Four reasons that will convince you to invest in Cancer Insurance

Cancer, just the mere mention of this word can send a shiver down your spine. This disease is one of the deadliest ones out there and claims well over a million lives all over the world, every year. Apart from the aggressive treatment and the uncertainty of whether it will save the patient, what scares people is the cost of cancer care treatment. Everything from the diagnosis of cancer to the treatment and medication can cost well over 10 lac rupees. Even if one survives this disease it can easily leave you bankrupt. To ensure that does not happen, banks have devised an insurance plan called cancer insurance.

An ordinary health insurance plan does not cover cancer treatment expenses since they are high. If you want to safeguard your family against the financial turmoil caused due to this disease you need to consider investing in cancer insurance plan.  

A cancer policy is designed to meet the specific insurance needs of a cancer patient. However, the pre-requisite for getting insured remains the same even here, the patients who have a pre-existing cancer condition cannot be covered under a cancer specialist policy. A cancer insurance policy ideally covers you against cancer, both at the early and advanced stages. Unfortunately, there are not many insurers committed to offer this kind of cover to the needy.

If you believe that you don’t need this policy, then here are some facts that will probably change your mind.

1.  According to estimates of various global and domestic organisations, lifestyle related diseases like cancer, heart diseases and hypertension are on the rise in India. One out of four Indians is at a risk of contracting one of these diseases before they reach the age of 70.

2.  Cancer treatment can cost you anywhere between 2.5 lakhs to 20 lakhs in just six months. You need something to fall back on when the costs are this high and cancer care Insurance Plans will have your back during this time.

3.  A heart and cancer insurance plan can be tailor made to meet the financial costs arising from the treatment require from one of these ailments. You can either choose one or both heart and cancer cover in your plan. The policyholder will receive lump sum payments throughout the various stages of his or her treatment.

4.  Cancer care insurance also provides a life insurance cover to the policyholder. This cover pays the nominee a certain amount of money in case of the death of the policyholder. This is a good way to secure your family’s’ future in case of the unfortunate.

Buying a Heart and Cancer Care Insurance Plan may seem like an added expense right now, but in the long run it might help you to preserve the finances of your family in a time when they need it the most. 

What you should consider when you invest in a ULIP Policy

What would be the ultimate way to save your money and at the same time have it increase? What if we told you that there is a scheme that helps you do just that and all you have to do is pay a set amount every month for a stipulated period of time? No, we’re are not talking about some Ponzi scheme that may or may not give you any returns. We’re talking about ULIPs or Unit Linked Insurance Policies. 

ULIPs are both insurance and investments. In a Unit Linked Insurance Plan the premium that the policy holder pays is divided into two parts, one goes to the life insurance and the other goes to mutual funds as investment. A ULIP holder has the option of either investing in equity or in debt. An aggressive policy holder will choose to invest his money in equity while a conservative policy holder might chose to invest his money in debt. The money is invested during the term of the policy which may range between 5 to 15 years. The returns from any ULIP are completely exempted from tax. 

A ULIP policy is designed to suit the needs of the policy holder. For it to effective one needs to invest in ULIPs the right way. Let us tell you how. 

1.  If you are single and just starting out with your career, you need low protection but high wealth creation and accumulation as you are just starting out in life. You can choose a ULIP plan with a low death benefit and allocate more of your money to equity oriented investment funds.

2.  If you are newly married and have no kids, your protection need is medium and the need for wealth creation is high since you might be planning on starting a family. You can choose an Insurance Plan with high death benefit and an investment plan that focuses on balance and growth of your investment funds.

3.  If you are married with young children, you need high protection as well as high wealth and asset creation because you need to save for your kids. You should choose a ULIP plan with increased death benefit and balanced investment fund for the creation of assets. 

4.  If you have a well settle job, are married and have school going children, you need high protection and high wealth creation along with liquidity to meet your child’s needs. Opt for partial withdrawal of your policy to meet your liquidity needs.

5.  If your children want to pursue higher education or start their own business or want to plan their wedding, you need medium protection again and also liquidity to meet their needs. You can again liquidate accordingly.

6.  If you have independent children and are nearing retirement your protection needs are low but you need to accumulate wealth for your retirement. At this stage of life you should lower your death benefit and opt for debt oriented investments.

