Zindagi Gulzar Hai – Life is like a Garden!
It’s filled with the fruits of the past and the blossoming buds of tomorrow. However, it is also filled with the thorns of uncertainties and eventualities. Most of us, in our worries about the uncertain, forget to enjoy our lives.
Edelweiss Tokio Life Insurance offers solutions in the form of Savings and Investment Plans. These plans offer protection for life as well as the opportunity for wealth creation, so that you can reap its benefits in the future and enjoy the fragrance of flowers!
Savings Plans, or Saving and Investment Plans in India, are financial products that provide the opportunity to create wealth for the future. They help you meet your financial goals by accumulation wealth over a period, like child’s education, buying a house, car, or even planning your dream vacation! Savings and investment plans help you save in a systematic manner, protect your loved ones and save on taxes.
A savings plan is an insurance plan that combines savings and life cover under a single plan. The premium payments are divided into two, i.e., to build a savings corpus, and to provide life cover to the you (policyholder) and your family. People choose savings plans because they offer guaranteed1 returns on maturity.
An investment plan is a Unit Linked Insurance Plan (ULIP) that combines the benefits of investments and life cover under a single plan. Premiums paid are invested in market-linked investment instruments, as well as to provide life cover to you and your family. Though ULIPs are moderate-to-high-risk plans, they are mainly chosen for their potential to generate higher returns.
Savings and investment plans also act as a great means to plan your retirement and to invest in your child’s future.
You pay a premium towards securing a Guaranteed¹ Income. The premium can be paid as a single, lumpsum pay, for a limited period, or for the entire policy tenure.
The premium is used by the insurance company for two aspects – offering life cover and investing in no-risk, non-market-linked avenues for guaranteed¹ growth of wealth.
The life cover continues for the entire policy term. If you face any uneventful situation during this term, the sum assured is the death benefit that the authorised beneficiary from your family will receive.
On survival till the end of the policy term, the wealth invested accrues interest as per pre-determined rate of interest, and the guaranteed¹ amount is paid out at specified intervals and on maturity.
The insurance company also offers certain fund additions, such as Loyalty Additions, Booster Additions and Maturity Additions throughout the policy term².
You pay a premium towards securing a Guaranteed¹ Income. The premium can be paid as a single, lumpsum pay, for a limited period, or for the entire policy tenure.
The premium is used by the insurance company for two aspects – offering life cover and investing in no-risk, non-market-linked avenues for guaranteed¹ growth of wealth.
The life cover continues for the entire policy term. If you face any uneventful situation during this term, the sum assured is the death benefit that the authorised beneficiary from your family will receive.
On survival till the end of the policy term, the wealth invested accrues interest as per pre-determined rate of interest, and the guaranteed¹ amount is paid out at specified intervals and on maturity.
The insurance company also offers certain fund additions, such as Loyalty Additions, Booster Additions and Maturity Additions throughout the policy term².
You pay a premium towards the ULIPs. The premium payment modes could be Single Pay, Limited Pay, or Regular Pay.
The insurance company invests the money in market-linked investment avenues, also known as funds.
You get to choose the type of funds you wish to invest in based on your risk appetite. Equity funds are for high-risk investors, debt funds for low-risk and hybrid funds for medium-risk investors.
Life cover is available for the entire policy term and is the sum assured that the authorised beneficiary receives on your demise.
The invested money grows, basis market forces and the accumulated amount is paid to you (the policyholder) on maturity.
If you die during the policy term, either the sum assured (minus any partial withdrawals) or the accrued amount of investment (the fund value) or 105% of total base premiums paid till date, whichever is higher, is paid to the family members (beneficiary).
You pay a premium towards the ULIPs. The premium payment modes could be Single Pay, Limited Pay, or Regular Pay.
The insurance company invests the money in market-linked investment avenues, also known as funds.
You get to choose the type of funds you wish to invest in based on your risk appetite. Equity funds are for high-risk investors, debt funds for low-risk and hybrid funds for medium-risk investors.
Life cover is available for the entire policy term and is the sum assured that the authorised beneficiary receives on your demise.
The invested money grows, basis market forces and the accumulated amount is paid to you (the policyholder) on maturity.
If you die during the policy term, either the sum assured (minus any partial withdrawals) or the accrued amount of investment (the fund value) or 105% of total base premiums paid till date, whichever is higher, is paid to the family members (beneficiary).
