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Investment Plans

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.

What is an Investment Plan?

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.

Types of Investment Plans

Unit Linked Insurance Plan

Unit Linked Insurance Plan (ULIP), is a combination of insurance and investment. In ULIP, a part of the premiums is deducted as insurance, and the other part of the premium is invested in market. Funds can be invested in bonds, equity, debts, market funds, or hybrid, depending on the investor. It offers transparency about the investment of your funds which you can evaluate and track as Net Asset Value (NAV). ULIP offers both coverage and investment options. As a Survival Benefit, you get the Maturity amount, depending on the prevailing prices of the units. As a Death Benefit, the nominee will receive the sum assured. Example: Investor pays premium of Rs. 30,000 for a policy tenure 30 years. The returns are indicative and related to the market.

InvestorPolicy Tenure Annual Premium Nominee Receives in 4% / 8% plan Assumed Returns @ 4% / 8% p.a.
Age: 30 years (M) 30 yearsRs. 30,000Rs. 4.94 Lakh/ Rs. 6.64 LakhRs. 13.6 Lakh / Rs.27.3 Lakh

Endowment Plan

Endowment plan is the traditional insurance product with an investment opportunity. It is a combination of coverage and investment. Funds are not linked to market. The premiums you pay throughout the period is divided into two parts:

  • Part of the premium is used as an investment
  • Another part of the premiums is kept as a risk cover On maturity, the returns are guaranteed with profit, although minimal. In case, if the investor dies before maturity, the nominee receives the sum assured.

Example: Investor pays premium of Rs. 30,000 for 12 years. The policy tenure is 17 years. The chosen sum assured is Rs. 5 Lakh. On maturity, policyholder will receive Rs.5.75 Lakh. If during policy tenure, investor passes away, nominee receives Rs.5.75 Lakh.

InvestorPolicy TenureAnnual Premium Nominee Receives On Maturity
Age: 30 years (M) 17 yearsRs. 30,000 for 12 yearsRs. 5.75 LakhRs. 5.75 Lakh

Money Back Plan

Money Back plan is a type of investment plan by life insurance companies that combines investment and insurance. It offers death risk coverage and returns as a percentage of sum assured at equal intervals. Pay premiums for a pre-decided number of years, and receive payouts every year after the premium payment period ends. The policyholder receives money periodically. On maturity, the rest of the sum assured is paid back. The survival benefit also comes with terminal bonuses. In case if the investor passes away during the term, the coverage is paid to the nominee. Example: Investor pays premium of Rs. 35,000 for 23 years. The policy tenure is 28 years. The sum assured chosen is Rs. 4 Lakh. On maturity, policyholder will receive Rs.5.75 Lakh. If during policy tenure, investor passes away, nominee receives Rs.5.75 Lakh.

InvestorPolicy Tenure Annual Premium Periodic Returns Nominee Receives in 4% / 8% plan Assumed Returns @ 4% / 8% p.a.
Age: 30 years (M) 28 yearsRs. 25,000Rs. 1.2 Lakh [on every 7th year (3 times during policy tenure)]Rs. 4.3 Lakh/ Rs. 5.5 LakhRs. 3 Lakh / Rs.5.85 Lakh

Benefits of Investment Plans

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 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.

Riders of Investment Plans

An investor of life insurance investment plan can opt riders. Ass the investment plans also combines death risk coverage, optional riders under such policy is available. Riders expand the policy coverage. In addition to the basic sum assured, rider benefits are also paid.

Accidental Death Riders: If the policyholder dies the accidental death, the insurance company will pay the sum assured plus the rider benefit to the nominee.

Accidental & Total Permanent Disability Rider: If the policyholder suffers total permanent disability due to the accident, the insurance company gives the rider benefit to the life insured.

Critical Illness Rider: On diagnosis of any major critical illnesses such as heart attack, cancer, stroke, kidney failure, paralysis, coma, the insurance company pays the rider benefit.

Waiver of Premium: In case of a vanilla term insurance, if the life insured suffers any disability because of which is unable to pay any future premiums, the policy terminates.

Accelerated Death Benefit Rider: On diagnosis with a terminal illness, such as Cancer, Leukemia. AIDS, Ebola, the insurance company pays a part of the sum assured in advance and the rest to the nominee.

Popular Investment Plans

Insurance CompanyProduct TypeProduct
HDFC LifeULIPHDFC Life Click2Invest ULIP
SBI LifeULIPSBI Life – eWealth Insurance
MAX LifeULIPMAX Life Fast Track Growth Fund
Bajaj AllianzULIPBajaj Allianz Future Gain
TATA AIGULIPTATA AIG Life Invest Assure Flexi Supreme
HDFC LifeEndowmentHDFC Life Sampoorn Samridhi Plus
LIC IndiaEndowmentLIC New Endowment Plan
Kotak Life InsuranceEndowmentKotak Premier Endowment Plan
AEGON LifeEndowmentAEGON Religare Premier Endowment Insurance
Bajaj AllianzEndowmentBajaj Allianz Save Assure – Endowment Policy
Bajaj AllianzMoney BackBajaj Allianz Cash Assure
LIC IndiaMoney BackLIC New Money Back Plan – 20 years
HDFC LifeMoney Back HDFC Life Super Income Plan
SBI LifeMoney Back SBI Life Smart Money Back Gold
Birla Sun Life Insurance Money BackBSLI Bachat Money Back Plan
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