Three reasons why term plan are THE insurance plans for you

Term life insurance is the simplest and also the cheapest form of insurance. In this type of insurance once the policy term is up or in case of the death of the policy holder, whichever’s first the nominee receives a lump sum payment from the insurer. If the policy holder outlives the policy he/she receives no benefit. But on the other hand the premium for term insurance is minimal. Hence opinion about this type of insurance is torn.

Term plans are the most cost effective way of insuring your life. It comes at a low premium and the pay-outs are sizable. It’s the most cost effective type of insurance policy. But the fact that on maturity the policy holder does not receive anything, since there is no investment option in this type of insurance is what holds people back from buying it. But there is a type of term life insurance that take care of that factor as well. These plans are called TROP or Term Return of Premium plans. 

These plans provide income replacement and refunds of the premiums paid at maturity, apart from offering all benefits of a traditional term life insurance plan.  You can also opt for life insurance riders like as Critical Illness and Accidental Death or Disability riders.

If there’s still a doubt in your mind about whether or not term plans are the best fit for you then let us clarify them for you with the following three points. 

1.  Simplicity: Term life insurance plans are straightforward. Unlike other insurance plans this type of insurance is simple and easy to understand even for the layman. This makes it easier for the policy holder to make proper, timely premium payments.

2.  Flexible: Opting out of a term life policy is much easier than getting out of other policies. In term policies if you stop paying premium the risk cover ceases and the policy ends. Nothing is payable to you as there is no savings element in the policy.  

3.  Renewable: Many term life insurance policies are "renewable" and "convertible." Renewability ensures that you can go in for another term policy without a medical exam at the end of the first term policy. Convertibility allows you to convert your term life policy into an endowment policy for the same sum assured with associated increase in premium, should this make sense during the term of the policy.

Cancer Care Insurance – how it works and what are its benefits

The first thing that one must do once they start earning is to buy insurance. For a secure future and to safeguard your finances one must create an insurance package. This package needs to have all the insurance policies that one can need. The four basic types of policies that your insurance package must contain are a life insurance policy, a health insurance policy, a critical illness policy and a personal accident insurance policy.

People are often confused between whether they should opt for a life insurance policy or a health insurance plan. The answer is that you need both. Both, a life insurance policy and a health insurance plan have unique functions and one simply can’t be replaced with the other.

Here’s how one is different from the other and why you need both.

What is a life insurance policy?

The need and importance of life insurance for everyone is undeniable. A good life insurance plan is an investment as well as a security. Here’s how a life insurance policy works, you pay a set premium for the duration of your policy. On maturity you receive a lump sum amount, which is the money you’ve paid as premium in case of term plans you, don’t receive a pay out on maturity. Term policies come at a low premium but in case of the death of the policyholder the nominee receives a sizeable amount in the form of a claim. Your life insurance plan needs to be tailored to the needs of your family. While buying a plan one needs to take into consideration the current income, loans if any, the expenses etc. of a family. There are a few different types of life insurance plans you can choose from, they are term insurance, whole life insurance, ULIPs and child life insurance plans, to name just a few.

What is a health insurance plan?

A good health insurance plan is the need of the hour for every family. Healthcare rates all over the country are soaring. Even simple procedures, tests and diagnostics can make quite a dent in your monthly budgets. Health insurance policies make sure that you don’t have to worry about finances when you or a loved one is in need of health care. Choosing the proper health insurance plan for your family is crucial. Health insurance plans take care of your medical expenses. To maximise the benefit of a health insurance plan one can purchase riders, which are like add-ons. There is a critical illness insurance that takes care of your medical expenses in case you contract a serious illness like cancer, heart disease or organ failure. Other riders include accidental death rider and permanent disability rider.

Customize your health insurance policy with accidental & disability riders

An insurance policy is a way to safeguard your family financially, in case of an unforeseen death, disease or accident. There is no right age for one to by insurance; the younger you start the better it is. Every person you have steady source of income, a family to take care of and a future to plan for should create an insurance package for themselves and their families. The four basic types of insurance policies that one needs to have in that insurance package are, a life insurance policy, in case of the death of the policyholder this policy will help your family by giving them monetary support. A health insurance policy, which will help take care of any medical bills or treatments, which can be very expensive. Personal accident policies that will help supplement the income of the family in case the policyholder meets with an accident. And a critical illness policy that will help take care of the treatment costs for illnesses like cancer, heart diseases and major organ failure.

