What is an Investment Plan?
An investment plan is a financial instrument that helps an investor create sustainable wealth for their future and meet their financial goals by investing in a systematic manner. By investing in these plans an investor can get guaranteed returns, market-linked returns, or a combination of both, depending upon the nature of the plan chosen for investment. To simply put, an investment plan is one of the best and most convenient ways of appreciating wealth over a period of time.
How to Choose an Investment Plan?
Following are the things that you should keep in mind when choosing an investment plan:
- Analyse Goals: Analyse your financial goals and requirements
- Create a Strategy: Create a strategy to choose the best investment plan as per your requirements
- Evaluate Policy Term: Evaluate the term you want to make investment for, keeping in mind several factors such as current liabilities, number of dependents, etc.
- Compare Features: Compare several features, cover, riders, premium, payout type, returns etc. before investing in a plan
- Diversify Investments: It is recommended to go for a diversified portfolio. This means, instead of investing in one investment plan, you must choose multiples investment plans
- Monitor Investments Periodically: Review your investment plans periodically
How to Buy an Investment Plan Online in India
Almost all the investment companies in India have an online presence. Buying an investment plan online is not only easy, but beneficial too. It saves your time, as well as evades the paperwork, thereby making it hassle-free. To buy investment plans online in India, you must follow the steps given below:
- Fill Your Details
Enter your personal details such as name, mobile number, gender and date of birth. Click on the ‘View Instant Quotes’ button to see available quotes.
- Enter Basic Details
Log in to the investment page. Then enter the basic details such as income, date of birth, etc.
- Get a Call Back
Enter the term that you want to buy the policy for, as well as the amount that you want to invest.Once you fill the lead generation form, our financial experts will soon get in touch with you.
Kindly note that when buying any investment plan, you will be required to complete the KYC, for which it is recommended that you keep all the important documents handy.
Documents Required for Buying Investment Plan
Following are the documents required to purchase an investment plan:
- Income Proof: Recent salary slips, bank statements, income tax returns, etc. along with a passport size photograph with relevant medical records.
- Address proof: You can use license, Aadhaar card, passport, or Voter ID card as address proof.
- ID Proof: PAN card, Voter ID card, Aadhaar card can be used as ID proof.
- Age Proof: You can use Aadhaar card, Voter ID card, Driving License or passport as age proof.
Benefits of Investment Plans
Protection of Loved OnesAn investment plan provides you the dual benefit of life cover as well as returns. Simply put, in case of anything unfortunate happens to the life assured, then his/her family will receive the sum for which they were assured, plus the fund value, which can either be single or in monthly/quarterly/half-yearly payments. With the returns, the family can meet the requirements and monetary goals even if they are unable to earn a living or in case of misfortune event of death of the breadwinner of the family. Investment plans play a significant role in ensuring the financial protection of your loved ones even in unfortunate situations.
Wealth CreationNot only savings, but investing in the right option helps you multiply your wealth too. It allows you to create wealth in the long term by making a disciplined as well as periodic investment. One of the sure shot ways to accumulate wealth over a period of time is investment plans with life insurance. You, as an investor, can choose the best option on the basis of your risk, disposal amount, as well as returns. You might require funds in the future for a child's education, marriage, pension, retirement, etc. when these plans would come into use. Investment plans will help you create wealth for your future purposes.
Life CoverEvery investment option does not offer death risk coverage option, but investment plans by life insurance do include death coverage. This lets you to take care of your family even when you are not there. In this case, the nominee gets the sum assured in the misfortune event of death of the policyholder. Investment plans allow you to secure yourself as well as your family members against uncertainties of life and prevent you from facing financial inconvenience in adverse situations. Life cover under investment plans is the ultimate support you need apart from the investment to prevent financial struggles even in the most testing times.
Tenure FlexibilityThere are several investment options in India which offer utmost flexibility when it comes to the money as well as the duration for which one needs to invest. In Investment plans, you get the option to choose the investment tenure as per your specific requirements. If you want to invest for a short period, you can choose a short-term investment option. Similarly, if you want to invest for a longer period, you can choose an investment option that lets you invest and accumulate wealth for multiple years.Tenure flexibility helps investors celebrate their wealth whenever they want.
