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Top performing investment plans, better than mutual funds.
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Benefits for 80C, 10(10D) and no LTCG.

Investments in India: Why Investing is Important & Where to Invest?

Investments are essential in today's world, just earning money from your primary source of income is not enough. People work hard towards earning money, but that may not be adequate to lead a comfortable life and fulfil future goals. To fulfil your dreams, you need to make your money work hard for you as well. This is the primary motive why you should invest. Money being idle in your bank account or locker is an opportunity lost. You should invest your money smartly to earn returns out of it.

What are investment plans?

At the various stage of life, you need funds. You need to build the corpus for your child's education, marriage, and retirement savings. When you start looking for ways to build funds, you tend to look for investment plans where your fund grows while you sit back and relax.

Investment plans are financial products that provide an opportunity for investors to create wealth for the future.Investment planshelp individuals in making a disciplined and periodic investment into different wealth-building options to achieve their future financial goals.

Investment plans help you to save regularly and be prepared to meet your family's financial needs in the future. There are various online investment plans which offer numerous benefits that help achieve your specific financial goals with the investment made according to your risk appetite.

Types of investment plans

Investors in India have several investment options to choose from. Some are traditional investment plans that have been used from decades, while some are relatively newer that have become popular in recent years. Below listed are some of the popular investment options available in India:

  • Stocks
  • Mutual Fund
  • Unit Linked Insurance Plans
  • Fixed Deposits
  • Recurring Deposits
  • Public Provident Fund (PPF)
  • Employee Provident Fund
  • National Pension System

Unit Linked Insurance Plan

Generally, referred to as a ULIP, Unit Linked Insurance Plan is a combination of insurance and investment. A part of the premium paid by investors is used for providing insurance cover, and remaining part of the premium is invested in the capital market through investment funds. Investment funds created by the life insurance company invests in stocks, debts, money market funds, depending on the preference of the investor. ULIP plans offer transparency about the investment of your funds which you can track and evaluate as Net Asset Value (NAV). ULIP provides both investment and coverage benefit. As a survival benefit, you get the maturity payout depending on the prevailing unit price of the investment. In case of death of the policyholder during the policy term, the nominee will receive either the sum assured or fund value or both, depending upon the ULIP type.

Best ULIP plans in India 2020

While there are various ULIPs available in the market, certain plans stand out because of the returns and benefits they provide for investment and insurance purposes. A few of them are:

  • Bajaj Allianz Future Gain
    • Entry age: 1 to 60 years
    • Minimum premium: Rs. 25,000 per annum
    • Premium allocation charge: 0% to 9.0%
    • Policy admin charge: Rs. 33.33 per month
    • Annual free switches: Unlimited
  • PNB Metlife Smart Platinum
    • Entry age: 7 to 70 years
    • Minimum premium: Rs. 30,000 for annual mode and Rs. 60,000 for other modes
    • Premium allocation charge: 5.50% to 6.00% for year 1 to 5
    • Policy admin charge: Rs. 35 or 40 per month based on premium payment mode
    • Annual free switches: 4
  • Max Life Fast Track Super
    • Entry age: 91 days to 60 years
    • Minimum premium: Rs. 25,000 to Rs. 1 lakh
    • Premium allocation charge: 4%
    • Policy admin charge: Rs. 500 per month
    • Annual free switches: 12
  • SBI Life Wealth Assure
    • Entry age: 8 to 60 years
    • Minimum premium: Rs. 50,000
    • Premium allocation charge: 3% of single premium
    • Policy admin charge: Rs. 45 per month
    • Annual free switches: 2
  • HDFC Life Pro Growth Plus
    • Entry age: 14 to 65 years
    • Minimum premium: Rs. 2500 to Rs. 1,00,000
    • Premium allocation charge: 6% of the annual premium
    • Policy admin charge: 0.42% to 0.83% per month
    • Annual free switches: Unlimited
  • Aegon Life iMaximize Insurance Plan
    • Entry age: 7 to 55 years
    • Minimum premium: Rs. 24,000 to Rs. 36,000
    • Premium allocation charge: Nil
    • Policy admin charge: Rs. 100 per month
    • Annual free switches: 4
  • ICICI Pru Wealth Builder 2
    • Entry age: 0 to 69 years
    • Minimum premium: Rs. 24,000 to Rs. 48,000
    • Premium allocation charge: 6 - 2%
    • Policy admin charge: 0.21% to 0.10% per month
    • Annual free switches: NA

Who should invest in ULIPs?

ULIPs are best suited for individuals who have long term financial goals and are willing to invest for a minimum period of 10 years. Investors whose financial goal is wealth building and want to create a retirement corpus, ULIP is one of the best investment plans for them. They can also benefit from a life cover, where the sum assured is paid to the nominee in case the policyholder dies during the term. Investors who look forward to tax-saving investment plans, it is important to note that ULIPs qualify for income tax deduction under Section 80C of the Income Tax Act, 1961.

It's never too late to become an investor. You may be doing well in your middle age before realising that life is moving quickly, requiring an action plan to deal with old age and retirement. Fear can take control if you are waiting too long to set your investment goals; however, that should go away once you set the investment plan into motion. Remember that all investments start with the first rupee, whatever your income, age or outlook. That said, those investing money for decades have the advantage, with growing wealth allowing them to achieve financial goals that others may not.