Wealth Creation Insurance Plan

Wealth Creation Insurance Plan:

Wealth is the sufficiency of valuable resources or valuable material possessions. This includes the core meaning as held in the originating old English word weal, which is from an Indo-European word stem.

Wealth can be measured by the valuation of all assets after deduction of the loans. Every person want to create his/her own wealth, and every one choose his/her plan per his/her appetite and suggestions. For example, someone suggested that he is investing in XYZ, you too invest in that, and mostly people go to the recommendations without knowing the exact features and benefits or the impact of their investment in future.

In Insurance, insurer offer various plans to create your wealth, along with the following benefits;

  1. Double Tax Savings – Under Section 80C and under section 10(10D), you can enjoy the benefits of double tax savings, at the time of investment you got Tax Exemption and at the time of returns you will got the TaxFree returns. This benefit not in Fixed Deposits, Real Estate, Gold, Share Market or Equity, and even in Mutual Funds as per recent amendment.
  2. Risk Coverage – In insurance plan, you see your increasing wealth along with the Risk Coverage of your own Life, but again in other investment tools you will not got the Risk Coverage at all, your Guaranteed Risk Coverage (Sum-Assured) will be 1.10 times to 19 times per your chosen plan. On the other hand, in Fixed Deposits, Real Estate, Gold, Share Market or Equity, Mutual Funds you will got the same amount with interest on that in case of death.
  3. Certainty – In current market scenario there is no certainty in Real Estate, Gold or in Fixed Deposits, as after the Demonetization all these sectors had consistently in trouble. Do you think these sectors are playing good role in wealth creation now?
  4. Consistency – In insurance sector, there is consistency and will never go down as its evergreen need of the people, if you go through the trends, you will find that the graph is going up day by day and will never go down as insurance is the basic need of every person, there is no awareness in people about the need of insurance but as current scenario people going to realize the need of insurance and taking it.

 

In Insurance Industry, there are two types of wealth creation plans;

  1. ULIP (Unit Linked Insurance Plan) – The most preferable and high growth plan is ULIP to create your wealth. If you are taking ULIP in early age and for long term, there is unbelievable growth, no investment tool can beat the returns of ULIP. ULIP is for people of every age group and returns depends upon the Fund chosen by the insured. Except it, you will be covered for 1.10 times to 10 times as Sum-Assured of your annualized premium (investment). In case of death, your family will got the Fund Value or Sum Assured whichever will be higher at that point of time. There are free switches between various fund to secure and maximize your returns and there is no entry or exit loading charges at all, there will be guaranteed wealth boosters and guaranteed loyalty additions and many more which you can’t have in Share market or in Mutual Funds.
  2. Traditional Participation Plans – Traditional Participating Plans are the plans where bonus included and your money will be invested in Govt Securities, there will no investment in Equity at all. There is Great and Guaranteed Returns but not as per the ULIP, but returns will be higher then the other secured investments like Bank FDs, NSC, KVP and other Traditional investment tools. There you will enjoy Life Cover upto 19 times of your annualized premium (investment). In case of death your family will got the Guaranteed Sum Assured along with the accrued bonuses, which is already much higher then the premiums you paid. Traditional Participation Plans are best who want to stay away from the up and downs of the Market and want steady returns.

In both types of plans you will enjoy the double tax benefits as per the rules of Income Tax under section 80C and 10(10D).

Amit Saxena

Financial & Insurance Consultant
MaxLife Insurance Co Ltd & MaxBupa Health Insurance

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