Retirement SavingsInvestment plans allow you to save enough funds that can be used after retirement. This way, you as an investor, need not depend on anyone else even after your retirement. You can be financially independent as you have the funds that you saved in the previous years. Moreover, with investment plans by your side, you can live your life like before, without feeling constrained or burdened due to financial instability. With the best investment plan you can enjoy an income post your retirement while dealing with unexpected eventualities after your retirement without stressing for a financial balance.
Tax BenefitsOne of the major benefits of having investment plans is that they allow you tax deductions under Section 80C and 10(10D) of the Indian Income Tax Act. You can avail benefits on the premiums paid as well as payouts. While Section 80C allows premium paid to be deducted from the total income up to Rs. 1.5 Lakh, thereby reducing total taxable income and the actual tax paid, Section 10 (10 D) allows tax exemption on survival benefit, maturity benefit, and death benefit. So, investment plans not only help you save or multiply money, but offer even more financial protection in the form of tax benefits.
Loan FacilityLife insurance is a versatile investment. Apart from protecting the assured, it also acts as a loan facilitator. However, that is completely based on the coverage taken by the life assured, the premiums paid by him/her, the eligibility criteria for loan amount, and other factors. Taking a loan against your life insurance policy or your investment option can help you gain a high loan value. Quick availability of loan, loan security, and low interest rate are key benefits as well. It is advised to check the availability of loan facility against the investment option beforehand. An investment option with a loan facility will secure yourself financially and attain your goals without any financial compromises.
Any person who is a resident of India and is aged above 18 years can buy an investment plan of their choice. When buying an investment plan, you need to fulfil the following eligibility criteria
Popular Investment Plans Insurers
|Name of the Company||Assets Under Management 2020 (in crore)|
|Max Life Insurance||₹69,109.79|
|HDFC Life Insurance||₹1,28,173.98|
|Tata AIA Life Insurance||₹31,195.48|
|Pramerica Life Insurance||₹4,864.55|
|Exide Life Insurance||₹15,589.14|
|Reliance Life Insurance||₹20,288.79|
|Canara HSBC Life Insurance||₹15,396.44|
|Bajaj Allianz Life Insurance||₹56,185.89|
|Aegon Life Insurance||₹2,564.10|
|ICICI Prudential Life Insurance||₹1,52,203.27|
|Aditya Birla Sun Life Insurance||₹41,112.33|
|Aviva India Life Insurance||₹9,179.29|
|Bharti Axa Life Insurance||₹6,962.08|
|PNB MetLife Insurance||₹22,477.56|
|Star Union Dai-ichi Life Insurance||₹9,207.49|
|Life Insurance Corporation of India (LIC)||₹30,70,852.47|
|IndiaFirst Life Insurance||₹14,540.60|
|Ageas Federal Life Insurance||₹9,553.07|
|Kotak Life Insurance||₹34,727.20|
|Future Generali Life Insurance||₹4,387.07|
|SBI Life Insurance||₹1,62,289.36|
|Shriram Life Insurance||₹4,880.33|
|Sahara India Life Insurance||₹1,407.04|
|Edelweiss Tokio Life Insurance||₹3,126.77|
Types of Investment Plan
Unit Linked Investment PlansUnit Linked Insurance Plan (ULIP) is a mix of investment and insurance. In this plan, a part of the premium is deducted as insurance, and the other part is invested in the market. Funds are invested in bonds, market funds, equity, debts, as per the investor. You can evaluate and track the investment of your funds as Net Asset Value (NAV). a survival benefit, you get maturity amount, whereas as a death benefit, the nominee will receive a sum assured.
Endowment PlansEndowment plan is a life insurance contract that pays in lump sum after a specific period of time on maturity, or on death. Generally, the maturity period is 10 yrs/15 yrs/20 yrs up to a certain age limit. This plan also pays you in case of a critical illness. A combination of coverage and investment, the premium paid for this plan is divided into two parts. One is used as an investment and the other as risk cover. On maturity, returns are less, but guaranteed. In case of death, the nominee gets sum assured.
