Investment Plan

Tax Saving Investments

Looking for tax savings investment plans to meet your long-term and short-term financial goals? Understand various investment instruments and saving schemes in India, and then choose the best plan at PolicyBazaar. 

best tax saving investment plans in india

Best Tax Saving Investment Plans in India 

 

Plan Name

Plan Type

Entry Age

Maximum Maturity Age

SBI Life Smart Wealth Builder Plan

Unit Linked Insurance Plan

7 - 60/65 Years

70 years

HDFC Life Pension Super plus Plan

Unit Linked Pension Plan

35 – 65 years

75 years

Future Generali Select Insurance Plan

Unit Linked Insurance Plan

7 – 60 Years

70 years

MetLife Money Back Plan

Money Back Plan

13 – 55 years

65 years

Birla Sun Life Insurance Bachat Endowment Plan

Non-participating Endowment Plan

30 days – 60 years

80 years

Max Life Platinum Wealth Plan

Unit Linked Insurance Plan

18 – 55/60 years

65/70 years

ICICI Pru Subh retirement Plan

Unit Linked Pension Plan

35  – 70 years

80 years

Kotak Classic endowment Plan

Participating Endowment Plan

0 – 60 years

75 years

Aegon Life Rising Start Plan

Unit Linked Child Insurance Plan

1 day – 15 years(for child);
18 – 60 years (for proposer)

75 Years

HDFC Life Pro Growth Plus Plan

Unit Linked Insurance Plan

14 - 65 years (Life Option),
18 - 55 years (Extra Life Option)

75 years (Life Option),
 70 Years (Extra Life Option)

 

There are several types of life insurance policies available in the market. Broadly, there are three categories. Some offer pure protection (insurance), others offer protection as well as investment while some only have investment as their objective. In India, however, life insurance has been used more for investment purposes in one’s overall financial planning. 

The tax savings investment plans help build a large corpus and also beat inflation. We at PolicyBazaar help you compare investment plans offered by all major life insurance companies in India and assist in selecting a plan most suited for you. Though each plan is unique, certain important factors must be kept in mind while selecting a savings investment plan: 

  • Risk Profile: It is important to determine one’s risk appetite to find the best saving plan. Age and personal factors are important determinants of the kind of risk one can take. Generally, young people in their 20s and early 30s can opt for the higher risk but lucrative return options. They can choose investment plans which are more aggressive – those which invest one’s money more in the equity segment of the stock market and lesser in debt. A Unit Linked Insurance Plan (ULIP) is more suited for young customers who are willing and able to take such financial risks. On the other hand, a traditional endowment or a money-back plan is better suited for the needs of a conservative investor, who prefers to have the guarantee of the money being secure even though it generates lower returns.  

  • Investment Tenure: Insurance plans offer a mid-to-long term investment horizon and serve as one of tax saving investment options. The ULIPs are very good as they help build up a significant corpus over the life of the policy. The insured party can start with a small premium amount and build it up over the policy tenure. This is possible as most insurance companies understand the fluctuating nature of earnings and savings depending on the age of the investor and provide options where the premium and the investment amount can be increased or decreased as per the person’s convenience.  

  • Final Goals: One should be clear about the reason for selecting a savings investment plan. The final objectives help in determining the tax saving investment options. Goals range from building a corpus for retirement or having sufficient money for child's higher education or marriage to building a house.

  • Plan Features: Different plans have different features. The best tax saving investment plans allows one to make partial withdrawals by surrendering a certain portion of the policy while retaining other benefits. Some of investment options have a fixed cover ranging from 5/10 years to 30/35 years depending on what one wants. Others provide cover for entire life. With comprehensive cover and flexible options, one can enjoy protection as well as growth through savings. Some plans also offer bonuses, the amount of which is decided by the insurance companies based on the performance of their investments in the market.  

  • Flexibility of the Plan: For long term goals, this plan allows one to take care of unexpected short term needs. They offer the flexibility of surrendering the policy if the situation so demands. However, it is better to stick with the tax saving plan for the longer term so that they give better returns.