Whether you wish to send your child abroad for higher education or go on a European holiday in the next 5 years, all your financial goals require you to invest in advance.
Your income is limited, while your needs are many. Apart from your basic and immediate needs, which you may spend a considerable amount of your income on, you have long term needs that need planning in advance.
It is recommended that before using up your income for monthly consumption, you save for future expenditure first. This often poses a problem, as your immediate needs may seem never-ending. That’s why you need to think of wealth building rather than just savings. Investment plans help you utilize your savings and grow them over time for future needs and goals.
It is important to have a robust monetary fund to meet emergency or future financial needs. To accumulate this fund, it is essential to save or invest a part of one’s income. With a savings plan, you can ensure guaranteed1 returns at the end of the plan’s tenure to fulfil your financial goals and ensure a steady flow of income, while an investment plan can offer high returns that can help you grow your wealth and fulfil your financial requirements.
Additionally, having the benefit of a life cover also makes a savings and investment plan ideal for protecting your family against financial burdens.
These are some of the main benefits that a savings and investment plan can offer:
When it comes to fulfilling future goals such as buying a new home, children’s education, retirement planning etc., savings are a must. Without long-term saving plans, it is difficult to balance short term needs and future goals. ULIPs help you save systematically and help you plan for these future goals.
A ULIP is a life insurance plus investment plan that offers a life cover to you (the policyholder). In case of an unfortunate death, your dependent family will still be financially secured.
No matter what your premium paying term or policy term is, after the lock-in period of 5 years with your ULIPs, you can fully or partially withdraw funds2 from your account when you need urgent funds.
ULIPs give you the benefit of putting aside a chunk of your income and saving it for future use.
ULIPs not only let you save for your future, but also help in growing wealth by allocating it to market-linked funds.
Tax Benefit3 under Section 80C
Premiums paid for Savings and Investment Plans help you save taxes up to Rs. 46,800* every year u/s 80C. The maturity amount received is also covered under tax benefits3 u/s 10(10D) of the Income Tax Act, 1961.
When it comes to fulfilling future goals such as buying a new home, children’s education, retirement planning etc., savings are a must. Without long-term saving plans, it is difficult to balance short term needs and future goals. ULIPs help you save systematically and help you plan for these future goals.
A ULIP is a life insurance plus investment plan that offers a life cover to you (the policyholder). In case of an unfortunate death, your dependent family will still be financially secured.
No matter what your premium paying term or policy term is, after the lock-in period of 5 years with your ULIPs, you can fully or partially withdraw funds2 from your account when you need urgent funds.
ULIPs give you the benefit of putting aside a chunk of your income and saving it for future use.
ULIPs not only let you save for your future, but also help in growing wealth by allocating it to market-linked funds.
Tax Benefit3 under Section 80C
Premiums paid for Savings and Investment Plans help you save taxes up to Rs. 46,800* every year u/s 80C. The maturity amount received is also covered under tax benefits3 u/s 10(10D) of the Income Tax Act, 1961.
As the name suggests, a guaranteed¹ returns plan gives you assured returns on the completion of the maturity period. This assurance and predictability of cash flows make your long-term financial plans easier to manage and execute. You can even opt for monthly savings plans for regular income. You can feel secure to have funds when you need them.
What are the benefits of buying a guaranteed¹ returns plan?
A guaranteed¹ returns plan is a risk-free investment, as the returns received are guaranteed. On survival up to maturity date, you will receive guaranteed income. This is contradictory to market-linked returns, where the income is basis market performance.
Along with safety and security, choosing a guaranteed¹ returns plan also lets you avail tax benefits³. While planning for your taxes, it is advisable to choose instruments that serve two purposes: tax saving up to Rs. 46,800* with premiums u/s 80C and returns that do not involve tax³ deductions u/s 10(10D).
A guaranteed1 returns plan makes provisions for flexible premiums. Based on your income and liquidity levels, choose the amount and mode of premium payments.
In your portfolio, a guaranteed1 returns plan takes the place that you want it to take. It allows you to choose your own maturity period; you can choose for how long you want to pay the premium and maturity period. You can choose between a long-term or a short-term savings plan. This allows for every individual buy a plan which is most convenient to him and falls within his financial goals.
