranteed Additions at 25% of the Sum Assured Academia Option - 130% of the Sum Assured Career Option - 140% of the Sum Assured|
|Aviva Young Scholar Secure||Highest of - 10 times the annualized premium Sum Assured on Maturity 105% of the total premium paid||21 minus the entry age of the child||Starts from 33,000 per annum||15,000-30,00,000 towards tuition fee and college admission fund (The payout quantum depends on the chosen plan variant)||Maturity Sum Assured minus the amount already paid towards tuition fee and college admission fund (The payout quantum depends on the chosen plan variant)|
|Aditya Birla Sun Life Insurance Vision Star Plan (Option A)||1,00,000 to more than 8,00,000||14-23||Not specified by the insurer. It will depend on the policy term, premium payment frequency, sum assured chosen, etc.||Benefits payable from the 5th year after the completion of the premium payment term 20-30% of the sum assured||Accrued Bonuses and Terminal Bonus, if any|
|Bajaj Allianz Young Assure Plan||105% of the premiums paid till death||10/15/20||Based on the chosen guaranteed maturity benefit, policy term, age, premium payment frequency and premium payment term||Guaranteed Maturity Benefit + Guaranteed Additions + Vested Bonus + Interim Bonus (if any) + Terminal Bonus (if any)|
Retirement brings a halt to the regular income that you earn during your working days. However, you can keep it intact even at that time by investing in a retirement plan while you are working. These are basically pension plans that also come with a life cover to secure the future of your dependents in your absence. Choosing the best retirement plan will help you beat the effects of inflation and live peacefully.
What are the Basics of Retirement Plans?
Policyholders of retirement plans are called annuitants who receive regular income to sustain their lifestyle. The premium payable for the plan goes on to purchase annuities, which you can receive at any of the intervals you want - Monthly, Quarterly, Half-yearly and Annually. With these plans, you will receive a guaranteed income from the Vesting Age you choose. The vesting age is the time from when you start receiving the annuity payouts. Usually, the vesting age starts from the 45th or 50th year of one’s life. The flexible premium payment terms - single, regular and limited - and tax benefits add to the cheer of investors putting their money in these plans. These plans come in the following types -
Note : Regular income payouts will happen from the chosen ‘Vesting Age’.
Which are the Best Retirement Plans?
Finding the best retirement plan is easy from the list shown in the table below. Check the details of the following retirement plans and see which serves your purpose the best way.
|Policy Name||Sum Assured||Minimum Purchase Price of Annuity (In INR)||Policy Term (In Years)||Entry Age (In Years)||Annuity Payout per Installment|
|HDFC Life Pension Guaranteed Plan||Immediate Life Annuity - NIL Immediate Life Annuity with Return of Purchase Price Variant - 100% of the purchase price of the annuity Deferred Life Annuity with Return of Purchase Price Variant - Higher of Purchase Price + Guaranteed Additions - Total Payment of Annuity Till Death and 110% of Purchase Price||Immediate Life Annuity - 42,076 Immediate Life Annuity with Return of Purchase Price Variant - 1,60,261 Deferred Life Annuity with Return of Purchase Price Variant - 76,046||10-20||Minimum - 30 Maximum - 85||Starts from INR 12,000 annually|
|Max Life Guaranteed Lifetime Income Plan||Immediate Annuity for Life with Death Benefit - 100% of Single/Top-up Premium, if any Deferred Annuity - Higher of - Single Premium + Top-up Premium ( if paid during the deferment period) + Accrued Guaranteed Additions and 105% of Single Premium + Top-up Premium ( if paid during the deferment period)||Starts from 12,000 per annum (Single Premium)||Minimum - 0-45 Maximum - 80||Starts from 12,000 per annum|
|Bajaj Allianz Retire Rich||Higher of - Fund Value as on the date of receipt of death intimation And Guaranteed Death Benefit at 105% of the Total Premium Paid, including the payment of the top-up premium till the date of death||Starts from 50,000 per annum (Regular and Limited Pay Premium Options) 50,000-1,00,000 (Single Premium Option)||7-30||Minimum - 30 Maximum - 73 Years||Higher of - Guaranteed Vesting Benefit and total fund value as on the date of death Where Guaranteed Vesting Benefit equals 101% of the sum of all premium and top-up premiums (if you have paid till the date of vesting)|
|PNB MetLife Guaranteed Future Plan||Limited Pay - 10 times the annualized premium Single Pay - 1.25 times the annualized premium||Single Pay - 2,00,000 Limited Pay - 12,000, if you get the policy through POSP, and 24,000 through modes other than POSP||12 to more than 18||Minimum - 0-6 years from the last birthday Maximum - 60 for policies bought through POS) and 55 for policies sourced through modes other than POS||Guaranteed income payout - Accrued Guaranteed Additions and Annualized Premium|
You may broadly know the instruments where these investment plans invest your premium. But it’s always better to know the detailsl. While ULIPs invest in equities, debts or a combination of both, endowment and money back plans do so in instruments (which could be bonds issued by the government, corporate, etc.) offering guaranteed returns.