Insurance riders are a great way to customize your insurance policy. A rider is an insurance add-on that provides the policyholder with additional benefits apart from those offered by the term policy. It is used to enhance the cover of the policy. You can add multiple riders to a health insurance or life insurance policy. But the two most important riders are the Accidental Death Rider and the Permanent Disability Rider. There are three other riders too, they are, the Critical Illness Rider, the Premium Waiver Rider and the Income Benefit Rider.

These riders together help you maximize the benefit of your insurance policy. Here’s what you need to know about the two most important insurance riders and how they work.

1

.      Accidental Death Rider: If you purchase this rider and the policy holder dies due to an accident, his or her nominee will receive and addition amount of money above the sum that has been assured to them in their term policy. For example, if your term policy assures you Rs.50 lacs and you’ve purchase an accidental death rider, your nominee will receive a sum of Rs.60 lacs in case you die in an accident.

2

.      Accidental Disability Rider:  If an accident leaves you partially or permanently disabled, then this accidental disability rider helps to substitute your income which you’ll lose due to your disability. With this rider, you get a percentage of the assured sum for a fixed period (five or ten years). Usually, this rider is offered along with the accidental death rider.

A rider can be the difference between financial disaster and stability, buy paying a little extra you can save your family a lot of trouble.

Difference between Life Insurance and Health Insurance

The first thing that one must do once they start earning is to buy insurance. For a secure future and to safeguard your finances one must create an insurance package. This package needs to have all the insurance policies that one can need. The four basic types of policies that your insurance package must contain are a life insurance policy, a health insurance policy, a critical illness policy and a personal accident insurance policy.

People are often confused between whether they should opt for a life insurance policy or a health insurance plan. The answer is that you need both. Both, a life insurance policy and a health insurance plan have unique functions and one simply can’t be replaced with the other.

Here’s how one is different from the other and why you need both.

What is a life insurance policy?

The need and importance of life insurance for everyone is undeniable. A good life insurance plan is an investment as well as a security. Here’s how a life insurance policy works, you pay a set premium for the duration of your policy. On maturity you receive a lump sum amount, which is the money you’ve paid as premium in case of term plans you, don’t receive a pay out on maturity. Term policies come at a low premium but in case of the death of the policyholder the nominee receives a sizable amount in the form of a claim. Your life insurance plan needs to be tailored to the needs of your family. While buying a plan one needs to take into consideration the current income, loans if any, the expenses etc. of a family. There are a few different types of life insurance plans you can choose from, they are term insurance, whole life insurance, ULIPs and child life insurance plans, to name just a few.

What is a health insurance plan?

A good health insurance plan is the need of the hour for every family. Healthcare rates all over the country are soaring. Even simple procedures, tests and diagnostics can make quite a dent in your monthly budgets. Health insurance policies make sure that you don’t have to worry about finances when you or a loved one is in need of health care. Choosing the proper health insurance plan for your family is crucial. Health insurance plans take care of your medical expenses. To maximize the benefit of a health insurance plan one can purchase riders, which are like add-ons. There is a critical illness insurance that takes care of your medical expenses in case you contract a serious illness like cancer, heart disease or organ failure. Other riders include accidental death rider and permanent disability rider.

How to Insure and Invest for Self-Employed People

When you work for a multinational company or any big company your employer pays to make sure that you and all the employees have health cover and life cover. Being employed with a company gives your insurance benefits along with a steady income. Self-employed people do get the same benefits as they are their own boss. With so much work pressure and constant stress self-employed people usually overlook or neglect the importance of buying insurance.

So if you’re self-employed and don’t know how to start your insurance journey then let us help you.

Here are some essential plans and policies that you need to invest in, in order to secure your finances.