  • Charges of the Best Investment Options: Understanding the costs and charges involved is vital when selecting a saving plan in India. These best savings plans have minimum charges and provide flexibility in terms of cash withdrawal, bonus receipt and term of the policy. Also, the long-term effect of these charges ismuch less and makes a tax saving investment plan a great way to increase wealth at low cost.

best investment plan

Compare the Tax Saving Investment Plans in India

Lot of tax saving investment plans in India serve as saving schemes in India or act as tax saving investment. You can do well to compare from among these best investment plans in India and get the savings investment plans that you need to use as your personalised money saving plan. You can use an investment calculator India to calculate your priorities such as making a tax saving investment along with putting your money in one of the better saving schemes in India. 

best investment option in insurance

Best Investment Options in Insurance 

Tax Saving Investment Options: Endowment Plans

Endowment plans are regular saving plans which help build a corpus and give guaranteed maturity benefits along with bonuses. The product is a best saving plan in India as they give returns that are equivalent to a fixed yield or deposit. In addition, they also combine insurance risk cover with add-on riders to primarily build a safety cushion in case something goes wrong. They are clearly among the best investment options available to people looking for an insurance cover as well as investment and saving schemes in India. 

An endowment policy covers risk for a specified period at the end of which the insured receives the sum assured plus all accrued bonuses. They are considerably highly expensive (considering the annual premium payment) as compared to a term or whole life plan. If the policyholder dies during the policy term, then a payout of the sum insured along with bonus is issued immediately to the beneficiary.  

  • There are two types of endowment plans, with each having its own advantages.

    • Without­Profit Endowment Plans: Without­profit endowment plans have no participation in the annual profits of the insurance company. Despite the sum assured,one can possibly get the loyalty bonus as a single payout made if you stick to the insurer. These are the best investment options for investors looking for a low premium saving plan that offers safer returns.

    • With­Profit Endowment Plans: These plans share profits an insurance company makes each year with the policyholder. They offer more returns than without­profit endowment plans. However, they are expensive as their premium is higher than without­profit endowment plans. These policies are investment options for people who are looking for increased but safer returns.

    Assured returns insurance plan, also called guaranteed additions in insurance parlance, is when one knows the return or profit at the beginning. If the assurance of return is non-guaranteed, it is called a bonus. 

  • The endowment plans have two types of bonuses, making them one of the best tax saving investment options

    • Reversionary Bonus: Also called a regular bonus, this is an annual bonus which depends on the performance of the insurer and is added to the fund every year, payable at the end of policy period of these best investment options. Most insurance companies ensure that they accrue regularly and serve for the investors looking for safer returns.

    • Terminal Bonus: A terminal bonus is an additional loyalty bonus offered by the insurer at the end of the policy term. These sums increase depending on the term of the plan and the insurance amount. The terminal bonus swings the vote in favour of endowment plans as investment options for the conservative investor.

    Endowment plans are best suited for someone who is looking for additional benefits along with a life cover. They are among the best investment options and offer multiple insurance plans to meet double endowment policy, education endowment policy, marriage endowment policy an individual’s distinctive needs, viz. education endowment policy,full endowment,double endowment policy, unit linked endowment, marriage endowment policy, and low cost endowment.  

  • Benefits of Endowment Plans

    • Endowment plans provide dual benefit of investment and insurance making them one of the best investment plans in India

    • They offer long term investment and allow one to receive a lump sum amount after some years or at the time of maturity, making them one of the tax savings investment.

    • They are ideal if one wants to pay premium for a short period and wants to enjoy benefits from the plan over the policy term

    • Endowment plans are a good tax savings option as they are tax free. Section 80C of the Income Tax Act allows tax benefit on the annual premium and section 10(10D) makes maturity claims completely tax-free.

    • Policyholders also have the option to add accidental riders to further enhance the cover by paying a marginal premium. People can use an investment calculator in India to find the benefits

    • Endowment policies are amongst the best investment options as they are liquid in nature

    • If for some reason, one ceases to pay premium after a set minimum number of years, then a free paid-up policy may be secured with reduced sum assured, subject to certain conditions

    • In case the policyholder survives the policy term, sum assured amount and additional bonuses accumulated during the term are also paid further highlighting the benefits of endowment plans

    • In case the policyholder dies during the policy term, the death benefits are paid to the nominees which include full sum assured amount and additional vested bonus 

 

best Money back plan

Tax Saving Investment Options: Money Back Plans

Money back life insurance policies are popular as they offer dual benefit of insurance and redemption of money at regular intervals. A best saving plan is a type of endowment plan which gives periodic cash payouts to investors over the policy term. As they help build regular large capsules of funds, they are useful for the salaried class who wish to save money to buy large assets every 3-5 years. These plans are meant for individuals who require money at certain intervals in their lifetime to meet fixed short-term and long-term financial requirements such as buying a car or house. 

A portion of the sum assured is paid out at regular intervals in a money back policy. If the policyholder survives the term, he gets the balance sum assured in the best saving plan. In case of death over the policy term, the beneficiary gets the full sum assured irrespective of the payouts already made. The bonus is also calculated on the full sum assured and not the balance money left. Because of these two reasons, premiums on money back plans are higher than endowment plans. 