Equity investing can be made in stocks of companies with different market capitalizations - small-cap, large-cap, mid-cap and even multi-cap.
Large-cap stocks come under the Top 100 stocks according to market capitalization. Stocks falling from 101 to 250 in terms of market capitalization are called mid-cap stocks, while those after are called small-cap stocks. Whereas multi-cap stocks invest across market capitalizations are thus considered the diversified lot.
The debt instruments involved in ULIP investments include bonds, debentures, money-market securities, etc.
Stock investments are considered riskier than their debt counterparts. Any economic, international and political development can cause volatility in stocks, leading to ups and downs in their prices and impacting the returns of investors. Favourable movements take stocks to new highs, while unfavourable ones reduce their value. So, the risk element and return probability remain high when investing in stocks. But the risk-return ratio can still differ across stocks because of the variation in the company’s fundamentals, operating performance, etc.
Multi-cap stocks give you the diversification you seek in equity investments. As investments here are floated across stocks of different market capitalizations, the dip in some stocks can be greatly compensated by the rise in others.
Large-cap stocks invest in companies with strong business fundamentals and are a good bet for long-term investments. These are blue-chip stocks where the return may not be very high but would remain stable. Customers with a moderate to high-risk appetite could find large-cap stocks suitable to invest in.
Mid-cap stocks invest in companies falling right after large-cap ones in terms of market capitalization, as pointed out above. The risk element when investing in mid-cap stocks remains higher than that of their large-cap counterparts. On the return front, mid-cap stocks can offer more.
Small-cap stocks invest predominantly in small-scale companies offering immense potential for growth. However, the risk element involved in these stocks is very high. The return from these stocks can be very high too when the broader market does well and not so when it does not.
ULIPs invest in debt instruments such as bonds, debentures, etc, as stated above. A bond is a contract between the issuer and the buyer where the former pays a fixed interest to the latter at regular intervals. Bond issuers can be government, agency, corporations, etc. Various types of bonds are - Zero-Coupon Bonds, Corporate Bonds, G-sec Bonds, Inflation-linked Bonds, Sovereign Gold Bond, RBI Bonds and Convertible Bonds. Let’s talk about these types.
Zero-Coupon Bonds - These bonds are issued at a discounted rate from the face value but are redeemed at the latter at maturity. So, if the bond with a face value of INR 100 is issued at a discounted rate of INR 95, you will get the principal amount at INR 100 only, along with accrued interest.
Corporate Bonds - Bonds issued by companies to raise money from the public are called corporate bonds. Companies pay back the borrowed money along with interest.
G-sec Bonds - These bonds are issued by the government for specific periods and are considered the safest to invest in.
Inflation-Linked Bonds - The principal and interest of these bonds are indexed according to inflation. So, the money receivable from these bonds is adjusted to inflation.
Sovereign Gold Bonds - The Government of India issues these bonds to help you buy digital gold. Investment in these bonds helps you make the most of gold appreciation and earn an interest of 2.50% per annum.
