We all want to invest in plans that ensure that we have a cushion to fall back during financial emergencies. Should we go for savings plans which are offer returns on premiums paid or should we invest in Unit Linked Insurance Plans (ULIPs)? These are insurance plans which provide the benefit of savings or investment. Several insurers offer savings plans that help you create the desired corpus. Here are a few tips for choosing the best ones.
1. Risk Appetite
A young investor will have the risk taking appetite to invest more than an older investor. So, it’s best to start young and probably choose a market linked savings plan. These are Unit Linked Insurance Plan or (ULIPs). They are insurance policies where a certain portion of your premium goes for your life cover and the remaining is assigned to a common pool of money, a fund, which is invested in equity, debt or both. The returns depend on the pool you choose. Thus, it’s prudent to know your risk appetite first and then choose a fund accordingly.
Another important aspect to consider while choosing a savings plan to invest in is the goal of the investor. Is the investor looking for a long-term investment or a short-one? An answer to this question will help decide the appropriate plan which can beat inflation and provide good returns.
An investor’s investment capability depends on his/her responsibilities too. Does he/she have a family dependent on them? Are they in debt? Such questions need to be answered before picking a savings plan because uneven investments can affect the rate of returns from plans.
4. Features of the plan
All savings plans have different characteristics according to the firm which offers them. Some offer loan facilities, some allow withdrawals during the tenure of the plan, and some offer bonuses too. It’s necessary to compare them and check which one suits your needs.
5. Surrender policy:
While most will ensure that they don’t surrender their plans and investments, however, there are times when one is forced to surrender their savings plans. Inspect whether there are charges for surrendering a policy.
6. Compare online:
There are quite a lot of savings plans to choose from. To make our life easier, there are many websites which aggregate the data on all these plans and helps us to compare them. Check for returns, user comments, prices, and other info so that an informed decision can be made when investing in a savings plan.
Investing in savings plans helps us to complete our financial goals. Great care should be taken when choosing a plan to invest in. Aegon Life is one such place which offers great savings plans. From the risk taker to the conservative, their plans have something for every appetite.