  • Benefits of Money Back Plans That Make Them tax saving investment Options

    • Protected Savings: The savings in this plan remains safe as the premiums paid are not linked to the capital markets which offer uncertain returns. The returns in such money saving plans are guaranteed.  

    • Liquidity: A money saving plan like a money back plan is a great way to meet intermittent liquidity requirements at important stages in life. Since the payout intervals are fixed, a money saving plan helps in the careful planning of crucial requirements at important milestones in life.  

    • Life Insurance: Finally, a money saving plan offers life insurance cover. In the eventuality of the insured person passing away, their legal nominees get the full sum assured amount.  

 

Best ULIPs Plan

Best Tax Saving Investment Option: Unit Linked Insurance Plans (ULIPs)

A ULIP is a type of life insurance product, which combines the safety of insurance protection with wealth creation opportunities. A part of the investment goes towards providing life cover and the residual portion is invested in a fund which invests in stocks or bonds. ULIPs are the easiest and best investment plans in India for a person to enter the stock market with an added advantage of life cover. As these products provide tax benefits and market linked returns, they are one of the investment options for the long-term.

ULIPs offer many investment funds to choose from which allow the flexibility to shift between equity and debt, based on the market conditions and one’s risk profile. ULIPs are structured in such a way that the protection and the savings elements are easily distinguishable, and hence, can be managed according to one’s specific needs. This way, ULIPs offer unprecedented flexibility and transparency.

Types of ULIPs That Serve as Good Investment Options

One of the biggest advantages of a ULIP is that it serves a variety of financial objectives and acts as a best saving plan for all investors. There are different ULIPs for just about everyone. Depending on one’s life-stage and corresponding goals, there is sure to be a ULIP that can help provide the best investment options for the individual.  

  • Why ULIPs for Retirement Planning are Best Investment Options

    Retirement is the end of active employment and therefore, regular income. With disciplined savings in a pension plan, one is able to amass enough funds to provide a steady income post-retirement. Plus the fact that they are a tax saving investment is an added plus. 

    One can either make a lump sum payment or regular yearly contribution during earning years in the tax savings pension plan. The money in a best saving plan is then invested in funds of one’s choice. In retirement plans, the earlier one begins the greater one gains post-retirement because of the power of compounding.

    One can choose to receive annuity any time after the vesting age (the age at which one becomes eligible for pension decided at the beginning) in a best saving plan. Most unit-linked tax saving investment pension plans come with a wide range of annuity options which let one structure post-retirement benefits payouts.

  • Why ULIPs for Long-term Wealth Creation are Best Investment Options

    ULIPs are a good option if one is looking for long term wealth creation along with an insurance cover. Young people in their 20s and early 30s invest in such plans as it allows them to use the funds for long-term financial goals like purchasing a house, paying for their child's higher education, etc.

    Best investment options such as ULIPs for wealth creation can be classified as:  

    • Single Premium – Regular Premium Plans: Depending on one’s needs and premium paying capacity, one can either go in for a plan where one has to pay a lump sum premium once during the policy tenure, also known as single premium plans. Or go in for regular premium plans from a best saving plan where one has to pay periodic premium where the frequency is determined as per one’s convenience. This makes these plans one of the best investment options. Use an investment calculator in India to find what you need.  

    • Guarantee Plans – Non-Guarantee Plan: Some wealth creation ULIPs offer guaranteed benefit and are thus one of best investment options. These are ideal for people who want to enjoy potentially higher returns without taking any market risk. Non-guarantee plans come with a choice of fund options ranging from aggressive funds (invest in equities with the objective of capital appreciation) to conservative funds (invest in cash, money market instruments and / or bank deposits with the aim of capital preservation). These let the policyholder decide where to invest their money as per their investment preferences and saving plan needs, including the time frame they are looking to get returns.  

    • Life Stage Based – Non-Life Stage Based: As the name suggests, life stage based ULIPs take into account one’s priorities at different stages in life and accordingly distribute the money across equity and debt. It ensures that the asset allocation is in sync with one’s age and changing financial needs, making them one of the best investment options. On the other hand, non-life stage based do not take into account the age when investing money.

       

  • Why ULIPs for Child’s Education are Best Investment Options

    Child Plans are saving instruments which help parents build a protected asset for their child's future. They also provide many insurance features which protect the intent or reason for corpus building; primarily for child's future education and expenses. 

