Diwali is a much-awaited festival that celebrates new beginnings, happiness, and prosperity. It also heralds the auspicious beginning of planning for your financial journey for the coming year. Every individual and family’s financial objectives and journeys are varied; however, one thing remains constant across them all – timely evaluation of financial goals and research-backed planning helps mitigate the economic effects of unforeseen events.
Hence, it is crucial to consider life goals such as a child’s education, marriage expenses, etc. vis-à-vis current spending/ income patterns. After careful consideration of financial goals, individuals must consider the myriad options available to achieve these objectives. Most of these are longer-term investments and there are plenty of avenues which help meet these goals.
To put things into perspective, Covid-19 adversely impacted economies across the globe from a health as well as economic perspective. Many individuals had to face job losses or income deductions due to market volatility brought on by uncertainty of the new global and national economic paradigm. This also forced many individuals and families to compromise on typically major milestones in any Indian family’s journey – some postponed higher education, some put off purchasing a new home, and some even paused their marriage plans. The backing and security provided by an investment product which guarantees regular income combined with a sum on maturity would have worked wonders for many of these families.
This scenario has reinforced the need for a financial product which offers insurance as well as guaranteed returns on investment and is inflation proof. Guaranteed Life Insurance products offered are one such group of products in the market. They are non-participating life insurance plans which offer a combination of life insurance and returns on investment. This instrument offers extreme flexibility by offering a life cover for the entire policy term while you may choose to pay a premium only for a limited period basis your respective insurance policy. In the unfortunate death of the life insured, the nominee receives the sum assured paving the way for them to achieve their major life milestones, unhindered.
Guaranteed Life Insurance Plans can also be customized by opting for premium payment terms and policy terms suitable to current income and financial goals thereby encouraging individuals to live the present while investing for their future. Guaranteed Products are further divided into two categories; Guaranteed Savings Plans and Guaranteed Income Plans. A guaranteed Savings Plan is a wealth accumulation plan that provides a lump sum benefit at maturity. A guaranteed Income Plan offers assured income payout and lump sum benefit at the end of the policy term. What’s more, these products also offer tax benefits under Section 80C and Section 10(10D), as per the Income Tax Act, 1961.
The longer your policy term, the better it is for you and your loved ones as this strengthens the financial protection net of the insured. These products also offer multiple add-ons available to insulate your investments and, thereby, your future further ensuring that you can reap the benefits over a period of time. All in all, Guaranteed Products are suitable for all age groups to create wealth and attain financial security at various stages of their financial journey, especially for risk-averse investors as they offer stability during times of market volatility and uncertainty. Many individuals spend a considerable amount of time scouting for investment avenues and insurance plans which will meet their requirements. Guaranteed Products are distinct in terms of the benefits and flexibility they offer.
Hence, this Diwali, rather than getting into a sprendthrift mode, invest in your future and make a long lasting choice of being invested in a Guaranteed Life Insurance Plan. This will certainly empower you and your loved ones to achieve life’s big milestones. The thumb rule remains same for everyone, the early you invest the better you get.
(By Akshay Dhand, Appointed Actuary, Canara HSBC Life Insurance)
Disclaimer: This is the author’s personal opinion. Readers are advised to consult their financial planner before making any investment.