Investment Plans

Investments, in finance, as we know, are allocations of money with expected future benefits in the form of returns on the investment made. Investments are of most importance because they help build a financial corpus. The concept of building a corpus is no secret because money is that one resource which is required at all stages of life to sustain. Furthermore, these investments are beneficial in the future: from covering a child’s education and marriage to accumulating monetary resources for after retirement. Therefore, finding out different types and ways of investment can help build one’s investment strategy as per their requirements.


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There are more than sufficient options and avenues to find your tailor-made investment plans to build your funds. However, all the available avenues complicate the choosing procedure; in this article, you will learn about one such avenue- Investment Plans-and how to make use of this simple investment option to grow your funds.

All about Investment Plans

First and foremost, let us understand briefly what an investment plan is, its types, its features and its benefits. Then we will learn about some of the best investment plans offered in the market; additionally, some objectives to keep in mind before investing in one such plan, documents necessary and other eligibility criteria.

What are Investment Plans?

Investment Plans are among the easiest ways to invest hassle-free and accumulate a solid financial base over time. This is because varied plans offered by life insurance companies act as investment instruments that can be benefitted from upon investment. The most advantageous aspect of investing in such simple plans is that it not just aids the accumulation of wealth but also provides comprehensive life coverage simultaneously.

Types of Investment Plans

United Linked Insurance Plans (ULIPs)

  1. ULIP stands for Unit Linked Insurance Plan. This unique plan provides benefits of two separate types of plans in one, i.e., it is a mixture of a life insurance policy and an investment plan.
  2. This works in such a manner- a portion of the premium paid is used to provide a sum assured as deducted by life insurance policies and the other portion is applied for investments in the market.
  3. The latter portion can be used to invest in bonds, market funds, equities, debts and hybrids etc. They can be tracked as Net Asset Value and are meant to be transparent.
  4. The coverage, however, will depend on the kind of policy picked: Survival benefit offers maturity benefit and the Death Benefit provides the benefactor with the sum assured.

Life Insurance Investments

1. Endowment Plan:

  1. This traditional investment product is again a mixture of coverage and investment. A part of the premium payable contributes to the sum insured in insurance plans and the other part goes into investments.
  2. The difference, however, is that the portion of funds going into investment is not linked to the market.
  3. The funds divided are as follows- A part of premium as an investment and the other to cover for risks.
  4. In here, a guaranteed return in profits on maturity is assured and in situations where the policyholder dies before maturity, the benefactor is provided with the sum assured.

2. Money-Back Plan/Guaranteed Return Policy:

  1. Guaranteed Return Policy plans are those investment options that are provided by life insurance companies. These combine the benefits of an insurance policy with the flexibility of investments.
  2. A percentage of the sum insured is given back at calculated time periods as ‘Death Risk’ coverage.
  3. The policyholder will receive money periodically after paying premiums for a pre-decided number of years and on maturity, the remaining sum insured will be reimbursed.

Features to Observe

The features to observe are clearly mentioned below:

  1. The risk involved in a particular investment plan.
  2. Transparency in the flow of cash, returns, profit accumulated, and performance (long-term or short-term) is important so as to determine the returns plausibly.
  3. The charges are applicable to managing the investment portfolio.
  4. The plan offered and the fund house offering it, their claim settlement ratio and the portion of the fund invested etc.

Benefits of Investing in a Plan

The benefits of investing in a plan are:

1. Accumulation of wealth
In case you want to accumulate wealth over the period, investing in life insurances is a sure-shot way. These plans cover for various expenses throughout one’s lifetime such as a child’s education and marriage, an individual’s retirement and pension etc.

2. Financial Security
The major benefit of investing in life insurance policies as an investment option is that it not only provides the opportunity to accumulate wealth over time but also provides life coverage. Other benefits like Survival benefit and death benefit are offered along with it. In the long term it will pool enough funds to provide financial security to just an individual but also their family.

3. Retirement Security
As mentioned, different aspects of life and expenses attached can be met with if such investments are opted for. This also includes Retirement security, especially financial security. An individual can deliberately create a corpus for retirement too; the accumulated funds can then be used for later stages of life.

4. Coverage for Death Risk
Most investment options do not offer to cover for death risks and therefore, it makes this investment plan a choice better than many others. It was of great importance to be able to provide and take care of the needs of family members even in your absence. That’s precisely what death coverage offers. The sum insured is given to the nominee or the benefactor in the event of death.

5. Tax Benefits and Savings
Another major benefit apart from risk coverage or funds accumulation is that these investments help save in income taxes. Under section 80C and 10(D) of the Indian Tax Act the premiums payable etc. will be exempted from tax.

