There is no point in keeping your money idle in savings bank accounts or as liquid cash at home. It’s better that you invest them in instruments that can help you maximise returns on the same. Endowment plans and ULIPs are two avenues where you can invest. Investing in either of these plans ensures that your money works for you and gives you returns on the same.
Endowment plans are life insurance plans that provide a mix of insurance and investments with secured and guaranteed returns. Edelweiss Tokio Life Wealth Builder is an example of an endowment plan which you can use for your investment planning. For instance, if you are 35 years of age and a non-smoker, by investing Rs. 50000/- per annum for a premium payment term of 12 years and policy term of 30 years, you can get a maturity benefit of Rs. 22,29,000/- which can take care of your retirement needs. If any time during the policy term, you meet with an untimely demise, your spouse will receive the Sum Assured of Rs. 6,50,000/- with which she can also live her life with dignity.
Unit Linked Insurance Plans like Edelweiss Tokio Life Wealth Accumulation(Accelerated Cover) are market linked insurance plans where the premium is divided into two parts. One part goes towards coverage of life and the other part goes towards investment in market-linked instruments to maximise the returns. For instance, for a Sum Assured of approximately 4 lacs, you will pay a premium of Rs. 27,000/- for 10 years with a policy term of 30 years. Your maturity benefit will depend upon the market conditions, but assuming an interest rate of 8%, the maturity benefit will be approximately 7 lacs. You also have the option of switching your investment between one fund and another. Funds are the category of stocks in which your money is invested. This option of selecting funds rests with you and you can switch between funds depending on your market outlook and risk appetite. If you are not averse to taking risks and are in search of higher returns, you can opt for this.
So, don’t let you savings remain idle. Invest them in instruments that have the potential to maximise your savings.