1.  Life Insurance: This is the first and foremost investment anyone should make. Life Insurance Plans are an investment everyone should make. It is the first step to your financial planning. It should be treated more as an investment than an insurance policy. When choosing life insurance one should opt for term insurance as it comes with low risk and high coverage. A life insurance premium is something you should add to your monthly saving plan. The life insurance claim that you receive on maturity of the policy is tax free subject to applicable terms and conditions.

2.  Unit Linked Investment Plan (ULIP): ULIPs are a great way to invest your money. They provide insurance cover as well give you returns through equity. This plan provides life risk coverage. It can provide between 5-11% returns, but they are not guaranteed. The ULIP should be held for maximum time.

3.  Critical Care Insurance or Cancer Care: Critical or Cancer Care Insurance is a type of health insurance that covers medical expenses of the policy holder in case he/she contracts any of the critical illnesses listed in the policy. Critical illnesses covered include, cancer, heart disease, vital organ failure and even disability.

4.   ELSS Tax Saving Mutual Fund: Mutual funds are the best way to invest your money for long term benefits. They offer the highest returns compared to any other tax saving investment plan in the country. The returns are not guaranteed but if you can afford to take some risk, your earnings can range between 12 – 15%.

5.  Bond: Purchasing bonds of a particular company is like giving that company a loan. The company will pay you interest on your loan. In the case of some companies the interest can be as high as 10% or 12% p.a. These bonds usually have a maturity of 10 to 15 years.

What One Can do to Pay Lower Premium for your Term Life Insurance

We can’t help growing up, but is there such a thing as growing up too fast? Are there ways or things that we do or eat in our day to day life that contribute us aging faster than we normally should? Can our lifestyle or habits really cut short our lifespans? The answer to all these questions is yes. Your lifestyle choices can have a bad effect on your health and in turn on your life span. Not only that but habits like smoking or drinking also have an adverse even on your life insurance premium.

Yes, it’s true, if you’re a smoker and you buy a term plan, your terms and premiums can be starkly different than those of a non-smoker. This is all because a smoker is more likely to contract diseases like respiratory illness and complications, COPD, emphysema, stroke, hypertension, heart disease and cancer (mostly lung cancer).

If you’re a smoker and wish to reduce your term life insurance premium, here are some things you could do, apart from quitting smoking of course.

1.  There is no such thing as an occasional smoker. Almost all insurance companies classify smokers from non-smokers with this simple rule. If you have used tobacco in the last 12 months you are classified as a smoker. So if you wish to apply for a term plan or any other form of Life Insurance, it’ll be a good idea to abstain from smoking for at least 12 months.

2.     There are insurers that are more open to insuring smokers than others. The population that smokes is huge in India and every year it only keep going up. Although the claim risk is very high, insurance companies still go ahead and offer insurance to the smokers. Some organisations attract the smokers aggressively because they offer comparatively lower premium amounts. Look for an organisation that offers a health insurance policy that suits your needs.

3.  There are programs called smoking cessation programs that are offered by insurance companies and employers alike. These programs can help reduce your term insurance premium a great deal. The catch here is that you need to abstain from smoking for at least two years for you insurance premiums to go down significantly.

4.    If you wish to quit smoking after you’ve already purchased a Term Plan then you can notify your insurance company about the same and ask for a review every year that your policy is active in order for them to lower your premiums.

Five Reasons to Buy Insurance Online

Our world has moved online now. We have our social interactions online, we learn new things like languages and art online, and we shop for everything from furniture to even our daily necessities online. We even pay all our bills online and even manage our bank accounts online. The reason we do everything online is that we find it convenient and easy. You just have to press a few buttons here and there and you’re done. If online buying is that convenient why not buy your life insurance online too.

We bet you’ve already seen on of those television commercial asking you to compare insurance online. That is because the online market for life insurance policies is booming. The choices are endless. You can search for the best policies that suit your needs all by yourself. There is no need for agents or middlemen, you can do it all on your own.

Apart from the convenience another perks of buying insurance online is that a lot of insurance providers offer exclusive policy term plans that are not even available at their branches or with their agents.

Here are five reasons why you should buy your life insurance online.

1.  Most convenient way to buy insurance: Buying online insurance is far more convenient than buying insurance through an agent. You can easily do it on your own, and you don’t need to pay extra charges or agent fees.