6. Flexibility
Investing in Life insurances has basic dual benefits; that is the flexibility to invest money for returns and be insured for the duration. This feasible investment option—investing in life insurances—provides the benefit of two in just one plan.

7. Facilitates Loan proposal
Lastly, life insurances as an investment tool also help in acquiring a loan. This is because a life insurance compensates for security or collateral while obtaining a loan. But this will depend on the coverage of the plan, the premium payable, and the type of loan, its eligibility criteria and the loan amount.

Best Investment Plans with High Returns

Here are some of the best monthly investment plans or annual investment plans in the market that offers high returns. Some of the best investment plans for 1 year, for 3 years and for 5 years and above are as follows:

  1. One of the best HDFC plans for a 5-year term and above is HDFC Life Click2invest. This ULIP plan can be availed by people of the age group of 30 days up to 65 years with a maximum maturity age of 75 years. There are 8 fund options offered for the policy duration of 5-20 years
  2. Some best plans for 7 years and above are Bajaj Allianz Fortune Gain and Bajaj Allianz Retire Rich. Bajaj Allianz Fortune Gain Unit-Linked Insurance Plan can be purchased for people of 1 year to 63 years. The maximum maturity age is of 70 years and lasts up to 30 years.
  3. On the other hand, Bajaj Allianz Retire Rich is a unit-linked pension plan which offers 3 fund options. The entry age is 30 to 73 years. Along with a maximum policy term of 30 years, the maximum maturity age is of 80 years.
  4. Plans with a term of 8 years onwards leading up to 25 years (minus the child’s entry age) are the SBI Life-Smart Scholar. This Unit-linked child plan for children of the age of 0 to 17 years and for adults from 18 years to 57 years.
  5. Among the best HDFC investment plans in 10 years, HDFC SL YoungStar Super Premium is yet another child-linked unit plan puts forth 4 fund options. The policy term will last anywhere between 10 to 20 years.

Other plans with policy terms of 10 years and above are SBI eWealth, ICICI Pru Smart Life, Bajaj Future Gain, Aegon Invest, Bharati AXA eFuture Invest, Future Generali Easy Invest Online Plan, and Aviva iGrowth.

  1. SBI eWealth: Policy term- 10 to 30 years, Fund option- 4 years, entry age is of 18 to 50 years
  2. ICICI Pru Smart Life: Policy Term- 20 to 54 years and a maximum entry age of 20 years to 54 years. Policy type- ULIP
  3. Bajaj Future Gain: Policy term- 10 to 25 years with a maximum maturity age of 70 years. There are 7 funds option and can be availed from 1 to 60 years of age.
  4. Aegon iInvest: This Unit-Linked Investment Plan is for people from 7 to 55 years. Policy Term- 10 to 20 years.
  5. Bharati AXA eFuture Invest: Policy Term- 10 years. It can be purchased by individuals of 18-60 years and the maximum maturity age is of 70 years.
  6. Future Generali Easy Invest Online Plan: Eligible age group: 0-60 years. Policy term- 10 to 20 years. 5 fund options are provided with this Unit-linked policy. The maximum maturity age is of 18 to 70 years.
  7. Aviva iGrowth: Policy Term: 10 years, 15 years or 20 years. Three fund options along with a maximum maturity age of 80 years. It can be accessed by individuals of 30 to 73 years.

How to Invest in a Plan through the Online Method?

In today’s world, investments have become quick and convenient. The credits lie with the development of online modes of buying, selling and investing. Furthermore, the presence of almost all investment companies online offers a multitude of choice at one’s fingertip. The scope for profits to has increased considerably; therefore choosing the right policy after comparing them as per your requirement.

  1. Before you decide upon a plan to invest, compare similar kind of plans offered by different companies and institutions.
  2. This process is fairly easy with different investment comparison tools available online at insuring company’s website or any other web aggregator’s site.
  3. After having compared their features and benefits check for investment quotes offered. Once done, pick a plan that suits your requirement.
  4. Visit the respective insuring company’s website and fill in some basic details asked for.
    Select the plan required and fill up the proposal form.
  5. After the proposal form has been filled, upload soft copies of all relevant documents.
  6. Last but not least, clear out the premium payable as specified and checkout.

Things to Keep in Mind Before Investing in a Plan

The pointers provided below are for the benefit of the investors to help decide their near-to ideal plan. These pointers are to be kept in mind before investing in one such investment plan.

1. A number of people:
The number of dependent people in a family influences the coverage size of the policy and the relevant investment to be made. Therefore, keeping in mind the needs and the amount necessary to be financially secured has to be considered.