A guaranteed¹ returns plan is a risk-free investment, as the returns received are guaranteed. On survival up to maturity date, you will receive guaranteed income. This is contradictory to market-linked returns, where the income is basis market performance.
Along with safety and security, choosing a guaranteed¹ returns plan also lets you avail tax benefits³. While planning for your taxes, it is advisable to choose instruments that serve two purposes: tax saving up to Rs. 46,800* with premiums u/s 80C and returns that do not involve tax³ deductions u/s 10(10D).
A guaranteed1 returns plan makes provisions for flexible premiums. Based on your income and liquidity levels, choose the amount and mode of premium payments.
In your portfolio, a guaranteed1 returns plan takes the place that you want it to take. It allows you to choose your own maturity period; you can choose for how long you want to pay the premium and maturity period. You can choose between a long-term or a short-term savings plan. This allows for every individual buy a plan which is most convenient to him and falls within his financial goals.
An endowment plan is a type of life insurance policy, which gives you the dual benefit of a life cover and future savings. It enables systematic savings and over a period that would help you in getting a lump sum amount on surviving the policy term.
An endowment policy most often gives you guaranteed1 returns and hence is good for those who do not wish to take higher investment risks. You will get sum assured on a fixed date in future as per the policy terms and conditions. However, in case of your (the policyholder’s) sudden death, the insurance company will pay the sum assured (plus the bonus4, if any) to the nominee of the policy. Besides, it is also useful to secure yourself or your family post-retirement or to meet various financial needs such as funding for children's education and/or marriage or buying a house.
Why should you buy an Endowment Policy?
Endowment policies offer low returns available with low risk. It offers the dual benefit of death cover and savings feature. These policies offer upfront guaranteed1 returns, and they are not linked to the market’s performance. The guaranteed1 returns such as guaranteed1 additions remain fixed and are payable on death or maturity (as applicable).
The insurance company usually declares bonuses4, depending on how the investments have performed. When an insurance company makes profits from its investments, it distributes a part of funds to you (the policyholder) at the end of each financial year. The profits or surplus of a life insurance company is determined after the valuation of its assets and liabilities. Under an endowment policy, Simple Reversionary Bonus and Terminal Bonus are added to the sum assured and payable on death or maturity under the policy. Simple Reversionary Bonus is declared annually and accrued to be payable on death or maturity claim. Terminal Bonus a type of loyalty bonus and is paid only at the time of maturity of the policy.
With endowment policies, the premium amount goes towards the mortality component and to earn returns. Under this policy, you can avail maturity benefit or in case of any unfortunate event, your family can avail the sum assured.
Endowment policies offer low returns available with low risk. It offers the dual benefit of death cover and savings feature. These policies offer upfront guaranteed1 returns, and they are not linked to the market’s performance. The guaranteed1 returns such as guaranteed1 additions remain fixed and are payable on death or maturity (as applicable).
The insurance company usually declares bonuses4, depending on how the investments have performed. When an insurance company makes profits from its investments, it distributes a part of funds to you (the policyholder) at the end of each financial year. The profits or surplus of a life insurance company is determined after the valuation of its assets and liabilities. Under an endowment policy, Simple Reversionary Bonus and Terminal Bonus are added to the sum assured and payable on death or maturity under the policy. Simple Reversionary Bonus is declared annually and accrued to be payable on death or maturity claim. Terminal Bonus a type of loyalty bonus and is paid only at the time of maturity of the policy.
With endowment policies, the premium amount goes towards the mortality component and to earn returns. Under this policy, you can avail maturity benefit or in case of any unfortunate event, your family can avail the sum assured.
A unit linked insurance plan (ULIP) is a life insurance plan with an additional feature of investing your money in the market for future financial goals. It also provides tax benefits3 as the premium paid helps you save taxes up to Rs. 46,800* u/s 80C. The amount received on maturity is also covered under tax benefits3 u/s 10(10D) of the Income Tax Act, 1961.
Why should you buy an ULIP Plan?
Market-linked returns
With a lock-in period of just 5 years, ULIPs offer you the ability to opt for a short-term investment plan for short-term financial goals. Or you can choose to stay invested for the long-term by choosing a longer policy tenure.
ULIPs allow for partial withdrawals2 from the fund after the lock-in period, making ULIPs a highly liquid financial instrument.