2.  More information: While buying online insurance you can conduct your own research. You can find everything you need to know about your insurance plan. You can also read up on all the different online life insurance policies to choose from them the one that suits your needs best.

3.  Easy payments: You don’t need to visit your bank or your insurance providers’ office every time you need to pay your insurance premium. Online life insurance payments are super easy and you can do them with just a few clicks of the button.

4.  More choices and offers: A lot of banks and insurance providers offer exclusive insurance scheme plans and discounts for online insurance. They give you perks like reduced premium rates and a lot more.

5.  Higher insurance cover: Insurers also offer higher life coverage on Online Life Insurance Policies than they do on their offline counterparts. This is because insurers believe that those who have access to internet facilities will also have access to better healthcare. Hence, if an insurer offers life cover of 65 years on his offline insurance policy, he may offer a cover of 70 years on his online policies.

Why you Should Invest in Cancer Care Insurance

Health insurance can be a tricky thing to understand, there are a tonne of terms and policies that come along with your health insurance. Cancer care insurance is a type of health insurance. This type of insurance concentrates specifically on cancer treatment and procedure. If you are diagnosed with cancer during the term of your normal health insurance, it does not cover the specialized treatment that you require to beat the disease. The cost of this treatment and even the diagnostic tests can end up costing the patient lakhs of rupees. That is why one should consider investing in critical care or cancer care insurance.

It is important to know that a cancer care plan does not give you cover if any symptom relevant to cancer occur within 90 days of commencement of the policy. Even if you are diagnosed after the waiting period, your critical illness cover may not payout your claim until your cancer is in the advanced stage (critical illness does not cover cancer when it is still at its early stage). Critical illness cover can be bought as an individual plan or as a rider with your life insurance or family health plan.

Here are some important things you should know about cancer care insurance and how it can help you.

1.       Cancer Care Insurance provides a life insurance cover to the policyholder. This cover pays the nominee a certain amount of money in case of the death of the policyholder. This is a good way to secure your family’s’ future in case you don’t make it.

2.       A cancer care plan can be tailor made to meet the financial costs arising from the treatment required for your disease. You can either choose one or both heart and cancer cover in your plan. The policyholder will receive lump sum payments throughout the various stages of his or her treatment.

3.       A critical illness or cancer care plan will cover only the specific illnesses that are mentioned in your policy agreement. You can purchase specific critical illness or cancer care riders if you want to insure yourself against more than the specified illnesses. A critical illness is one that can be fatal.

4.       Even if you have regular Health Insurance, buying cancer insurance cover is a good idea because a lot of insurers do not cover major illnesses like cancer, heart disease or failure of a vital organ. 

Why ULIP Plans are the Best Way to Insure your Life

Insurance policy are an essential for living a stress free life. An insurance policy ensures that your loved ones are taken care of financially if and when you’re not around to take care of them. You pay a monthly premium to your insurer for the term of your insurance and on maturity you receive a sizable amount. But there are also numerous plans that double as an endowment policy too.

An endowment policy or money back insurance policy is a life insurance policy that offers the dual benefit of insurance and monetary returns at regular intervals. A money back insurance plan is the perfect blend of insurance and savings elements that gives assured returns. This makes this type of life insurance very popular among investors. All insurance companies have a variant of money back policy with varying premiums. Some plans return money every five years, some skewed towards the end of the term and some at other specified dates. All these options can confuse the customer a lot.

A money back policy provides life insurance cover for a specific period. During the term of the policy, the insured receives tax-free, fixed proportions of the sum assured at regular intervals. On maturity i.e. on surviving the entire term of the policy, the insured receives the balance portion of the sum assured, if any, plus the bonus addition for the term of the policy, if any, or the value of the investments. In the event of death of the insured during the term of the policy, the nominee still receives the entire sum assured (even if the insured had received fixed portions of the sum assured), plus the bonus addition, if any.

Unit Linked Insurance Plans or ULIP plans are a great policy option that ensures regular returns. ULIP plans are life insurance policies attached to investments in equity or debt. In recent times ULIPs have been selling like hotcakes because of the attractive packages and the even more attractive returns they offer for their investors. Banks have started reducing their charges for these policies, making this the best time to invest in them.

