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.