The period of uncertainty moves investors close to investments in Safe Heavens. One can choose many options from Financial to Physical Assets. Among Financial investments, options vary from post office schemes to GOI bonds or PSU bonds; however, all these options are taxable, making it unattractive post taxes. Physical assets like Gold and Silver become darling for investment as it gains rapidly in War like situation as today. Unaware of the right products, people make abrupt investment choices and regret them later. We are bringing you options of investment that should be considered at turbulent times, which can be part of achieving your financial goal. You always have some goal that requires a fixed amount after a period by investing a lumpsum amount with guaranteed tax-free returns. These are single premium policies by life insurance companies, which work like any Debt instrument with a fixed maturity after a specified period. The following features of the scheme will give you insight into the product and we are confident that many of you will find it suitable for your portfolio of financial assets.
Guaranteed Returns available: Regular Returns or Cumulative option- The insurance companies offer two kinds of plans- one where guaranteed returns are paid regularly for a limited period or a lifetime and another where an assured amount is payable on maturity. These plans could suit many who wish to invest an amount unaffected by uncertain factors like the stock market, interest rate fluctuations, etc., yet want some life cover. The plan is convenient for retirees who can link the investment to their retirement as the regular plan has an option of deferment of returns, which enhances the outflows.
Give you tax-free Returns with Life Cover: The guaranteed returns after a chosen period give you the benefit of attractive tax-free returns with the life cover. One can select a maturity period from 5-20 years and the higher the maturity period, the higher the returns. Notably, the tax-free returns accrue under 10(10) d when the life cover is ten times of premium paid, enabling a decent life cover along with reasonable returns. A ten-year product can fetch you a tax-free return of around 5% pa, which is better than any available financial instrument.
Choice of Riders to enhance the coverages: The plans are available, giving riders additional coverage over and above life covers such as Accidental rider and Critical Illness. These benefits provide you a lump sum by the insurance company as the insured is detected with any critical insurance and meets with an accident.
Multiple Tenure options are available: One can choose a tenure that is best suited for achieving the financial goal. A plan that offers regular returns could be worthwhile for someone who would retire after five years and with a one-time investment, it could guarantee a taxable return of 8% p.a. for a lifetime. However, the life cover isn't significant in these plans as it offers a life cover of 125% of the premium. This gives you assured cash flow along with the pension to provide you with an enjoyable life.
These plans have gained popularity in the last few years, especially whenever there are uncertainties in the domestic and international economy. The schemes are safe as reputed Insurance Companies have their plan, which the regulator overlooks to maintain the safety of the funds. The following factors should prompt you to add a single premium policy to your portfolio at the right juncture of your life.
Hassle-free policy as you don't have to make repeated payments every month or year
No worrying about lapses
Convenient and advantageous to those with no steady income flow