ULIPs offer a choice of funds for investment – equity funds for high-risk investors, debt funds for low-risk investors, and hybrid or balanced funds for mid-risk investors. Thus, no matter your risk-taking capabilities, you can choose a ULIP investment that suits your specific needs.
Market-linked returns
With a lock-in period of just 5 years, ULIPs offer you the ability to opt for a short-term investment plan for short-term financial goals. Or you can choose to stay invested for the long-term by choosing a longer policy tenure.
ULIPs allow for partial withdrawals2 from the fund after the lock-in period, making ULIPs a highly liquid financial instrument.
ULIPs offer a choice of funds for investment – equity funds for high-risk investors, debt funds for low-risk investors, and hybrid or balanced funds for mid-risk investors. Thus, no matter your risk-taking capabilities, you can choose a ULIP investment that suits your specific needs.
Though there is no perfect time to invest in a savings and investment plan, it is recommended that you start at an early age. When you begin earning an income, investing in a savings and investment plan enables you to save or invest over a long period of time, which will, in turn, help you increase your financial corpus.
Below are the following ways in which buying a savings and investment plan early can help you.
1. Power of compounding :
“Compound interest is the 8th wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”
Albert Einstein
What he meant was that if you invest smartly for the long term, you will reap the benefits of compounding.
Compounding simply means investing your money in order to grow it further. Your wealth accumulation depends upon how long you stay invested.
Here is how you can calculate compounding:
2. Risk Appetite
The younger you are, the fewer responsibilities or liabilities you have. Historically, it has been shown that equities perform better than other assets even though they do come with a fair bit of risk. Investors can switch from one fund option to another as per the market movements and outlook. Most ULIPs let you make unlimited switches between funds.
3. Patience and Discipline Pays
If you simply save your money in a bank, the tendency to withdraw the money is higher, and this does not lead to any growth. But if you remain patient and invest your money, systematically for a long time, it will give you good returns.
Getting into the habit of saving systematically early on helps in easing the stress of financial liabilities when you become older. Being able to start saving early for your future goals gives a very big financial advantage to young professionals these days.
4. Fight Inflation
A financial instrument like ULIP offers you flexibility to invest in a portfolio of stocks, which minimizes risks. You can also choose the funds you want to invest in as per your risk appetite. Regular investments over a long period enable you to give time to your money in market, helping you build a larger corpus to achieve your life goals and stabilize your funds against market inflation.
Every individual, young or old, married or unmarried, must save for a rainy day. Having a corpus to fall back upon assures a stress-free life and helps you plan your finances efficiently. There are multiple savings options in India to choose from. While the choice depends completely on your financial goals, savings and investment plans offer a range that suits everyone.
Following people should buy a Savings and Investment Plan:
Advantages
Disadvantages
Edelweiss Tokio Life Insurance Company Limited was established in 2011 and has, ever since, developed a wide range of insurance solutions for education, impaired health, wealth accumulation, wealth enhancement, income substitution, and retirement funding.
For a joint venture between Edelweiss, a leading Indian financial services company, and Tokio Marine, a Japanese life insurance company, Edelweiss Tokio Life Insurance is the ideal choice for the following reasons:
As the funds in an investment plan like a ULIP are linked with the share market, their performance is directly affected by the very market. The performance of any ULIP is hence market driven.
Savings and investment plans are safer as they give you guaranteed returns in case you outlive your policy term. In the event of your sad demise before the end of your policy term, your nominee would get the sum assured.
There are various plans wherein tax assets can claim benefits for the amount invested in savings and investment plans, such as ULIP. Under the section 80 C and 80 D of Indian Income-tax Act, an individual is entitled to a deduction on the investment done or premium payment made under savings plan.
Investment plans offer to help individuals in disciplined and periodic investment into different funds overtime so as to achieve their future financial goals.
Savings and Investment plans are customized investments avenues for an individual with the objective to create a disciplined and periodic investment in various funds and finally achieve their future long-term financial goals along with an element of insurance support.
Here are some of the best saving investment plans available in Indian market:
• Participating Endowment Plan
• Unit Linked Investment Plans (ULIP)
• Guaranteed Return Plan
• Money Back Plan
• Monthly Income Plan
There are two kinds of funds in an investment plan – equity fund and debt fund. An equity fund gives you high returns but also carries high risk. A debt fund is comparatively stable, is less risky and give you moderate but guaranteed returns.