Convertible Bonds - Investing in these bonds give you the option to convert your bonds into stocks issued by the same company. The price at which shares are issued is called conversion price, which is calculated based on factors such as the existing book value, market price, etc. Usually, the conversion price remains higher than that of a convertible bond, allowing you to make profits.
RBI Bond - The Government of India has started issuing Floating Rate Savings Bonds (Taxable) 2020 from July 1, 2020, to help resident Indians and Hindu Undivided Families (HUFs) to invest in the same. The issue price of the bond is INR 1,000, while there is no maximum investment limit set for this bond. The bond comes with a lock-in period of seven years from the date of its issuance. You will get the accrued interest on your bank on the first of Jan and July every year.
Debentures are movable properties that remain in the form of a certificate of indebtedness of the company. These instruments come with a fixed rate of interest that you will get every year. Debentures are classified based on convertibility, security, redemption and registration. Following are the types of debentures where your money could be routed via ULIPs.
Non-convertible Debentures - These debentures cannot be converted into preference or equity shares. You can redeem these debentures only upon maturity.
Partly Convertible Debentures - A part of these debentures gets converted into shares upon the notice of the issuer in the future. The conversion ratio is decided by the issuer at the time of subscription.
Fully Convertible Debentures - These debentures can be converted fully into equity or preference shares after a specified period at an exchange rate. In this case, debenture holders no longer remain the creditor of the company and rather become shareholders.
Optionally Convertible Debentures - These debentures give holders the option to convert their holdings into equities. The conversion price needs to be mutually agreed upon between the issuer and debenture holders.
Secured Debentures - Investing in these debentures can help you recover the interest and principal amount in case the issuer defaults on the same. The reason being there is a charge on the fixed assets of the company. And in case of default, you can sell the assets to recover the borrowed amount.
Unsecured Debentures - These debentures remain unsecured as one cannot sell any asset to recover principal or interest in case the company defaults on either of them.
Redeemable Debentures - These debentures offer investors the option to redeem on demand, after serving a notice, at a fixed date or by using the system of periodical drawing. Post redemption, these debentures can be either cancelled or reissued.
Perpetual or Irredeemable Debentures - Issuers won’t have a fixed time to repay their debt raised through these debentures. Debenture holders cannot ask the company to pay interest or principal unless it defaults on the payment. In case the company goes into liquidation, it will have to pay all debenture holders whether they hold redeemable or non-redeemable securities.
Registered Debentures - These debentures are registered for an individual whose name appears on the debenture certificate. Transfers of these debentures can be made the same way as shares through proper instruments such as stamp duty.
Bearer Debentures - These debentures can be transferred merely by delivery and are payable to the bearer of the instrument.
These are debt instruments that companies issue to improve their liquidity position. The best part about these instruments is their ability to get converted into cash. Fixed returns and increased security call for investment in these instruments that can be any of the following -
Certificate of Deposit - Banks and financial institutions issue a certificate of deposit (CD) that offers a fixed rate of interest on the invested capital. CDs can mature in 7 days to 3 years.
Commercial Paper - Large companies issue promissory notes i.e. commercial paper to meet their short-term business needs. CPs come with a fixed maturity period of 7 to 270 days.
Treasury Bills - These are issued by the Reserve Bank of India (RBI) on behalf of the Central Government to raise money. Treasury bills come with maturities of 91 days, 182 days and a year. These bills are offered at a discounted rate of face value. However, investors get the face value at maturity. The rate differential is the earning for the investor. As they are backed by the Government of India, they are considered the safest investment for the short term.
Repurchase Agreements - As per these agreements, one party agrees to sell the security to another with an eye on buying it back from the buyer at a later date. The seller buys the security at an amount including the interest rate, which is called the Repo Rate.
Banker’s Acceptance - It is a financial instrument introduced in the name of a bank. The issuer of this instrument pays a specified amount to the holder within 30-180 days of its issuance.
Individuals aged above 18 and up to 65 years can apply for these investment plans by submitting the following documents.