    Education today is more important than ever and the good education is expensive. The main responsibility of parents is to ensure that their child gets the best education possible. ULIPs designed especially for children’s education ensure that sufficient money is available at key milestones ensuring that the child's education is not hampered even if something unfortunate happens to the parent (policyholder). Child education plans are the best investment options safeguard the child against the financial ramifications of the death of a parent. 

    ULIP Child plans also offer the following features that make them one of the best tax saving investment plans:

    • Flexibility of including riders, such as income benefit rider, disability rider and more for extra benefits. These ensure that the child will get a fixed amount of money annually to meet his/her educational expenses, making them one of the best investment options.  
    • In case of death of a parent, the child will not only immediately receive the sum assured but will also continue to receive money at the key educational milestones. This makes them one of the best investment plans in India for children 
  • Why ULIPs for Health Solutionsare Tax Saving Investment Options

    Healthcare costs are increasing at an alarming rate. Illnesses sometimes force families to borrow and sell assets to meet expenses turning medical emergencies into financial emergencies. This is why the insurance industry has come up with a novel innovation recently called the Health ULIP. Health ULIP is the best savings plan, designed for investing a portion of the premium to building a health fund to meet the future health-related expenses by investing in a long-term flexible savings plan with multiple fund options. A health fund allows one to claim health related expenses and also fund future health insurance charges. It has the benefit of tax exemption on premium paid under section 80D of the Income Tax Act.

  • Advantages of Unit Linked Plans

    • Market Linked Returns: Unit linked plans offer the opportunity to earn market-linked returns as part of the premiums is invested in market linked funds which invest in different market instruments - debt and equity in varying proportions depending on one’s risk appetite. If the market does well, one can earn good returns. This makes ULIPs amongst the best investment plans in India. Use an investment calculator India to check which of the tax saving investment options make sense for you.  

    • Life Protection, Investment and Savings: Unit linked plans offer the twin benefit of life insurance and savings at market-linked returns, making them one of the best investment options. ULIPs offer protection and also give the opportunity to invest money to earn high returns. It helps one instil the habit of saving and investing, important for building wealth over a period of time.

    • Flexibility: They offer significant scope for flexibility with options like:

      • Switching between investment funds with different risks as per changing needs

      • Facility to withdraw partially from one’s fund (this is subject to certain charges and conditions)

      • Single premium additions enabling the policyholder to invest additional sums of money over and above the regular premium, subject to certain conditions  

 

best tax saving investment

Best Tax Saving Investment

Best investment plans in India also make for good tax savings instruments. In life insurance, the premium amount payable is deductible from taxable income up to a maximum amount of Rs. 1 lakh under section 80C. Maturity proceeds and death benefits are also tax exempted under section 10(10D) making them one of the ideal tax saving investments. 

  • Other Investment Options to Choose From

    • Mutual Funds: This is a professionally managed trust in which investment is pooled from retail investors. The accumulated amount is invested in different financial instruments like shares, securities, etc. As the income is earned on these instruments, it is shared proportionally among investors. A mutual fund is considered one of the best investment options due to its very low charge structure.  
    • Investments in Gold: The value of gold has been appreciating steadily. Looking at the last few years, there has been more than 22% annualized returns; this makes gold a very good investment option. For those who are interested in goldcommodities investment, including Gold ETF, e-gold, and physical gold.  
    • Bank Fixed Deposits, PPF, and Postal Schemes:These are 3 are convenient options for safe investments. The interest rate on PPF account is presently at 8.8% per annum and keeps changing every year; different banks offer different interest rates. There are also many postal investment schemes which can be bought. Unlike insurance, other investment products are not aimed to provide a financial cushion to family in case of unforeseen circumstances, thus, we recommend our consumers to prefer insurance over other financial instruments. 

 

things to remember while investing in insurance

Important Things to Remember While Investing in a Saving Plan Policy

Set Financial Goals: Setting financial goals - both short term and long term, brings a lot of clarity. It helps lay down in black and white what one wants to achieve and, in turn, helps in deciding what kind of insurance plan to buy. Goal setting may appear tedious, but once one goes through the process, one is able to make use of the best investment plans in India. Divide financial goals in terms of time frame and overall objectives. One can set goals for 1 year, 3 years, 5 years, 10 years, and so on. Broad objectives of a best saving plan may include purchasing a house, saving enough money for child’s higher education and marriage and planning well for retirement. 

 

Maintain Balance Between Risk And Returns in These Best Investment Options: It is important to invest carefully and strike a right balance between risk and returns in a best saving plan. One can afford to invest in an aggressive insurance plan offering the possibility of higher returns, albeit with higher risk when young. It is advised that people in their 20s and early 30s go in for riskier investment options. With age and greater responsibilities, one may taper the risk element and opt for safer investment options. Funds should be allocated accordingly.  

