Skip to main content

Guaranteed life insurance products - Safe & Secure

If safety of your funds is what matters to you, try guaranteed life insurance products which offer assured returns too.

Lets check out the benefits:

IT’S a lesson that most people learn pretty early these days — there are no guarantees in life. Almost everything is a 50:50 game and to survive, you need to be ready for those days when the odds are weighed against you. But the irritation is much greater when the uncertainty involves money. With the stock markets still volatile, frustration and despair are becoming the predominant sentiment. Faced with the need to rekindle feelings of safety and security, life insurance companies have launched guaranteed insurance products.

SWEET TREATS

Guaranteed return plans are what one would call a two-in-one treat. On one hand, they offer what a normal life-insurance policy would in terms of covering you against unforeseen incidents like death. In addition, they also ensure that you are entitled to a fixed sum of money at the end of the maturity period. This is made possible as the companies invest in a series of fixed income products such as government securities, infrastructure bonds, corporate bonds, debt and money market instruments. This combination of benefits makes a guaranteed return plan a very attractive investment product for those with a mid to long-term investment horizon. A number of companies have launched guaranteed return policies in the recent past such as Jeevan Aastha launched by LIC, another plan launched by Aegon Religare and the India Bond plan by Aviva Life Insurance.

COUNT THE POSITIVES

The first is no doubt the assurance of fixed returns, especially in a period when returns from stock markets are far from the expected levels and even insurance products like ULIPs have recorded poor performances. In a guaranteed return plan, returns are calculated on a compounding basis over a fixed period of time and generally range between 6% and 8%. The plans generally have a long investment horizon of about 5-10 years. Also, for those who hate the thought of having to dole out a huge sum as tax, it makes sense to know that you are exempt from paying tax on the maturity amount. These plans usually offer tax-free returns under Sections 80C and Section 10 D. In fact, at the higher tax bracket, the annual return is much higher than any popular ‘safe’ investment product.

SIMPLE FEATURES

While the specific details vary from company to company, it is generally observed that most guaranteed return plans are single-premium products. This gives one the ease of making a down payment at the beginning of the policy instead of having to pay a regular premium every month. Explaining the reasons for a single premium, The net reduction from the premium is lesser in a single premium plan as the costs involved are lower. This ensures that there is more money available for the company to invest and generate the returns promised by them Most companies also do not allow for premium below Rs 50,000. Notably, the time period for which the policy is available is generally limited to about 45 days. Experts say this decision has been taken to reduce the effects of possible fluctuation in interest rates. Maximum age also generally revolves around 45 years, in some cases extending to a maximum of about 60 years.

MAKING THE CHOICE

Experts feel that before jumping into a plan of this sort, an investor must evaluate what he actually wants to achieve via the plan. As far as coverage is concerned, the death benefits are seen to decrease with every year into the policy. Moreover, when it comes to investments, there are other options in the market, which are offering competitive rates of interest and are also tax-exempt. You should looking at buying the product if the sum of tax-free returns and the premium to be paid for your term insurance is less than the returns that are promised by the guaranteed return product. To save yourself of worry, you must also make sure that you buy the plan from a company you trust even if it means compromising on the returns, he adds.

Popular posts from this blog

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...

Franklin India High Growth Companies Fund

Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India . With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has perform...

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...

Avoid NFOs

  Don't get taken in by the flurry of new fund offers. You will be better off sticking to the tried and tested schemes.   For the past one year, to cash in on the bull run in equities, mutual fund houses have gone on a new fund offer (NFO) overdrive. But experts are unanimous in their advice: avoid NFOs . While past performance is not an indicator of how a fund will fare in the future, it does tell the investor how skilful the fund manager is. This crucial information is missing in an NFO. Not only is there no track record to judge an NFO by, many NFOs are similar to funds that already exist. If the new fund is similar to existing funds, you are better off investing in the latter. Around 67% of the new launches in 2014 were closed-end products. Investing in the NFO of a closed-end fund is doubly risky. In case the fund's performance is lacklustre, a closed-end fund does not allow you to exit. Even though closed-end funds are listed on the stock...

Mutual Fund Exit Load Changes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Mutual Fund Exit Load Changes AMCs don't communicate about any change in exit load directly with investors, but do update on their website   The exit load applicable to your investments is the load which existed at the time when you invested in the particular fund. Any subsequent changes in the exit load will not be applicable to your investments.   However, Asset Management Companies ( AMCs ) periodically publish addendums in the newspapers, which state any change in exit loads of specific schemes managed by them. Such changes are also posted on their websites. However, a direct communication to an investor is not made, considering the costs involved in doing so. In their own interests, investors should not only track the performance of the funds they i...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now