Money-Back PlansMoney Back Plan is a traditional savings-oriented plan that is offered for a stipulated time period to provide death risk cover and returns. During this term, regular payouts are made, which are calculated as a percentage of the sum assured. These are done if the assured individual is alive then, and the remaining sum assured is paid on maturity. But, in case, the life assured dies during that term, then the full sum assured is paid irrespective of money back benefits that are already paid.
Retirement PlansA retirement plan, also known as a pension plan, is a plan wherein you can invest a portion of your pay and enjoy a normal salary after retirement when you suddenly stop receiving salary. It helps you accumulate your salary over a long period of time in order to have a secured financial future. There are 8 types of pension plans in the market to cater different requirements of individuals, including deferred annuity, immediate annuity, annuity certain, and life annuity.
Child Investment PlansA child investment plan is a mix of investment and insurance that helps you to meet the rising cost of your child’s education as well as other requirements at the right age. So, instead of buying child education plans, you can choose to buy a child investment plan in order to secure and protect the future of your child. The plan offers life cover as lump sum payment at the time of maturity. Also, these plans offer coverage to your child with flexible payouts at intervals for child’s education.
National Saving CertificateNational Saving Certificate or NSC is a government-backed fixed income investment scheme that can be purchased by any Indian resident from a post office in India. These are issued in denominations of Rs. 100, Rs. 500, Rs. 1,000, Rs. 5,000, and Rs. 10,000. There is a fixed maturity period of 5 years for NSC, and there is no restriction on the maximum limit for its purchase. But note that only investments up to a maximum of Rs. 1.5 Lakh are eligible for tax benefits under Section 80C.
National Pension SchemeNational Pension Scheme is a long term investment scheme for retirement, regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and central government. Available for all citizens, NPS is valuable for those working in the private sector and need regular post-retirement pension. Flexible across all occupations and locations, NPS offers various tax benefits as well under Section 80C and Section 80CCD (1B).
Mutual FundsMutual fund is an open-end professionally managed investment fund that collects money from different investors (individuals and institutional investors) to buy securities. The pooled investment is managed by a fund manager, who is a finance professional. he/she buys securities like bonds, stocks, etc. as per the investment mandate. With mutual funds, you can choose to invest periodically in small amounts, which are bought and sold as per the prevailing Net Asset Value.
Tax Saving Mutual FundsOf all the mutual funds, there is one that offers tax benefits to the investor, which is Equity-Linked Savings Scheme (ELSS). As it is a long term equity mutual fund, it helps you maximise your returns over a period of time. The minimum lock-in period for this mutual fund is 3 years and minimum investment is of Rs. 500. ELSS offers you long term capital growth even in case of market volatility. By investing in ELSS, you can avail tax deductions of up to Rs. 1.5 Lakh in a year, under Section 80C.
BondsBond is one of the types of debt investments that allows the investor to loan funds to an entity, which can be an organisation or the government, that is looking to borrow money for a specific pre-decided term, at a particular rate of interest. The money is lended in exchange of a bond, in return of which, the issuer is obliged to pay interest on the principal amount the issuer shall repay the borrowed money with a fixed rate of interest on that amount. These days, variable ROI is also common.
Public Provident FundOne of the most popular savings and investment options in India, Public Provident Fund (PPF) is a long term investment option that offers an impressive rate of interest and returns on the invested sum. The good news is that the interest earned and returns will not be taxable. In fact, you can also avail tax benefits under Section 80C of the Income Tax Act, 1961. A PPF has a minimum tenure of 15 years, up to 5 more years. Also, note that the government generally reviews the interest rate on the PPF after every quarter.
Fixed DepositFixed deposit or term deposit is one of the most secured and preferred choices of investments. It offers a constant rate of interest during the chosen term. So, the investor knows exactly about the returns he/she will receive at the time of maturity. It is mostly opted by people who don’t want to take risk with their investment. The interest may vary with different financial institutions though. Apart from regular FDs, there are tax savings FDs too, which helps lower the overall tax liability for up to Rs. 1.5 Lakh.