Investments Should Be Both Liquid and Fixed in a Saving Plan: Life is fraught with uncertainty. No amount of planning can predict what will happen next. Unforeseen situations and emergencies strike without prior intimation. Therefore, it is wise to have fixed as well as liquid investments. This enables one to have required support during emergencies and also avoids overspending. If the situation demands, liquid investments provide much-needed cash in times of need.  

Start Small in These Tax Saving Investments: Investing is an art and it takes years to become good at it. It is best to start small and gradually increase the invested amount with experience. Age also plays a role in investing. As we age, our income levels increase and so does money at disposal for investing. One can choose premium payment option, ranging from monthly to annual to single premium depending on how much money is at hand, keeping in mind other financial commitments.  

Research Thoroughly These Best Savings Plans: There are hundreds of tax saving investment insurance plans available in the market, each having different features and benefits. To avoid choosing a wrong insurance plan, one should spend sufficient time researching before investing. The internet is a great way to research about available investment options. One can go to leading online insurance comparison portals and also visit individual insurance policy websites. Financial newspaper, magazines and periodicals are pretty good sources of information related to best investment options and best saving plans in India. One can even take professional help of a certified financial planner and invest in the best investment plans.  

Review Portfolio periodically to find the Best Saving Plan in India: Buying the best savings plan is not enough. The investment portfolio has to be reviewed periodically, atleast once every year, so that changes can be made as per the situation at that point in time. Circumstances change – both personal and external. The markets and economy may be performing better and stock markets may be on the rise. In such a situation, one may want to increase exposure to equity. Periodic review allows one to calibrate investments to provide best possible returns.  

Ask Questions to Find the Best Investment Options: Insurance plans have become complex. They come with terminology which may be Greek to someone new to investing. Even for people who have purchased insurance plans in the past and have experience with investing, it is a good idea to clear any doubt regarding a particular plan. Understand from the insurance advisor/agent or company representative, details about the policy so that there is no ambiguity left. One can make use of an investment calculator India to calculate the exact premium before buying an insurance policy. 

Things to Avoid When Investing In an Insurance Plan 

Over Exposure to Single Market Instrument: The old idiom to avoid putting all eggs in one basket holds true for investing in saving plans as well. One should avoid over-exposure to a single market instrument. It is wise to spread investment across a range of investment instruments to hedge against extraordinary loss in a particular instrument.  

Over Investing: Over investing can burden finances for present needs. Many times people invest more than what they can comfortably put aside for meeting regular expenses, resulting in the cancellation of policies. The cumulative effect of such cancellations is the loss of hard earned money in penalties.  

You may also like to read : Income Tax Refund - Basics, Process

What is investment insurance plan?

Ans:

Investment plan allows you to get good returns through the interaction of your capital with other equities like mutual funds, equity, etc. It is a combination of investment and life cover which gives a triple bonanza=

Term (life cover)                                       

Investment (Wealth creation)

Tax benefits (80C & 10(10D)         

What is a systematic investment plan (SIP)?

Ans:

It is a smart and hassle free mode of investing money in mutual funds. It allows you to invest a pre-determined amount at a regular interval in mutual funds, i.e, weekly, monthly or quarterly.

What happens If I don’t pay premium on due date?

Ans:

All insurance companies provide grace period, which means you will be given some more days to pay your premium. However, if you still fail to pay the premium then your policy will get lapsed. You must revive the policy by submitting necessary documents and paying penalty charges, as stated by your insurance company. The charges are payable for lapsed duration and hence increases with increase in the lapsed duration.

 

 

Where can I invest?

Ans:

There are various financial instruments available in the market where you can invest as per your requirement. Some of the top ones are detailed below-

 

Type of Investment

Tenure

Return

Tax Applicability

Public Provident Funds (PPF)

15 years but can be extended in the block of 5 years after maturity

8.7%, interest rate changes as per RBI guidelines

The invested amount is eligible for tax deductions under Section 80C and returns are also tax free.

Bank Fixed Deposits

Few days to several years

Usually over 8%

Interests earned on fixed deposits are taxable at the normal tax rate.

Savings Bank Account

No maturity

Interest rate varies between 4-8%

Interest earned in saving bank account will be exempted from tax up to Rs 10,000 under Section 80TTA.

Non convertible debentures (NCD)

No cap on tenure

Interest rate varies between 11-12%

Short term gain which arises after selling NCD before 1 year is taxable as per the income slab of the individual. However, if it is sold after 1 year then it will be considered as long term gain and would be taxable at 10.30%.