ULIPs are very similar to Systematic Investment Plans (SIP). In SIP an investor invests regularly on a monthly or quarterly basis without worrying about the stock market being up or down. In ULIPs the investor invests his money on a quarterly or half-yearly basis.

In recent times insurance providers are offering even more perks with ULIP plans. They give discounts and are selling these policies at the lowest rates, making this the best time to invest in ULIPs. This makes ULIPs the best money back policy to invest in.

Guide for Parents to Secure their Child's Future

There is nothing more important than a child to a parent. A parent would go to any length to ensure the happiness of a child. He/She is responsible to not only take care of the needs of the child but also prepare /them well for a secure future, to be self-sufficient and ready for all that life has to offer. But, how does one ensure lifelong support to the child? How do you make sure that your child’s future is secure even if you are not around?

Life insurance is very important for a safe and conducive future. It not only gives him the confidence but also assures a quality life. Therefore, to take up a plan that protects child future is essential. A life insurance plan allows you to invest for him in a way that he/she always has a ‘fall back option’.

You can invest in a term life insurance which is meant to protect the family and provide financial backing in case of an unfortunate event. A term policy also allows you to save taxes, which in turn saves a lot of money that can be reinvested in your child’s future. Also, in the event of a payout, will be tax free.

In turn, it also makes the child more accountable and ready for his future as he knows that an investment has been made in his/her future which in turn makes him/her more aware of his/her duties.

How to Choose the Right Term Insurance Amount for your Family

Term insurance is insurance that is valid for a specific period of time and offers death benefit to the nominee in the event of the death of the insured. The premium for term insurance is low and is often the only factor that drives people to opt for term insurance.

Term insurance is a great way to secure the future of your family, in case you’re not around to take care of them in the future. We never know when and how life may end, so it’s always a good idea to insure your life so that your dependants are taken care of, at least financial, in your absence. But how do you decide how much money is sufficient for your family to take care of themselves? What is the right amount for your term insurance? Here are some deciding factors that you need to carefully look into to decide the amount of your insurance.

1. Your stage of life: The stage of life you’re at makes a huge difference to the amount of life cover you require. For example, if you’re single your only dependants are probably your parents, if they too are earning and well off, you need minimal life cover. But if you’re married with a child, your financial responsibility increases significantly. So make sure you take into account the needs of your spouse and children while choosing an insurance, if you’re at this stage of your life.

2. Your current income: Your term life insurance needs to provide your income to your family, in your absence, to ensure that they can take care of themselves. This is one of the main factors that you need to take into consideration while choosing your term insurance amount.

3. Your loans and liabilities: You need to ensure that your family is not burdened with loan repayments and other liabilities if you’re to pass away. Your term insurance amount needs to be sufficient enough to pay off all your loans and liabilities and help your family get back on their feet after that.

4. Inflation: Prices of everything in life keep changing, mainly because of inflation and deflation. We mostly see inflation and that is one factor you need to consider while choosing your term insurance amount. The things that you can buy for say a thousand rupees may cost you two or three thousand in the future. So whatever is your monthly expenditure now, is bound to go up and you need to decide your amount accordingly.

Four Things to look for while Buying Family Health Insurance

What makes a happy family? A good home, a good lifestyle and the assurance that your family’s future is secured! One of the most important things that you, as a breadwinner or caregiver can do for your family is to insure their futures. This doesn’t only mean buying life insurance cover or personal accident cover for yourself, but investing in a family health insurance plan that ensures the financial safety of your family in case of major illness. A health insurance plan is crucial in this day and age, where health care is exorbitant to say the least. A family health insurance plan extends to your spouse and children and even your parents depending on what kind of insurance you choose. But buying family health insurance is a daunting task with all the information, documents and procedures you require. Buying family insurance plans through an insurance agent is advisable but even so here’s a small list of the things that absolutely cannot over look while purchasing a family health insurance plan.

1.     Ensure that your cover is substantial: Make sure that your insurance amount is more than sufficient for your family healthcare needs. You need to research the healthcare costs in your city and calculate a rough estimate that you think should be substantial. Insurers provide you with a list of diseases and critical illnesses, make sure that you’re covered for most if not all of them.