Identity Proof - Aadhaar Card/Voter ID/Passport/PAN Card
Address Proof - Aadhaar Card/Voter ID/Passport/Any other document issued by the central government
Income Proof - For salaried - Latest Form 16, Bank statement of the last 3 months showing the credit of salary, Income Tax Return for the Last 2 Year For self-employed - Form 26AS, Income Tax Returns of the last 2-3 years along with income computation, profit & loss account and audited balance sheet for the last 2 years
Applying for investment plans online at Wishpolicy makes sense because of the following credentials of this IRDAI-certified portal.
Offers Scope for Effective Comparison - Our neutral comparison engine hits the right balance between a wide-range of products and relevance to your needs. You can check and compare a wide range of life insurance cum investment plans in terms of sum assured, policy term, premium payment, maturity proceeds, etc. With such a comparison, you could achieve your financial goals easily.
24x7 Dedicated Customer Support Services - The moment you apply for an investment plan on our portal, we evaluate your details, contact you and forward your application to the insurer. Once the application is approved by the insurer, we’ll intimate you about the same. We’ll deliver the policy document to your email and in-person too. But we don’t stop merely at the issuance of the policy! We go on to extend our helping hand to even when your nominees are about to claim upon your unfortunate demise. We also provide you the help when claiming maturity benefits. At every stage of the investment plan, we’re with you!
Insurance Tie-ups - We have tied up with 20 plus insurance companies that offer these investment plans. The list of top insurers includes HDFC Life, Bajaj Allianz, Canara HSBC OBC, PNB MetLife, Aviva Life, Aegon Life, Max Life, etc.
Customer Trust - Our impressive and undeterred services have taken our ‘Happy Customer’ count to more than 29 million till now. You could also join this elite list.
It takes just a few steps to choose and apply for your preferred investment plan at Wishpolicy:
We will contact you and send your application to the insurer for approval. Once approved, you will be notified about the same on your email ID and mobile number. A few days later, you will get the policy document on your email ID as well at your doorstep.
Have a query? Our Policy Experts have the answer!
Both are Life Insurance Plans, but with one key difference – Only Death Benefit VS Life Cover plus Returns at maturity. Term Life Insurance is a pure insurance product where there is a payout only in case of death of the insurer within the Term of the Policy. The benefit here is low premiums, but it cannot be used as an investment tool. Guaranteed Return plans provide the Sum Assured as a life cover, in case of death within the policy period; and in case of no death, give the Sum Assured as a payout at the end of the Policy Period. So, it can be used as an investment tool. One can opt for Guaranteed Plans, where payout is structured as a lumpsum or in parts.
A Unit Linked Insurance Plan (ULIP) is a participating policy where the policy holder is eligible to get a part of the profits or bonuses earned on the invested insurance amount, but there is no guaranteed return. A Guaranteed Return Plan is a non-participating policy that does not give you any additional bonus, but guarantees return as the sum assured payout. ULIPs are good for those who are okay with taking moderate risk in lieu of the potential for a higher return. Guaranteed Return Plans are good for those whose main objective is to secure their financial future by insulating themselves from market forces and uncertainty.
Both are Investment Plans with some small differences – An endowment plan is preferred by those who are looking at their policy as a long-term wealth accumulation tool or for long term goals. This is because the sum assured is paid as a lumpsum only at the end of the tenure. Typically tenures range from 10 to 35 years. A Money-back Plan are for relatively short-term investment goals as the sum assured is paid in parts at regular intervals. Tenures range from 5 to 25 years. Also, Endowment Policies can be used as a security for loans, as the sum assured is intact for the term. This is not the case for Money-back Plans, as the sum assured balance becomes smaller with every payout.
As you must have already noticed, there are many types of Investment Plans, with several differences and feature overlaps. This can be confusing and you might miss out on an option that might be perfect for you. WishPolicy is your go-to Insurance Companion, partnered with 20 Top Insurance Companies, giving you the widest choice. Our Policy Experts help you understand and compare policies in detail. Their neutral advice can empower you to make the right choice. WishPolicy also assists you with processing, post-purchase and claims support.