If you’re looking for a financially secure future, making monetary investments is hands down the best way to get started. While financial management is a lot more than just an investment in an asset, it is an integral part of your life that needs to be taken care of.
Additionally, you may also want to make sure that your loved ones continue to live a financially independent lifestyle in the event of your unfortunate demise. Fortunately, there are several ways in which you can ensure safety against the risk of death and financial security for yourself.
This article discusses some of the best hacks available to make your investments successful in providing you with adequate life and financial cover. You’ll also get a list of the best ULIP plans available in the market for the time being.
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Assess Your Risk Tolerance
As you dive into the investment horizon, you will soon realize that the amount of risk you can take is crucial to assess for successful investments. A person with high-risk tolerance is capable of managing a highly volatile portfolio for higher returns.
On the other hand, a person with a low-risk tolerance should consider investing in stable instruments instead. Several investors fail just because they ignore the risk tolerance factor in their investments. If you invest oppositely to your risk tolerance, you may end up making wrong decisions.
Make sure you consider your risk tolerance and try to prepare an asset allocation around it. When your investment starts showing returns, ensure that you rebalance your portfolio at least once every year and make sure it is relevant to your present financial risk tolerance.
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Start While You’re Wrong
If you’re among the lucky young people who are currently reading this article, it’s a great chance for you to start investing and accumulate wealth over time. Although it’s not a get-rich-quick scheme, your funds will grow to a considerable amount with time.
In case you’re currently in your 20s, you have 40 years before your retirement to build enormous wealth. The power of compounding will allow you to enjoy a greater growth potential as you continue investing for a long-time horizon.
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Always Research About the Incurring Costs
Regardless of whatever investment source or strategy, you decide to proceed with, keep in mind that there will always be some sort of a fee associated with it. Make sure you inquire with the investment service provider about all the incurring costs for the investments.
You’ll always find alternatives to high-fee services as there is a multitude of options available at your disposal. Try avoiding investment instruments with high fees as they may hinder the growth potential of your investments.
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Try Setting Automated Investment Plans
The most difficult part of any investment is being able to stick with it. No matter whatever plan you purchase, if you cannot be regular with your investments for a long-time horizon, you won’t be able to see any considerable returns because nobody gets rich overnight (Repeat after us!).
While the majority of you may blame time obligations for not being able to manually transfer funds for your investments, some may just be insecure about it. The simplest solution to evade this is to set up automatic investment plans that save you time and keep track of your investments.
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Never Forget to Diversify
It is said that you should never put all your eggs in one basket. One of your investments might be performing well and you may also feel good about it, but it’s never a wise decision to go all-in on a particular investment avenue.
In case the investment fails to perform well later, you may even get in a bad financial position. Therefore, make sure that you keep your portfolio diversified and invest in multiple assets instead of relying upon just one of them.
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Find Tax-Saving Opportunities
There are several investment options available in India that allow you to save money on taxes through deductions and benefits. Even your workplace offers you a provident fund, which offers certain tax benefits as per the Income Tax Act of India.
As you pay less taxes each year through these investment plans, you can build a larger portfolio. In addition to Provident Fund, you can also choose to invest in some of the best ULIP plans that provide you with tax benefits and deductions on multiple occurrences.
There are certain sections of the Income Tax Act of India, 1961, that allow you to save taxes through your investment policies. For instance, section 80C offers tax deductions of up to Rs. 1.5 lakhs for the premiums paid for a life insurance policy.
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Get a ULIP Policy
For those who don’t know what is ULIP, a Unit-Linked Insurance Plan, abbreviated as ULIP, is a financial investment product that provides the combined benefits of investment and insurance in a single plan at convenient costs.
This means you not only get coverage against the risk of death but also enjoy capital appreciation by investing a part of your premium payments in market-linked assets like bonds and equity. In the event of your unfortunate death, a ULIP plan pays a death benefit to your nominees.
There are several best ULIP plans available in the market that allow you to choose from several fund options and help you enjoy a personalized investment experience. The reason why investing in ULIP is a genius move is because it helps you get the best of both worlds with a single plan.
Best ULIP Plans in India
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LIC New Endowment Plus
The LIC New Endowment Plus is a non-participating regular premium unit linked insurance policy that provides combined benefits of insurance coverage and investments in market-related instruments. The plan allows you to choose your desired investment fund and features tax benefits.
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Canara HSBC Oriental Bank Of Commerce – Invest 4G Plan
The Invest 4G Plan by Canara HSBC Oriental Bank Of Commerce is a unit linked insurance plan that can be customised as per your life goals. The plan offers three different colour options and allows you to choose from multiple premium payment terms that makes investment in this plan highly feasible.
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HDFC Life ProGrowth Plus Plan
The ProGrowth Plus plan by HDFC Life is a regular premium unit linked insurance plan that offers great flexibility in terms of premium payments and investment funds. The plan also supports a partial withdrawal feature to help you enjoy liquidity during unforeseen circumstances.
Final Words
To ensure your financial security, it is important to protect yourself from the risks that are inherent in today’s society by diversifying your investments. A good place to start is with the best ULIP plan that will allow you to enjoy both life cover and investment benefits with just a single plan. This article has provided you with some useful tips on how to ensure safety and financial security for yourself. We hope these tips have been helpful!