Top Investment Plans in India 2022
Listed below are some of the best investment plans to buy in 2022 -
Name of the Investment Plan
HDFC Sanchay Plus
ICICI PruLife Gift Plan
HDFC Click to Wealth Plan
Edelweiss Tokio Wealth Plus Plan
Bajaj Allianz Goal Assure Plan
ICICI PruLife Smart Kid Plan
Canara HSBC Life Invest 4G Plan
ICICI Prulife Signature Plan
Best Investment Plans
- For 1 Year
- For 3 Years
- For 5 Years
If the investor is looking to invest for a short period of 1 year, then it implies that he/she has a short term investment horizon. For them, it is recommended that they should not invest in equity options. Here are some of the best options that one can choose to invest for 1 year:
1 Year Investment Plans
Most Suitable For
It is ideal for investors who are looking to invest for 1 year or more. It offers 8% interest to the investor.
It is another short term investment that offers the investor an interest of around 6.5%, which may vary with different banks or financial institutions.
Recurring deposits are recommended for investors who want to invest on a monthly basis.
Fixed Maturity Plans
It includes diverse constant earning instruments such as corporate bonds, treasury bills, etc.
Post Office Deposits
A preferred mode of investment for many, post office deposits allow the investors to invest for 1 year, 2 years, 3 years, and 5 years as per their requirement.
Debts funds are suitable for people who are looking to invest for daily profits. One can earn a steady interest income and capital appreciation with debt funds.
Things to Check Before Investment Planning
Following are the factors that you must keep in mind before buying an investment plan:
- Financial Goals: Clarity about your monetary goals will help you decide what type of investment scheme you must buy. The goals may include buying a house, a car, marriage, child’s education/marriage, or building a corpus amount. One of the investment options, ULIPs, can even help you meet your short-term goals like foregin trip, etc. In case you have a small family, or have just started with your career, then you can go for ULIPs to fund your short-term goals. Whereas if you are in your 40s or 50s, then endowment plans are recommended for you. So, before choosing an investment plan, it is essential to gain clarity about your financial goals.
- Current Expenses Vs Savings: The amount that an investor spends in an investment plan plays a major role in meeting the financial goals. If someone has more expenses than savings, then it may indicate that he/she may not be able to meet large short term goals with coverage plans. But if the investor does not have major expenses to meet, let’s say he/she lives in own house without having to pay any rent, then savings are likely to be more than expenses. In this case, it is best to purchase an adequate life cover with return benefits and avail two in one benefit.
- Future Expenses Vs Savings: If the current expenses of an investor are lesser, then it does not imply that the future expenses will be less too. Sometimes, the current expenses may be nowhere as compared to future expenses. For instance, someone may have fewer expenses because their children are young now. However, major expenses may still be their way in coming years which may be due to child’s education or marriage. In this case, the investor can go for an investment option that charges a premium for a few years and then pays enough that it can pay itself from the annuity or other regular benefits. Apart from this, investing a higher amount also lets you multiply your wealth for the future. So, planning future expenses as well as savings help you shortlist the plan to invest in.
- Emergency Fund: Investment plans not only cover your needs but also let you grow your wealth within the stipulated period of time. You can use this wealth to pay for major expenses anticipated such as purchasing a house, to pay for child’s education in upcoming years, marriage, or to meet daily expenses after retirement. This is possible with ULIPs including a child ULIP plan and endowment plans. These plans help you meet expenses in the future. Also a child ULIP comes with a special feature called waiver of premium option which proves to be furthermore beneficial.
- Desired Returns: The returns offered by investment plans should be enough to take care of the investor in case he/she is unable to work anymore or to take care of the family in case of misfortune event of death of the investor. The same goes with an insurance plan. It should offer the required cover as well as sufficient returns. The cover offered should be enough so that the life assured is able to provide for his/her family as well as themselves. To understand the requirement of an investor, one must analyse their expenses in accordance with what a policy has to offer. If your cover is less than required, then ULIP and endowment plans are recommended for you as they ensure an increase in wealth by also offering much needed protection at the same time.
- Number of Dependents: The next thing to think of before choosing an investment plan is the number of dependents. This is because it also determines the sum assured an investor may require. The dependents may be spouse, children, siblings, parents, parents-in-law, niece, nephew, etc. If the investor only has a spouse and children as dependents, then he would require a lesser sum assured and vice versa. In case the children are young, then they would require funds in future for education or marriage. Hence, it will be easier to choose a plan when the number of dependents are taken care of.
