Investment Plans are a combination of both investment as well as insurance. A part of the premium you pay is used to provide you insurance coverage (Life cover) and remaining part is invested in the financial instrument as per your risk taking capacity. Such plans help you fulfil your Short-Term as well as Long-Term Financial Goals. Investment Plan is a good option if you want to enhance your wealth and save taxes.
There are usually two types of Investment Plans:-
Your Short and long term goals such as Child's marriage, education, etc can be fulfilled in a planned manner
Returns on investment plans are usually better if you consider post tax yields compared to other investment options (especially in Unit-Linked insurance Plans)
You get tax deduction for the premium you pay under Section 80C and the money you realise on maturity is tax-Free under Section 10 (10)D of the Income Tax Act
You can add riders like Critical Illness, Accidental death, waiver of premium, etc.
You can also avail a loan on the investments incase you need money at a later stage. Rate of interest differs from company to company.
You get benefit of saving your money for future needs as well as increasing your wealth by investing in the stock market
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