2. Expenses

a). Ongoing incurred and other expenses:-
Depending on your lifestyle and the ongoing cash flow of income and expenses, choose an appropriate plan to be able to accommodate future needs without having to compromise on the present expenses.

b). Future Expenses:-
Though predicting future expenses are required to choose a policy in the first place, it is difficult to actually accomplish it. The rising needs and expenses, as well as inflationary effects, make it hard. It is always ideal to choose a policy that provides a higher sum than estimated.

c). Other major expenses:-
Any other major expenses like education and marriage plans for yourself or your children, other relevant requirements and that will incur expenses should also be considered while investing.

3. Coverage provided and the sum insured
Inclusive to the number of dependents, looking for a policy that covers all their basic requirements and needs irrespective of life’s uncertainties should be taken care of. An investment plan that targets an insured sum sufficient to do so will be necessary. If required the cover of a policy can be increased as specified by the provider.

4. The required goals
The first actual pointer to consider is the motive and the financial objectives you have. Clarity on a different aspect of investment like long-term or short-term, high/medium/low-risk plans, assured returns or not etc. have to be thought of. This will help have a defined goal and will help grow your corpus effectively and steadily.

5. Budgeting and planning funds
While planning on the funds, budgeting is important. Like including any debts or prevailing loan, and EMIs etc. This is to ensure your ability to repay back timely as these will be held against you while procuring a plan.

6. Insurance factors

a). Alternate Income Provision:
Having a stable income source should be considered a must for investment; this is to ensure that you are financially safeguarded during untoward happenings. These also include factors like disabilities and death by accidents, as well as retirements etc. that might lead to such situations. You should opt for a policy that is stable and supportive.

b). Another source of regular income:
These are basically investments made to cover for family members and other dependents.

c). Premiums payable:
The premium payable plays a huge role in planning, purchasing and securing a policy. Choosing one wisely as per requirement and coverage provided is a must. Calculate premiums to compare and contrast for different policies before deciding on one. Ideally, start with a premium that’s affordable and then increases as you go, if required.

d). Coverage Provided:
The coverage provided is the crux of the matter. With each shortlisted policy thorough research must be done before opting for your final plan. The coverage should be as such- covers for your unique investment needs and requirements.

e). Available Riders:
Riders are simply the add-ons that are obtained over a basic policy to enhance the coverage offered by the primary policy. As the coverage provided might not necessarily cover for every important requirement. Know the features and extended coverage provided by the add-on before choosing it.

f). Payout Types:
The payout mode is an important aspect to consider too. Some offer regular pay-outs whereas others as and when required. The type of payout that suits you the best for investment purposes has to be chosen.

g). Increase on the decrease in premium:
As recommended, opting for a plan with lower cover and gradually increasing with a rising income can be done.

7. Expected Returns and more:
The end result of any investment is the returns they offer, therefore, it is of utmost importance to choose one that provides a good and expected return. Expected returns though depend on one’s appetite for risks—the more the risk, the higher can the scope of return get. Equity mutual funds are an example of such an investment. Irrespective of high-risk plans or balanced plans, selecting a plan that generates a healthy return best suited to your needs is the way to go.

Eligibility Criteria and Documents Required

To start investing in various plans these are the common eligibility factors that an individual has to meet up to:

  1. Age criteria are the most basic and common eligibility factor and it should be mentioned in the policy wordings. The age parameter had to be met with to purchase a plan.
  2. Most plans also come with an upper age limit, which is basically the maximum age allowed to invest in a plan. One cannot bypass the maximum age limit unless specified in the plan.
  3. The premiums payable and the payment term and mode have to be adhered with and in case of absence of it, the plan can be terminated.

The documents required to purchase investment plan is as follows and will have to be submitted at the time of purchase compulsorily:

  1. In a broad manner, these are following documents—ID proof, Address proof, Age proof and lastly, income proof.
  2. You can use documents like PAN card, Aadhaar card, and ration card etc. for ID proof. As for address and age proof, you can use Driving License, Voting card and Passport.
  3. For age proof, the documents required are Salary slips, bank statements, and income tax returns can be used.


Investment plans are not just a convenient way to accumulate desired wealth but are also a comprehensive instrument to blend the flexibility of investments with coverage. ULIPs (Unit-Linked Insurance Plans) are among some of the most accessed plan types which divide a portion of the premium paid for sum insured and the other to invest in the market. Many such plans are available in the market; some are monthly and some are annual; for example HDFC monthly investment plan and such. Choose your plan type and investment wisely depending on the returns, the coverage etc. i.e., after assessing the parameters mentioned above.