Eligibility Criteria to Buy Investment Plan
Any person who is a resident of India and is aged above 18 years can buy an investment plan of their choice. When buying an investment plan, you need to fulfil the following eligibility criteria:
- You will be required to meet the eligibility criteria as specified in the policy wordings
- You must fall under the age criteria to be covered under a particular plan
- You must agree to the premium payment mode as well as term of a particular investment plan
Why Choose InsuranceDekho For Investment Plans
Plans With Zero CommissionnsuranceDekho offers the best investment plans with zero commission and lowest charges in the market. This helps you save more because if bought otherwise, then you will have to pay commission to the agent.
100% Call RecordingAt InsuranceDekho, all the calls are recorded. The calls happen via recorded lines which ensures unbiased advice and no mis-selling. Call recordings offer utmost transparency and honest selling.
No Hidden ChargesIn case there are any hidden charges that you will be required to pay with an investment plan, then the experts will clearly inform you about the same and nothing will be hidden from you. Transparency ensures smooth buying and selling of products via InsuranceDekho.
Experts Who Are Happy to HelpInsuranceDekho has a panel of experts who guide you to buy the best investment plan online as per your requirements.
Assistance in Policy RefundInsuranceDekho helps you to cancel your policy without any hassle, in case you are not happy with its offerings. You will be able to do this within a few seconds.
Frequently asked questions (FAQ’s)
What is investment planning?
Investment planning refers to the process of fulfilling your financial obligations/goals with your financial resources. Investment planning is the core financial planning that helps an individual to establish investment goals, determine their risk appetite and choose an investment option, which helps an individual to grow their wealth and fulfil their financial goals. Essentially this plan helps manage your investments and help you manage your money to achieve your goals.
When should I start investing?
There is no specific age at which one should start investing their earnings to grow a corpus. It is advised to start investing your money in different investment options at a young age or as soon as you start earning. This will provide you more time to build a bigger corpus. This way you will be able to overcome market risks and gain high returns in the long-term.
Are investment plans risk-free?
Market linked investment options always involve some kind of risk because return on investments totally depends on the performance of the investment option in the market. There are few risk free investment options available in India that provide guaranteed return on investment such as Savings account, Post Office Schemes, Fixed Deposits, Recurring Deposits etc.
Which is the best investment plan option in India?
There are plenty of investment plans available in India, you can choose an investment plan that suits your requirements. You should always choose an investment plan based on your risk tolerance. Check the rate of returns and select a plan that suits your needs.
Which investment plan gives the highest return?
Top investment option that can help you achieve high returns on investment are Direct Equity, Equity Mutual Funds, Debt Mutual Funds, National Pension System, Public Provident Fund, Bank Fixed Deposits, Senior Citizen’s Savings Scheme, Pradhan Mantri Vaya Vandana Yojana, Real Estate and Gold. You can choose to invest in the mentioned investment plan according to your risk appetite.
What are the 4 types of investments?
There are 4 main types of investments available in India classified on the basis of characteristics, risks and benefits. The 4 types of investment are Stocks, Bonds, Mutual Funds and Cash Equivalents.
What are 3 good investments?
As a beginner you can consider some investment options which will help you avail high return on investment. 3 good investment options for beginners are Unit Linked Insurance Plans, Bank Fixed Deposits and Mutual Funds.
How can investment plans help in retirement planning?
Investment plans can help an individual create a corpus for retirement, helping them to ensure a financially independent life as they retire. An individual can choose to invest in retirement savings plans that provide a lump sum as retirement fund or maturity benefit which can help an individual to ensure income after retirement.
What is the difference between saving and investing?
People almost use savings and investment conversely not knowing that both of them are different from each other. Savings accounts are low risk accounts under which rate of interest is earned on the money one saves. Savings account lets an individual save money for a short period. On the other hand investments involve high risk and the return on investment are high as compared to savings. Investments let an individual create wealth over a long period of time.
How can I save tax on my investments?
While choosing an investment option look for one which provides tax benefits under Section 80C of the Income Tax India, 1961. Some investment options that provide tax exemptions are Equity Linked Savings Scheme, Public Provident Fund, Employee Provident Fund, Unit Linked Insurance Plans etc.