The best investments for today’s times

An endowment policy steadies you in times of rising inflation and growing financial uncertainty.

The more each day goes on, the more you realise that rising expenses and high inflation only serve to drain all your resources. It feels like you are on a perpetual treadmill – you work so hard all day, you meet every possible deadline, but all your dreams remain just out of reach. You strive to save money but you cannot, you wish to make investments but you are left with insufficient funds. At some point in time, you begin to worry if you will ever be able to achieve any of your goals.

Your bigger worry is for your loved ones. How will they survive if something happens to you? In the face of insufficient money, how can they meet their expenses and realise any of their dreams?

At this juncture in your life, it is worthwhile to examine a useful financial product known as the ‘endowment plan’. This is a savings and investment plan that helps you grow your residual funds into a large savings corpus for the future. You might have considered investing in a bank fixed deposit or taking life insurance so that you may have surplus funds for the future. However the endowment policy is a better option in view of your financial goals.

Your endowment policy investment helps you grow a robust savings portfolio through periodic savings made over the long term. Additionally, there is the prospect of receiving life coverage at the same time.

How it works: The policy holder makes monthly or annual payment, as the case may be. One part of the monies paid is diverted towards the plan premium, while the remainder is invested in equities or other market instruments. This latter component gets the policy valuable returns over the long run – these returns are accrued in the form of bonuses and are sourced from profits that companies (that the policy holder has bought shares in) make. These returns result in an appreciable savings fund for investors.

While the policy holder creates a large savings fund, he also ensures his loved ones’ well being with an endowment plan: the policy comes with a death benefit as well as a maturity benefit. Hence, whether the policy holder is present in the future or not, the policy takes care of his family’s future needs. Meanwhile, the maturity benefit is counted vis-à-vis the terminal bonus and reversionary bonus therein.

Apart from the concept of encouraging savings to create a fund for the future, one can also get excellent tax benefits on investing in endowment plans. The tax benefits are granted under Sec 80C of the Income Tax Act, 1961 – this is further saving for you.