Equity-linked saving schemes (ELSS)

3 years lock in period

17.5% from past five years

You can claim up to Rs 1.50 lakh deduction from your gross income under Section 80C of the Income Tax Act.

Rajiv Gandhi Equity Savings Scheme (RGESS)

No cap on tenure

 

The deduction is subject to maximum investment limit of Rs 50,000 under Sector 80CCG, which is in addition to deduction available under Section 80C.

ULIPs

It can be taken for short duration, say 5 years but to yield maximum returns you should stay invested at least for10 years.

7.2-18.8 % from past five years.

Under Section 80C of the Income Tax, deduction up to Rs 1 lakh is given if the investment is made in specified funds. At the time of maturity, the entire proceeds will be tax free under Section 10 (10D).

Employee Provident Funds (PF)

Either you can withdraw the PF amount or can transfer it in your next organization

8.75%

Amount is tax free under Section 80C and the maturity corpus will also be tax free.

Senior Citizen Saving Scheme

Available for a period of 5 years

9.20%

Tax benefit is available under Section 80C of the Income Tax Act. TDS is deducted if the interest exceeds Rs 10,000/annum.

New Pension Scheme

Money can be invested up to 60 years of age

5-12% in past three years

Tax deduction under Section 80C, 80CCD available up to Rs 2 lakh.

National Saving Certificate (NSC)

For 6 years

8.50%

It is eligible for tax deduction under Section 80C for an investment up to Rs 1lakh.

Sukanya Samridhi

Money to be deposited till 21 years age or girl’s child marriage whichever is earlier

9.2%

Investment amount and interest earned is tax free under Section 80C

 

What if the insurance company closes down? Will I lose all my money?

Ans:

No you will not lose any money. IRDA has strict rules to take care of such situation where the insurance company is near to close down. In fact there is not even a single case in the insurance sector where an insurance company is closed down. When a company reaches to the stage of closure, it has always been acquired by other company. The clear example of it is ING Vysya Life which is now renamed as Exide Life Insurance as it is acquired by Exide.  

While you can't predict when an insurance company might call it quits, but there are several provisions available to safeguard interests of policyholders. As per Section 64VA of the Insurance Act 1938, there is a solvency margin of Rs 150 crores, which is directly linked to the premium collection, and has to be maintained by every insurance company. Under the supervision of IRDA, insurance companies deposit amount at RBI, as the safety deposit which will be used for repaying dues of customers in case insurance company goes bankrupt.

 

Also, this solvency margin keeps rising as and when the insurance company expands its portfolio. It means, even if your insurance company wants to close down its business or moves out of the country, RBI can repay policyholders from the security deposit amount on behalf of the insurance company.

What documents do you require to buy an investment plan?

Ans:

Following is the list of documents which are required at the time of buying an investment plan-

  • Duly filled proposal form
  • KYC (Know your client) and PAN card
  • Income proof, depending on premium
  • Blank cheque for getting payout
  • KYC of proposer/life insured incase of child plans

How can I submit my documents?

Ans:

You can easily submit your documents by uploading them online, courier or mail it to the nearest branch. If the policy is bought through an agent then documents can be submitted to the agent also. It means, if you have purchased policy from PolicyBazaar then you can give requisite documents to us and we will submit them with the insurance company.

What is endowment plan?

Ans:

Endowment plan is a type of traditional life insurance plan that gives dual benefits of life cover and savings to a policyholder. It is an ideal investment option for people with a low risk appetite and who want to invest for less than 10 years. It has a fixed +variable structure. Although endowment plan is not market- linked, it could participate in company’s profit sharing also.

Who will get the claim if the insured dies?

Ans:

Beneficiary would be entitled to get the claim in the event of death of the insured.

Who is a beneficiary? Why it is important to have a beneficiary?

Ans:

A beneficiary is a person or entity entitles to receive claim amount and other benefits upon the death of the policyholder. A proper nomination is required to ensure that your loved ones get all benefits of a policy without any hassles. It allows fast claim settlement in the hours of needs

Do I need to go for medical?

Ans:

No, there is no stringent medical formality which you need to undergo to buy an investment plan because of comparatively lower life cover. However, insurance company can ask to submit for medical reports if the proposer falls in the high age bracket or have medical issues. Also, if the sum assured is very high, medical test could be asked by the insurer.

What is the claim settlement process in case of death?

