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Insurance cum Investment Plans that could help you achieve your life goals

Savings and investing are critical actions that may assist you in achieving financial independence. Saving money takes a lot of discipline, but those who do it on a regular basis are rewarded in the long term. In this post, we will learn about insurance cum investment plans, which will make your life easier and more enjoyable. Financial experts love to tout that investments are the building block, having potential of creating market-linked wealth. If you want to generate more money, you may invest your money.

Investment plans also act as tax-planning tools, as many avenues help reduce tax liability. There are different types of investment plans, and by choosing the right one, you can invest according to your needs and grow your savings.Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 7th July 2024
Modified on: 7th July 2024
Reading Time: 15 Mins


How to choose an investment plan


There is no such thing as a one-size-fits-all answer when it comes to investing. An investment that is suitable for one person may be completely inappropriate for another. It may be tough for you to determine which investment is suitable for you because of this. Furthermore, with so many investment plans accessible in India today, it is easier for anybody to get confused. As a result, you must exercise caution while selecting a product for investing. You might begin by weighing the different possibilities against the following criteria:

● Maturity:

You must evaluate the time period of your short-term and long-term objectives, and the maturity of the assets must be selected properly. If you want to purchase a vehicle in three years, invest in assets that will mature in three years. If you invest in an asset that matures in five years, your money may be locked up.

● Risk:

Select assets that are appropriate for your risk profile; otherwise, your investment will not provide the expected outcomes. If you don't enjoy taking chances, purchase fixed deposits or bonds instead of stocks.

● Profits:

The returns you get will be proportional to the risks you are willing to accept. If you're not prepared to take the required risks , you may prefer safer investment options and may get returns accordingly.

● Added Charges:

When you invest, your expenses in the form of potential charges or taxes diminish your profits. For example, if you get a 12 per cent return but have to give up 4% in these added costs (such as premium allocation charges in ULIPs, for example), your effective rate of return is now 8%. It is critical to keep costs low at all times. As a result, it's common sense to steer clear of assets with high operating costs.


Types of investment plans based on their returns


At the end of the day, for the appropriate market-linked returns, you may consider market-linked instruments since these have historically been the preferred investments option for the investors. ULIPs (Unit Linked Insurance Plans) are insurance cum market-linked investment option that provide the investor with a mix of insurance and investment. The premium received from the investor is invested in equity funds and/or bonds funds or mix of both. The rate of return will depend on the performance of the underlying funds.

Additionally, you get the security of a life insurance corpus when you invest in ULIPs. This two-in-one instrument gives you benefits of both insurance coverage & market-linked investments, as you get to pick the asset classes of your choice, alongside financially securing your loved ones in the event of an emergency. Ultimately, you get to keep your loved one’s protected.

Note that, ULIPs issued on or after 1 Feb 2021 and having premium more than Rs. 2.50 lakhs have both short term and long-term capital gains taxation applicable to them. Further, in case of multiple ULIP policies issued after 1 February 2021, held by a customer, he has the option to choose policies having premium less than Rs. 2.5 lakh in aggregate to be considered as tax free subject to the provisions of Section 10(10D) of the Income Tax Act, 1961. Only the incremental policy exceeding the Rs. 2.5 lakh limit would be considered as taxable.

However, if your ULIP premiums are under Rs. 2.5 lakhs during a financial year, the maturity proceeds of the same shall be tax-free subject to satisfaction of conditions as mentioned in Section 10(10D) of Income Tax Act.


Wrapping Up


It is important to keep in mind that if the assets in your fund falls, the returns may decline as well. Equity market is more volatile as compared to other financial assets. As a result, they have a high level of risk.

1Check out the various insurance plans offered at Bajaj Allianz life to kick start your investment journey.

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**Past performance is not indicative of future performance.

The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information.

The views stated in this article is not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on carefully before concluding a sale.


*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

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1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

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