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Investment Options to Opt for Before 35

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Investment Options to Opt for Before 35
November 25, 2023

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In this policy, the investment risks in the investment portfolio is borne by the policyholder

Making decisions about investment is challenging for the best of us. There are several investment vehicles on the market, and instruments range from the fixed type to those in which you may be taking some risks, like mutual funds. With so many variations and permutations, what should you choose? If you are young, below 35 years of age, this is the best time to invest. Investing young gives you foresight into the future and helps you to plan your finances better. Furthermore, investing at a young age makes you more eligible for a lot of plans and you have a wider array to make your selection. Choosing your plan, one that matches your individual requirements, becomes easy with online applications and easy ways to access information.

Life Insurance Options

While people may not want to buy life insurance plans due to perceived high premiums, today, life insurance plans can be cleverly combined with investment. If you are young, there is no better way to go about buying insurance and investing than all in one policy.

Several individuals, who do make choices about insurance, may not be educated about the plans that offer dual benefits of insurance and investment. However, millennial nowadays know the importance of investing early, and building a large corpus for the future.

With life insurance thrown in, you get advantages to earn returns while you have a long employment career ahead, and assure financial protection for your family should any unforeseen circumstance take place. In this way, you have three great schemes in front of you - a ULIP, an endowment plan, or a term insurance plan. Each has its own features and you can choose the one that suits you best after reading about them.

Unit Linked Insurance Plan (ULIPs)

One of the best plans today, blending insurance and investment is a ULIP. Unit Linked Insurance Plans (ULIPs) are perfect as they are financial plans for life insurance needs and investment as well. The highlight of a ULIP is triple-fold. In its clear perks, you get to create wealth, have insurance and save tax as well. You are free to select whatever funds you would like your capital to be allocated to in a ULIP. You can decide this according to your time horizon and appetite for taking risks. As a result, ULIPs give you tailor-made schemes which are unique in life insurance policies.

Since ULIPs invest your capital in the markets, either in debt funds, equities or both, your returns from a ULIP may be substantial, but these are not guaranteed returns. It all depends on how securities in a fund fare in the markets. Nonetheless, ULIPs can be a great benefit for life insurance cover as they offer you the flexibility of switching funds. It is also possible for you to tweak your original investment, making changes if you have more wealth to invest, without any bother. Furthermore, you get a tax benefit on a ULIP in case of the sum assured (with no tax to be paid) in the event of the demise of the holder of the policy##.

Term Plans

Among the most simple to understand life insurance policies is term insurance. Once you know what a basic term plan offers, you may feel that this meets your requirements. However, choosing a plan should entail a thorough evaluation of features of the plan.

A term plan offers a particular tenure of coverage during the term of the policy, and if the holder of the policy has an unfortunate demise, an assured sum is paid to the nominee. The payout may be opted for as a lump sum, or as monthly periodic payouts.

Term insurance gives you a maximum amount of coverage with a very minimal premium amount. In case you are just starting out in your career, this is a good plan to opt for. Since a term plan is basic in terms of life insurance coverage, it does not demand exorbitant premiums.

Term insurance plans are not investment plans, just basic life insurance plans. The benefit is the financial safeguard offered to your loved ones in the event of your unforeseen demise. Nonetheless, certain life insurance schemes are evolving, and you may find maturity benefits in term plans too. Additionally, term plans give you superb tax benefits under Section 80C of the Indian Income Tax Act (1961)*.

You can get tax deductions that go up to Rs. 1.5 lakh on the premium paid. Tax benefits are also given on the death benefit in these plans. You should find out more details from your insurer.

Endowment Plans

Among the most popular life insurance products, endowment plans provide combined advantages of investment and life coverage. You may just think that this is a good investment if you wish to generate wealth while getting insurance coverage.

Endowment plans offer you the opportunity, not just for life coverage, but also for saving a corpus for any financial requirements like your retirement, buying a home, a child’s further education, marriage, etc. You can meet the costs of major financial milestones with this plan. In the event of the unfortunate demise of the holder of the policy, a nominee receives a sum assured by the coverage. In the event the holder of the policy survives the policy’s term, the maturity amount is paid. Additionally, any applicable bonus due is paid out too.

Apart from this, features include tax advantages that you are eligible for under Section 80C and 10D of the Indian Income Tax Act (1961)#, with tax deductions on premiums you pay as well as on maturity benefits.

Related Article

ARN – ED/09/22/29666

Term Plan Articles Term Plan Articles

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Life Insurance Articles Life Insurance Articles

Tax Articles Tax Articles

Retirement Articles Retirement Articles

ULIP Articles ULIP Articles

Health Plans Articles Health Plans Articles

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Author Profile Written By:
Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER

We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

Disclaimer

# Subject to conditions specified u/s 10(10D) of the Income tax Act, 1961.

* Subject to conditions specified u/s 80C of the Income tax Act, 1961.

## The afore stated views are based on the current Income-tax law. Also, the customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.

The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year.

For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale. Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company; name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. 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.

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