Ans:
  • Intimation of claim= Intimate the insurance company as soon as possible. The claim intimation should consist of information like policy number, name of the insured, place of death, cause of death, name & relationship of the claimant.
  • Submit relevant documents= Claimant is required to furnish documents along with the claim form to the insurer. Some of the requisite documents include original policy document, counter signed claim form, address proof of the nominee, copy of death certificate issued by local authority, etc.
  • Step 3= After receiving all policy documents along with a duly filled form, the insurance company will carefully scrutinize all documents and will either accept or reject claims on the basis of policy terms & conditions.

For more information Please Visit

What is the claim settlement process in case of maturity?

Ans:

Claim settlement is one of the important services that an insurance company provides to its customer. In case of investment policies, policyholder gets a letter from the insurance company well before the maturity date. The following steps are involved in the claim settlement process-

  • Download the discharge form from the company’s website. Fill it with necessary details like including policyholder’s name, ID and policy number.
  • Attach original policy documents along with KYC and bank details. As claim money is usually paid electronically you should give your bank account details.
  • Submit the duly filled form along with requisite documents at the company’s branch office.
  • For more information Please Visit

What are the reasons of claim rejection in case of maturity claim?

Ans:

You have bought an investment plan to bolster your savings. However, financial security will become a reality only when your insurance company settles your claim in a hassle-free way. If a claim gets rejected then the dream of a viable financial life becomes bleak. So, it is worthwhile to know top reasons of claim rejection-

  • Trusting insurance agent blindly- While buying a policy, we are always in hurry and want things to happen in a jiffy. We never pay attention towards proposal form. We only sign the form and ask the insurance agent to fill it. This is a wrong practice because the agent may not know all requisite details about you and as a result, chances are high that incorrect information is filled in the form. It is our responsibility to disclose all important information to the insurance companies. If you hide information or fail to give correct details, then an insurance company has full rights to reject the claim. To avoid this, it is advised to fill the form by yourself and put correct information like income, age, etc.
  • Hiding medical details- Although, you aim to buy an investment plan to strengthen your financial security, but general medical information is also required to fill in the form. So, make sure you are disclosing all relevant facts regarding you and your family. It is necessary to give details of habits pertaining to tobacco and alcohol.
  • Policy lapse- This is one of the biggest threats to claim settlement. You will be entitled to get the claim settlement only when your investment plan is in force. It is crucial to pay premiums on or before the due date. Insurance companies also provide a grace period after the due date and if you will fail to pay your premium during this term, you will not be entitled to get a claim. Many times it has been seen that people do not pay premium after the stipulated time frame because their agent has asked them to do so. In such a case, a policyholder assumes that the policy is active but in reality it is inactive.

How to create the right investment plan?

Ans:

Let’s have a look on few important guidelines that your investment plan should have-

  • Define objectives= The most important factor is the objective of your investment plan. For example, your objective could be accumulating Rs 50 lakh in next 10 years by investing Rs 10,000 a month. Once you have clearly defined your goals, look for financial instruments which will help you in accomplishing your objective. There are various financial instruments like equity, mutual funds, bonds, bank account, fixed deposits, etc., where you can invest. Finally, you have to decide how much money to invest in different plans.
  • Right asset allocation= The objective behind asset allocation is reducing risk of putting all eggs in a single basket. Asset allocation helps people in diversifying their risk and is useful in reducing market fluctuations. For instance, market fluctuation is more in equity, less in bonds and negligent in government scheme. The return in equity is higher as compared to other investment avenues.
  • Start early= Never delay your investment plans and reap maximum benefits by starting investing early.

Investors should do a thorough market study and read about companies before investing in equity. For banks, saving accounts, FDs and RDs, you should check interest on returns. If investment is in bonds, make sure that you understand rating of the bond. As far as possible, do your own study before picking one investment over other.

What is tax saving instrument plan?

Ans:

Those instrument plans which entitle a person to get tax benefits under Section 80C of the Income Tax Act are called tax saving instrument plans.

What are the various options of tax saving instruments?

Ans:

Some of the popular tax saving instruments are-

  • Public Provident Fund (PPF)
  • ELSS Funds/Tax Saving Mutual Funds
  • ULIPs
  • Employee Provident Fund
  • Senior Citizen Saving Scheme
  • New Pension Scheme
  • NSCs and bank Fds
  • Life insurance policies
  • Pension plans
  • Child Plans

Why should I buy online from PolicyBazaar? What are the benefits?

Ans:

Buying insurance online is fast, cheap and easy as compared to other modes of purchase. At PolicyBazaar, you can buy an insurance policy from any part of the world at any point of time.

