Source: IAC 2016
Investment refers to investing your hard earned money in a great and appropriate tool which would be able to offer the required financial assistance along with the great returns. It is true that no one is here who is not indulge in any kind of investment activity, but still a lot of people are unaware about different benefits that an effective investment strategy can offer to them. In India, if we talk about the population, then you must know that most of the population lies under the middle class section and this section invests more to secure their future and goals.
It is true that investment is not limited to a particular section, even the upper class section is highly indulge in the same and earning a lot on a daily basis. But, for the middle class section, it is not only the way of earning extra but it is also a great tool to stay protected. Middle class section of India refers to be the most educated and aspirational society. They try hard to have a financially secured life with a goal of wealth creation. This mentality helps a lot in the rapid growth of investment industry in India.
As the investment market is growing rapidly so does the different options to invest in and that confuse a normal man to get the right one. They are searching out for the right investment option to invest their money and for wealth creation in the future.
Best investment options for Middle Class
Unit Linked Insurance Plan:
Unit Linked Insurance Plan or ULIP is a popular form of investment that offers twin benefit of insurance and investment. It is a market linked investment product under which your fund is invested in different options such as stock markets, bonds and mutual funds along with the basic protection cover. ULIPs offer the benefits of making investment in one go and in installments as well. However, the returns depend completely upon market performance. It is a high risk investment option, only those who are able to bear high risk can invest in the same. However, some benefits of ULIP are listed below:
• You will get the chance to earn huge money.
• You have the freedom to choose single payment or you can make regular payments in form on instalments as well.
• Under the same, you are liable to withdraw funds anytime whenever you want.
• You will get the flexibility to switch between funds.
• You get Income Tax benefits.
Endowment Plan:
Endowment plan is a form of insurance cum investment plan. It guarantees substantial life insurance coverage. At the time of maturity, if the insured dies, then the beneficiary would be liable to get the lump sum assured amount. In case where the insured survives till maturity, he would be liable to receive entire sum assured plus bonuses (if any). A few of benefits are as follows:
• Offers complete life coverage.
• Low risk category.
• Maturity, terminal, reversionary and rider benefits are there.
• Tax benefits.
Child Plan:
Most of the people take it wrong that child insurance is not a best investment option, but this is completely wrong. Child insurance can act as a great investment tool if you use the same properly. Again, it is a combination of insurance and investment plan. It will help you in securing your child’s future and at the same time allows you to have wealth creation. In the Indian insurance market, there are two forms of child plans. One is Child ULIP under which your funds will be invested in stock markets that completely depends upon the performance of the market. The other one is the Child Endowment plan that invests your funds in debt instruments. The returns depend on the bonus payable at the time of maturity. A few of the benefits of child plans are as follows:
• Less Capital Erosion.
• Income Tax benefits.
• You can take advantage of different premium payment frequencies.
• Different riders are there to improve the value of the policy.
Now you must be aware of the different investment options that a middle class person can explore to get protection and to take advantage of wealth creation as well. There are many options that you can explore, but above stated are the top instruments of the insurance cum investment market. They not only provide the financial assistance but also help a lot in the wealth creation program. If you are looking for low risk investment option then you must go for Public provident fund (PPF) as it is completely risk free and offers guaranteed returns.
However, if you are able to afford a high risk investment policy then you can invest in Systematic Investment Plan (SIP). But before taking any financial decision, make sure that you know your own financial goal, risk appetite and personal circumstances in advance. If you are aware of your goals and desires then it will be easy for you to choose the perfect investment plan that can easily go well with your needs.
