Investment Planning

At various life stages, one need funds. An individual need to build the corpus. Whether the need is for child’s education, marriage or retirement savings. When one starts looking up for various ways to build funds, one tends to look investment plans where your money grows while you sit back. Because of the number of investment avenues, there is no simple solution to it. However, the simplicity of investment plans offered by the most life insurance companies is one of finest options available.

Investment plan is the simplest ways to build wealth over the time. Life insurance companies offer various investment plan options. These are the wealth creation products for the future when you will require it. It requires planning and understanding of different options available.

Benefits of Investment Planning

  • Wealth Creation – Investment plans with life insurance are sure shot way to accumulate wealth over a period. As an investor one can choose suits the best depending on the risk, returns and disposal amount to buy a plan. In future, when you would require funds for child’s education, child’s marriage, retirement, pension, etc. life insurance investment plans will financially aid you.

  • Financial Protection – Life insurance policy provides life coverage with investment options, which takes care of the family financially as both Survival and Death Benefits are provided. At maturity, policyholder receives the returns with profit in the pocket. This way one can provide long-term financial security to the family. In case of an unfortunate eventuality, policyholder dies before maturity period, the insurance company will pay the nominee the sum assured. In this way, it provides financial protection to the family of the policyholder.

  • Death Risk Coverage – Not all investment avenues offer death risk coverage options. However, investment plans by life insurance do. These plans include death risk coverage. This way, your family’s financial needs are taken care even in your absence. The sum assured is paid to the nominee in the event of the death of the policyholder.

  • Retirement Savings – One can buy these investment plans at any given time of life stage. That said, this allows you create the corpus for the retirement. One can buy and build funds that can be used at the later stage of life. In this way, even after retirement the investor will financially independent.

  • Flexibility – Flexibility of money to be invested and the duration. One can opt as feasible, depending on the needs and planning.

  • Save Taxes – Investment plans are not only risk cover or wealth accumulation plans, but these plans also help in tax savings. As per section 80C and 10(10D) of Indian Tax Act, premiums and payout are exempted from tax. A perfect combination of savings, wealth creation, financial protection with tax benefits.

  • Loan Facilitator – Life insurance investment plans also act as a loan facilitator. But, it depends on the coverage one has taken, premiums paid, eligibility for the loan amount, etc.

Things to Check Before Investment Planning

1. Dependents – This is one of the most important factors to consider before investment planning. Determine the number of dependents who you intend to cover under a plan – spouse, children, parents, in-laws, etc.

2. Financial Goal – Financial goals will help you determine the amount of investment required to achieve the same. Determine if you have long or short term goals. Short term goals can be like purchasing a new car while long term goals include children’s higher education, marriage.

3. Current and Future Liabilities – This will help you determine the amount of investment which has to be dedicated towards the investment plan without compromising on your current lifestyle and standard of living.

4. Insurance Cover – Ensure that you purchase a comprehensive insurance plan which comes with a high sum assured. The high sum assured will ensure that all financial goals are taken care off with or without you.

5. Debts – Ensure that you calculate the investment amount post deduction of any loans/EMIs. It is advisable to analyse your ability to take on further debts, and invest in them only when you are sure of your ability to repay them within their due dates.

6. Alternate Income – Opt for a life cover that will financially support you and your family, in case of life-threatening unforeseen incidents and accidents (total or partial disability or even death due to an accident).

7. Additional Income – Always divide your investment sum into different policies. One part of the sum should be invested in life insurance plans while the reminder half into pure investment plans.

8. Premium Amount – The premium amount is the sum which you are required to pay towards the insurance plan. You can determine the suitable premium with the help of a premium calculator. Online premium calculators are available on the websites of investment companies to offer investors the convenience of getting free premium quotes.


Investment planning is not just a convenient way to accumulate desired wealth but are also a comprehensive instrument to blend the flexibility of investments with coverage. ULIPs (Unit-Linked Insurance Plans) are among some of the most accessed plan types which divide a portion of the premium paid for sum insured and the other to invest in the market. Many such plans are available in the market; some are monthly and some are annual; for example HDFC monthly investment plan and such. Choose your plan type and investment wisely depending on the returns, the coverage etc. i.e., after assessing the parameters mentioned above

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