Financial planning is a vital part of life. It is a step-by-step approach to meet your life goals and acts as a guide as you go through your life’s journey. Ideally, it helps you control your income, expenditure, and investments so that you can manage your money efficiently.
You can enjoy many benefits with a proper financial plan. It includes increasing your savings for the long run. A good financial plan also ensures that you enjoy a better living standard and prevent you from compromising your lifestyle. With a well-rounded plan, you do not have to worry about your future and your monthly expenses and attain peace of mind. Most importantly, you can prepare for emergencies. Your financial plan should include a life insurance policy, along with many other components.
When you research for the best life insurance plan, you will come across many different insurance plans. Insurance companies offer a wide range of insurances. You can read about each and choose the most suitable plan. For a head start, you can read on to understand three different investments that you can make. Each of these investments will put your financial worries to rest:
Life Insurance Policy
If you are wondering what is life insurance policy, it is one of the most affordable ways of family protection. It will provide financial help in case the worst happens to you. Being the simplest form of life insurance policy, it can also offer a return of premium. You need to pay a premium according to your affordability. Once you apply for a life insurance policy, the chosen insurer will fix a death benefit amount depending upon the premium.
As stated by the Insurance Regulatory and Development Authority of India (IRDAI), your nominees will receive a tax-free death benefit in your absence. Thus, no further tax is levied upon the benefit amount as you would have already paid the tax to the government.
When you procure a life insurance policy, you sign an agreement with the insurer making it legally liable to make policy maturity payments. But you can change the policy and even drop it off completely without being held accountable for paying any penalty amount. Hence, having a life insurance policy is one of the best investments. To find the best life insurance plan, make sure you do thorough research.
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Child Insurance Plan
An investment apt for growing families, a child insurance plan should also be a part of your financial planning. Like a life insurance policy, it ensures that you can efficiently handle the expenses of a new member of your family.
Child plans help compete with inflation, which is a daunting task, especially if there is a continuous annual growth rate. With lifestyle changes and increasing expenses, you have to be prepared for the future. It is essential to understand that education and marriage expenses that may be affordable now can sky-rocket in the coming years.
Child insurance plans will provide you with financial assistance. As a parent, you will be allowed to make a lump sum withdrawal from the policy. If you are not around due to an announced event, your child will get the sum assured you have chosen under the plan.
You should note that if you stick with the plan and continue paying your premiums on time, you can also receive loyalty benefits or loyalty additions. You can get these benefits at the time of maturity of the policy.
Retirement Plan
Retirement plans are a type of investment plan that helps you accumulate a part of your savings over a long-term period. They ensure you have a secured future and help you deal with the uncertainties post-retirement. By investing in a retirement plan, you can ensure a steady flow of income after your retirement. Sometimes, savings get exhausted quickly or get used in emergencies. But with a retirement plan, you will not have to worry.
You can choose to pay the premium at one go as a lump-sum investment or in periodic intervals. Simultaneously, the premium invested is accumulated over a long time. This accumulation time is the difference between the time when you start investing until the time you invest.
In case you want to withdraw your account, you can enjoy the benefit of surrender value. It is the amount the chosen insurer will pay you if you surrender before the maturity of the policy. However, that depends upon the amount you paid as a premium.
To conclude, these investment instruments ensure that you will remain financially stable throughout your life. If you want to buy the best life insurance plan or opt for child insurance or the retirement plan, make sure to choose a trusted insurer. All these plans have their own specific advantages and help make your life easy. So, research online and find the most suitable ones.
