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What is a Savings and Investment Plan?


Every individual has dreams and goals that go beyond the bare necessities of life. To fulfil these, one often needs savings that have been accumulated over a period of time. Savings and investment plans help you to save your income in a systematic manner to fulfil various goals.

Savings and investment plans also act as a great means to plan your retirement and your children’s future.


Why is it important to invest?


Whether you wish to send your child abroad for higher education or go for 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 that 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 could seem never-ending. That’s why you need to think of wealth building rather than just savings. Investment plans help you to utilize your savings and grow them over time for future needs and goals.

ULIP plan

What are the different types of Investments?


Unit Linked Insurance Plans (ULIPs)

A ULIP is a life insurance plan with an additional feature of investing your money for future financial goals. This means that you get the dual benefit of protecting your family as well as securing your own future.

A ULIP also provides tax benefits as the premium or amount invested into the ULIP is exempted from tax under Section 80C. The amount received on maturity of this investment plan, is also tax exempted under Section 10(10D) of the Income Tax Act, 1961.

Mutual Funds

When different investors pool in their money and invest in a company’s stocks or bonds, these are called mutual funds. Usually, a mutual fund is shared by a large number of investors and is managed collectively to earn the highest possible returns. The person driving the mutual fund is a professional fund manager.

Mutual funds offers a diversified portfolio in order to spread the risk.


Stocks or Shares

Stocks are shares of ownership in a particular company which means that you own a small part of that company. Share prices tend to fluctuate with the company's fortunes, nation’s economic standing and the market in general.

Bonds

Companies and government need money for expansion and other growth initiatives. To gather funds for these activities, they issue bonds to the public which essentially mean that you are lending money to them. The interest on each bond could be paid to you regularly and at the end the face value is returned. Alternatively, you can also sell the bond before expiry if you need.

This type of investment is considered relatively safe as compared to other instruments. High rated bonds and government securities are lower risk, but they also offer lower rate of interest.


Public Provident Fund (PPF) & Similar Investments

PPF is a saving scheme offered by the Indian Government, allowing investors to deposit funds for a fixed period and earn returns on their savings.

PPF investments are safe, easily accessible, simple to understand and tax-free, making them a popular investment avenue for most individuals. The interest rate offered by the Public Provident Fund is 8 percent, as applicable from 1st October 2018 (Source: Ministry of Finance).

Benefits of Investing in a ULIP


  • Flexibility:
    ULIPs let you choose the premium amount, as per your requirement. They also give you the option of selecting funds as per your choice. Many ULIPs also offer the possibility of increasing your premiums during your premium paying term. One can opt for a particular plan based on their financial goals and risk appetite.
  • Liquidity:
    No matter what your premium paying term or policy term is, after the lock-in period of 5 years, you can fully or partially withdraw funds from your account when you are in need of urgent funds.
  • Systematic Savings:
    ULIPs give you the benefit of putting aside a chunk of your income and save it for future use.
  • Wealth Accumulation:
    ULIPs not only let you save your earnings, but also help in growing wealth by allocating it to market-linked funds.
  • Tax Benefit u/s 80c:
    Premiums paid are deductible from taxable income under Section 80C. The maturity amount received is also exempt subject to conditions under Section 10(10D) of the Income Tax Act, 1961.

Why Should You Buy a ULIP?


Saving for Future Goals

When it comes to fulfilling future goals such as buying a new home, child’s education, retirement planning etc., savings are a must. Without long term savings 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.

Family’s Protection

ULIP is a life insurance plus investment plan that offers a life cover to the policyholder. In case of an unfortunate death, the dependant family of the policyholder will still be financially secured.

Provides Tax Benefit

All premiums are exempt from tax under Section 80C. The maturity amount received is also exempt subject to conditions under Section 10(10D) of the Income Tax Act, 1961.

High Returns

Unlike other investment plans, ULIP gives you the advantage of switching between funds depending upon their performance. This helps you to get a higher return on your invested amount by monitoring the growth.

Steps to Buy a Term Insurance Plan Online

Step1 >> Choose your plan

Edelweiss Tokio Life - Wealth Gain+

A ULIP that provides life cover and lets you accumulate wealth with 100% refund of mortality charges.


  • Life cover
  • 0% Allocation Charges
  • Equity Blue Chip & Gilt Fund Offerings
  • 100% Return of Mortality Charge
  • Loyalty & Booster additions for longer investments
Explore More

Edelweiss Tokio Life - Wealth Plus

A new generation ULIP that meets your investment needs by investing 100% of your premium and further allocating an additional amount up-to 7% to your policy.

  • Life cover
  • Additional allocations on premiums
  • Option to secure your child’s future
  • Option to partially/fully withdraw after 5 years
Know More

Edelweiss Tokio Life -
Wealth Ultima

A ULIP that comes with a unique combination of systematic monthly plan (SMP), to help with your wealth accumulation and safeguard you from market volatility.

  • Systematic monthly plan for investing
  • Transfer money from one asset class to another
  • Systematic Withdrawal Plan
  • Guaranteed & Booster additions for loner investments
Know More

Step2 >> Choose your premium and policy term


Step3 >> Make Payment

You can opt from monthly, half-yearly or yearly mode of payment and choose from a list of payment options such as:

  • Credit Card
  • Debit Card
  • Netbanking
  • Online Wallets

How can you save tax by investing in a ULIP?


All premiums are deductible from taxable income under Section 80C. The maturity amount received is also exempt subject to conditions under Section 10(10D) of the Income Tax Act, 1961.

Tax Exemption under Section 80C on Premium Paid:
The premium paid in a financial year is eligible for deduction under section 80C of the Income Tax Act. An individual or a HUF can claim this deduction under Section 80C.
The premium paid by a tax payer is eligible for deduction irrespective of which Life Insurer you choose. Premium paid towards a life cover taken with any insurer that is approved by the Insurance Regulatory and Development Authority of India (IRDAI), is eligible for a Section 80C deduction.
In order to claim deduction under section 80C, the premium paid should not exceed 10% of the sum assured. Further, here it is important to note that covering the life of an individual with a disability referred to under Section 80U or a disease referred to under Section 80DDB, the requirement to claim the deduction under Section 80C is that the premium should not exceed 15% of the sum assured.



term plan

Tax Exemption under section 10(10D) on Maturity amount received
The maturity amount in a ULIP is fully exempt from Income Tax under Section 10(10D).
When the premium paid is more than 10% of the sum assured for policy issued after 1st April 2012 or more than 20% for policies issued prior to 1 April 2012, the maturity amount received from life insurance policy is fully taxable.


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Frequently Asked Questions



  • What affects the growth percentage of my funds in an investment plan?

    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.

  • How do I make the most out of the funds in a ULIP?
  • What are the types of funds you offer in your savings plan?
  • How can I see the performance of my funds in a savings plan?
  • When will my money invested in a savings plan start profiting?
  • Are ULIPs safe as an investment plan?
  • Are investment plans like endowment plans safe?
  • Is a term plan better than a ULIP?
  • What’s the difference between a ULIP and an endowment plan?
  • What’s the difference between mutual funds and ULIPs?
  • Is the return in Edelweiss Tokio Life – GCAP guaranteed?
  • Do I get any tax benefit?
  • Do I get death benefit?
  • Do I get additional benefit on my returns?

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