Have a quick glance over benefits of buying insurance online from PolicyBazaar –

  • Cheaper policy= When you buy an investment plan online, the insurance company saves a lot of money which is otherwise spent on distributors, manual sales process, operating costs etc. This, in turn is advantageous to you as the online products are offered at low rates by the company. It means, you can save money by buying policy online from PolicyBazaar. Also there are various plans which can be bought only online.
  • Compare and get the best deal- You are buying an investment plan to fortify your financial security. So it becomes important to compare all available options. PolicyBazaar gives you a chance to compare available investment plans on the basis of various parameters so that you always choose the best which suits you most.

Also, agents are specific to limited insurers and therefore, they push only those policies to people which generate high commission for them. It is not the case with PolicyBazaar. Therefore, when you search policies on PolicyBazaar, you get a chance to pick a most favorable plan out of the available options.

  • Automated servicing= It is important to note that the online platform is not only limited to sales. It is a fast servicing channel which can be used by existing policyholders also. Irrespective of the fact that whether you have bought policy online or offline, you can use our viable platform to download brochure wordings, renew old policies, pay premiums and track the status of your insurance policy. In the internet world, entire process is hassle free and you can easily complete the transaction without any help. Our after sale services include constant reminders to customers regarding premium, complete assistance in claim settlement.
  • Online assistance= Our 24x7 customer support is open to answer all your queries. Also, our customer support number allows you to communicate via offline route. You can reach out to us via whatsapp also.
  • Mobile App= Now you can compare and buy policy on the go. You can share policies, documents and get premium reminders & other information anytime and anywhere.

What are tax-saving infrastructure bonds?

Ans:

These bonds are issued by Industrial Finance Corporation of India (IFCI), Infrastructure Development Finance Corporation (IDFC) and any non-banking financial company. Investments in infrastructure bonds are advised from tax saving perspective as you get an additional exemption of Rs 20,000.

What is tax saving fixed deposit?

Ans:

It is a special category of fixed deposits where investors get tax benefits when they invest money in fixed deposits. The maximum benefit is available up to an investment of Rs 1 lakh and there is a lock-in period of 5 years.

How to revive the policy after it has lapsed?

Ans:

Most traditional plans like endowment, whole-life plans can be revived, subject to conditions that your insurer might impose upon you. Here are 3 ways to revive a lapsed policy-

  • Grace Period- The first attempt which you can make in the direction of reviving your lapsed policy is during the grace period. It is usually 15 days period after the premium due date in case of monthly payment plan and 30 days in case of half yearly, quarterly and yearly payment plans. When your policy enters into grace period, all benefits, including riders, remain intact. However, once the period is over, your policy gets lapsed. So you must pay premium within grace period to keep your benefits intact and to avoid your policy from getting lapsed.
  • Re-instatement Period- If you have missed grace period, your policy might enter into the reinstatement period. The benefits which you have accrued on your insurance policy are not valid in this tenure, but insurance companies give you a chance to revive your policy during this term. It means you will require clearing all premium dues with interest in order to revive your lapsed policy.
  • Paid up premiums- Your policy will not get lapsed if you have continuously paid premiums for more than 3 years. Even if you are not applying for reinstatement of the policy, your policy would stay intact, however, its value would fall. All benefits that have been accrued on the policy are paid on the pro rata basis, depending on the number of years continued for.

It is strongly advised that you should revive your policy within 6 months of its lapse as the process is quite easy. As the time passes, process becomes tough and you may also need to pay overdue premiums along with interest and additional documents, which could include medical tests also.

How much should I invest?

Ans:

It would depend on various factors like when you start making an investment, when you decide to retire, etc. You would be able to enjoy good returns on your investment if you understand your current financial state, i.e., personal circumstances, income, fund liquidity, which you may require at the time of maturity of the policy, etc. Before zeroing in on the policy, it is crucial to understand your investment objective because then only you will be able to decide the amount to be invested.

Whom should I contact to make changes in the policy?

Ans:

Call the customer support staff of the insurance company to amend the policy wordings. An endorsement is issued to make changes like name spellings, add things, etc. Endorsement cannot be issued to make change in structure eligibility.

Can I change my nominee?

Ans:

Yes, you can change the nominee at any point of time. Just inform your insurance company about the changes either via mail or phone. You would need to fill a nomination change form by citing details like name of nominee, relationship with the policyholder, nominee's date of birth, etc. In case your policy nominee is a minor, you would also need to fill the appointee details in the form.

Can NRIs buy policy?

Ans:

Yes, an NRI can also buy an investment policy in India. Over the past few years, there has been a spurt in NRI investment owing to the government's liberal policy. Those who want to buy good investment plans in India should content competent financial advisors of PolicyBazaar for managing and helping it to grow & flourish. To know about available NRI investment plans, Please Click

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