2.   Check the network of health insurance: Insurers usually operate with a network of hospitals, this means your family health insurance plan is applicable if and when you or a family member are admitted to a hospital within the network of hospitals in your insurance policy. Ensure that the hospitals nearest to you and the hospitals that you prefer fall within the network of your insurance.

3.   Go for cashless cover: It often becomes difficult to arrange for all the cash that is required when you or one of your family members is admitted to the hospital. Cashless cover allows you to seek treatment, without having to pay cash upfront. Always ensure that your family health insurance plan allows you this cover.

4.  Get an early start: There is no right age to buy health insurance for yourself and your family. You can buy insurance when you’re in twenties or even when you’re in your forties or fifties. So start as early as you can and secure your future. 

How you can create wealth by investing in tax saving plans

People invest in endowment plans because they are a good investment opportunity; they want to save money for their future plans, their children, their education etc. But one of the biggest benefits of an endowment plan is that they are a great way to save tax. Under Section 80C of the Income Tax Act, the government does not levy a tax on the money you invest or that goes into your insurance plans or endowment plans.

Tax saving measures can help you save an enormous amount of money. As important it is to invest in funds, it is also imperative to save money. And, claiming tax deductions is one of the ways for doing the latter. Because, the money you save from tax deductions could be further invested into equity or other long-term funds to grow your wealth.

ULIPs or unit linked insurance plans are a great way to invest your money while at the same time insuring yourself. Here’s how a ULIP plan works, the premium that the policy holder pays are divided into two parts, one goes to the life insurance and the other goes to mutual funds as an investment. A ULIP holder has the option of either investing in equity or in debt. An aggressive policyholder will choose to invest his money in equity while a conservative policyholder might choose to invest his money in debt. The money is invested during the term of the policy which may range between 5 to 15 years.

Apart from ULIPs the government has devised a number of plans and schemes to help people save on their income tax. These tax savings plans will help you save money and in turn create wealth. Some of these savings plans are, the public provident fund (PPF), the Rajiv Gandhi Equity Saving scheme, the voluntary provident fund, national saving certificates and the Sukanya Samridhi account.

Best Tax Saving Investment Options for 2016-2017

January is a month when we all re-evaluate our lives. We want to change everything from our clothes to our diets and most of all our finances. This is the time to get your finances in order and to consider saving plans and investment options. The New Year brings with it a new wave of enthusiasm. Especially this year, after demonetization and endless promises of change, we Indians are truly looking forward to a happy financial year.

Here are the six of the top tax saving investment plans that you need to put your money into to make the best of 2017:

1.      Life Insurance Plan: Life insurance plans are an investment everyone should make. It is the first step to your financial planning. It should be treated more as an investment than an insurance policy. When choosing life insurance one should opt for term insurance as it comes with low risk and high coverage. A life insurance premium is something you should add to your monthly saving plan.

2.      ELSS Tax Saving Mutual Fund: They offer the highest returns compared to any other tax saving investment plan in the country. The returns are not guaranteed but if you can afford to take some risk, your earnings can range between 12 – 15%. You can even opt for the dividend scheme and earn regular income from your investment.

3.      Public Provident Fund: This fund provides maximum tax saving benefit for the people. The interest rates are updated by the government on a yearly basis. Most banks offer a PPF facility for its customers. This scheme ensures maximum tax saving benefit for its users. At the moment the government allows around 8% interest in PPF.

4.      Rajiv Gandhi Equity Saving Scheme: This scheme offers benefits for first time investors with income upto 12 lacs. The maximum investment allowed in this scheme is only Rs.50,000 this can be invested in stocks or mutual funds. This scheme gives you a tax exemption of upto Rs.25,000.

5.      Voluntary Provident Fund: This fund is the contribution of an employee to his provident fund, it is beyond the 12% EPF.  This fund carries the same rate of interest as the Employee Provident Fund. The current rate for EPF is 8.8% per annum. However, investment in VPF can only be withdrawn during retirement and not before.

6.      Unit Linked Investment Plan (ULIP): This plan provides life risk coverage. It can provide between 5-11% returns, but they are not guaranteed. The ULIP should be held for a minimum duration of 10-12 years to seen maximum returns.

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