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Insurance solutions for HNIs- Balancing investment with coverage – investment avenues

High Net-Worth Individuals (HNIs) are affluent individuals who have high disposable incomes. In the financial parlance, HNIs are classified as people having more than ₹5 crores in investible surplus1. Investible surplus is a technical term that means the extra amount of money that can be invested in ‘appreciating’ assets, i.e., assets whose value grows over time1.

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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Get Your Life Goals, Done!

Tailored Life Insurance Solutions for your long-term Life Goals.

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
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The following assets are excluded from the calculation of investible surplus1

1. Property or real estate

2. Vehicles

3. Personal assets

4. Assets purchased without expecting to earn any return from them

There are many HNIs in India. Per reports, as of 2022, there were 797,714 HNIs in India2 having assets worth more than $1 million. The report also projected that the number of HNIs would double in the coming 5 years growing at 108% to reach the 1.7 million mark2.

 

HNIs And Investments

 

When it comes to investing and planning their portfolios, HNIs usually look for customized solutions to meet their unique investment needs. They can spend more and don’t mind investing in a product that is tailor-made for their particular requirements. That may be why they consider investing in alternative investment avenues like Alternative Investment Funds (AIFs), Portfolio Management Services (PMS), etc.

While there are many investment avenues that can be customized based on an HNI's unique requirements, what about the financial security that insurance brings?

 

Insurance Solutions for HNIs

 

Life insurance is important for HNIs too as they also want to provide financial security to their families in their absence. Moreover, they can easily plan for their specific goals using the life insurance plans available in the market. Let’s understand how –

1. Different types of plans

There are different types of life insurance plans that HNIs can choose from based on their coverage needs. Have a look –

Type of plan

Goal fulfilled

Term insurance plan 

Income protection and replacement

Endowment and Money-Back Plans

Savings and wealth creation

Child Insurance Plans

Securing a child’s financial future

Pension Plans

Retirement planning

ULIPs 

Savings and wealth creation

HNIs can, thus, explore these plans and choose suitable policies which cater to their financial goals.

2. Flexibility of choosing the coverage

Life insurance plans offer flexibility in choosing the policy tenure and the sum assured. As such, like any other individual, HNIs too can choose a coverage amount which would be sufficient to take care of their financial goals. Moreover, with a flexible choice of tenure, they can choose a tenure that aligns with the horizon of goal fulfilment.

3. Optional riders

Riders are additional coverage features which are usually offered as optional benefits at the payment of an additional premium. Depending on their added coverage needs, HNIs can choose the relevant riders and enhance the scope of their policies.

4. Choice of premium payment terms

Even when it comes to premium payments, life insurance plans offer flexible options of regular premiums, single premiums and limited premiums. This makes it easier for HNIs to choose a suitable premium payment term based on their financial plan and enjoy the coverage.

So, life insurance plans offer customisation which suits individual HNI needs and helps such individuals avail of relevant coverage.

 

Savings-Oriented Insurance Plans – Balancing Investment With Coverage

 

For HNIs looking for investment returns, savings-oriented life insurance plans can be a suitable choice. Traditional plans like endowment and money-back offer stable returns and are immune to market risks. On the other hand, for risk-taking individuals, ULIPs may be a suitable choice as they offer market-linked returns and allow wealth creation with insurance coverage.

Some of the benefits of both traditional plans and ULIPs are enumerated below –

Traditional life insurance plans (endowment and money back)

ULIPs

1. Stable benefits are payable on premature demise or on maturity.

2. Some plans offer bonus additions which add to the corpus.

3. Some plans also offer guaranteed additions, loyalty benefits, etc. to enhance the plan benefits

1. ULIPs offer HNIs different types of investment funds. HNIs can choose one or more funds depending on their risk profile and investment strategy.

2. The funds are professionally managed and offer a diversified portfolio of securities.

3. HNIs can earn market-linked returns on their investments

4. ULIPs offer the flexibility of partial withdrawals, switching between the available funds and premium redirections.

5. HNIs can also use the top-up facility if they want to invest more.

6. Goal-oriented ULIPs like child ULIPs or pension ULIPs help in planning for the relevant goals.

 

The bottom line

 

HNIs looking for customized solutions in life insurance plans may consider ULIPs. Right from choosing the type of policy to nuances of the coverage details, HNIs have complete control of their policies. If they choose savings-oriented life insurance plans, they can enjoy the dual benefits of insurance coverage and investment returns.

It is a win-win situation which HNIs can capitalize on. So, if you are an HNI, assess your needs and choose the relevant life insurance plan. Customise the coverage when buying the policy and enjoy financial security.

Reference

1.https://www.business-standard.com/about/who-is-high-net-worth-individuals

2.https://www.businessinsider.in/business/news/indias-super-rich-will-double-in-numbers-to-1-6-million-by-2027-knight-frank/articleshow/100298454.cms

BJAZ-WEB-EC-04893/23

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~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

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 www.bajajallianzlife.com) carefully before concluding a sale.

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Disclaimer

*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.

~Individual Death Claim Settlement Ratio for FY 2023-2024

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


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

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Disclaimer

%%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%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*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%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

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


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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Disclaimer

*Above illustration is for Bajaj Allianz Life eTouch II - A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN:116N198V01) considering Male aged 25years | 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. 5,092. 2nd Year onwards premium Rs. 5,520. Total Premium Rs. 1,65,172 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly instalments (Lumpsum Payout Percentage: 40, Income Payout Percentage: 60). Income payout instalment opted for 40 years | Premium shown above is inclusive of Online Discount only, no other discounts have been considered and 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. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

##Tax benefits as per prevailing Section 10(10D) and Section 80C (under old tax regime) 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%.

**5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium. 5% Discount for salaried customers, applicable only on first year’s premium. 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency on first year's premium.

$Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium means total of all the premiums paid under the base product, excluding any extra premium and taxes, if collected explicitly.

Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

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