Endowment plans are safer than most investment plans as they give you guaranteed returns in case you outlive your policy term. In the event of your sad demise before the end of your policy term, your nominee would get the sum assured.
A term plan gives your nominee the life cover amount (which is very high) in case of the policyholder’s sad demise. But if the policyholder outlives the policy term, he gets nothing. In a ULIP, which is an investment plan, you get a certain amount of returns based on the funds you’ve invested in, after the investment period. Bu if you expire before your policy term, your nominee would get the fund value up to that point.
* Tax benefit of ₹ 46,800 is calculated at highest tax slab rate of 30% (in addition to income tax, cess of 4% is also applicable) on life insurance premium u/s 80C of ₹ 1,50,000. As per provisions of Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.
0 - Provided the premium paying term is more than or equal to 10 years.
1 - This is applicable only if all due premiums are paid and the policy is inforce.
2- For more details please read the sales brochure separately.
3 - As per provisions of Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.
4 - If declared, Cash Bonus is a non-guaranteed bonus which may be payable based on the performance of the participating fund of the Company.
9- Riders are Optional and available at extra cost.
^¹ - Festival Of Insurance Awards 2020 on Sahara Samay Hindi News Channel on 27th December, 2020 - YouTube. For CSR Activity and Digital Sales Channel (Insurance Alerts Excellence Awards 2020)
^² - https://cloud-user-recordings-ffmpeg-converted-prod.s3-ap-south-1.amazonaws.com/recordings/ccd117b0-be48-11eb-9782-b590083730e8/3b7e25a3-b9b4-47b0-9f68-70eeb8062d60/ccd117b0-be48-11eb-9782-b590083730e8_0001_474830a2.mp4 (Awarded by Quantic Business Media BFSI Excellence Awards 2021)
^³ - https://thealdenglobal.com/inflection-conference-awards/
^⁴ Claim statistics are for Financial Year 2020-21 and is computed basis individual claims settled over total individual claims for the financial year. For details, refer to Public Disclosures in our Website.
Edelweiss Tokio Life – Premier Guaranteed Income is only the name of an Individual, Non-Linked, Non-Participating, Savings, Life Insurance Product and does not in any way indicate the quality of the plan, its future prospects or returns. Please know the associated risks and the applicable charges from your Personal Financial Advisor or the Intermediary. Tax benefits are subject to changes in the tax laws. The tax benefits under this Policy may be available as per the prevailing Income Tax laws in India. For more details on risk factors and terms and conditions, please read sales brochure carefully before concluding a sale. UIN: 147N072V01
Edelweiss Tokio Life – Active Income Plan is only the name of the Individual, Non-Linked, Par, Savings, Life Insurance Product and does not in any way indicate the quality of the plan, its future prospects, or returns. Please know the associated risks and the applicable charges from your Personal Financial Advisor or the Intermediary. Tax benefits are subject to changes in the tax laws. For more details on risk factors and terms and conditions, please read sales brochure carefully before concluding a sale. UIN: 147N065V01
The Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender/withdraw the monies invested in Linked Insurance Products completely or partially till the end of the fifth year.
Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. Edelweiss Tokio Life Insurance Company Limited is only the name of the Insurance Company and Edelweiss Tokio Life – Wealth Secure+ is only the name of the unit-linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects, or returns. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. Please know the associated risks and the applicable charges from your Personal Financial Advisor or the Intermediary or policy document of the Insurer. The premium paid in unit linked life insurance policies are subject to investment risk associated with capital markets and the unit price of the units may go up or down based on the performance of investment fund and factors influencing the capital market and the policyholder is responsible for his/her decisions. For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale. UIN 147L062V01
Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. Edelweiss Tokio Life Insurance is only the name of the Insurance Company and Edelweiss Tokio Life – Wealth Plus is only the name of A Unit Linked, Non-Participating, Individual, Life Insurance Product and does not in any way indicate the quality of the contract, its future prospects, or returns. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. Please know the associated risks and the applicable charges from your Personal Financial Advisor or the Intermediary or policy document of the Insurer. The premium paid in unit linked life insurance policies are subject to investment risk associated with capital markets and the unit price of the units may go up or down based on the performance of investment fund and factors influencing the capital market and the policyholder is responsible for his/her decisions. Tax benefits are subject to changes in the tax laws. For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale. UIN: 147L055V03