There’s no denying the fact that financial planning is a meaningful and a doable task at almost all stages of life. It becomes even more important for the salaried employees who have a fixed and finite number of resources for generating income. A large portion of their income is derived from their monthly salary. With a simple and structured approach, one can be efficient and effective moneywise in financial planning.
We have ranked the suitable plans that can help in building a reliable corpus of finance for your future, in this order-
1: Retirement Plan
Your planning for retirement should, typically, begin long before you hit your middle-age. Very few people know this, but the minimum entry age of buying a retirement plan with ICICI Prudential is 35 years. The objective is to keep your funds invested in a market linked plan and give you returns on maturity, when you need financial backing during your retirement. It’s a safe and reliable option, as a plan like ICICI Pru Easy Retirement gives you assured benefit. It ensures that you do not lose the money you invest.
2: Child Education Plan
Every parent wants to give a secured future to their kid, make sure his/her education continues smoothly, and lay down a strong foundation for his/her career and life. A child education plan like ICICI Pru Smart Kid offers benefits such as premium waiver, lump sum secured amount in case of your demise, and tax exemptions.Such a plan can be a major contributor to your financial objectives of funding your child’s education, his higher studies and other needs.
3: Market Linked Investment Options
Market Linked Investments may seem difficult to understand at first, but plans under them give a lot of flexibility, control and most importantly, high returns. New-age market-linked plans such as ULIPs give a more significant advantage with their flexibility to spread your investment across equity and debt funds and make sure that you have the flexibility to switch funds as per your understanding of the market. They increase your chances of gains and are a good source of building your wealth.
4: Health Insurance Plans/Mediclaims
Health Insurance plans or mediclaims give a lot of support during hospitalisation, and sufficiently covers hospital related expenses. Besides health plans, critical illness plans cover more than just your expenses and reimbursements. They provide a lumpsum payout on diagnosis of diseases to make the best treatment possible.
5: Term Plans
Term plans top this list as they mainly provide a life cover to the investor. Imagine what would it be when all your investments are secured, but you aren’t. Term plans give a safety net to you and secure your family financially in the event of your demise. It acquires significance because of the substantial amount of cover it can provide for relatively cheaper premiums. It becomes the only plan which can truly cover the financial impact of an unfortunate demise of the family’s breadwinner. Term plans like ICICI Pru iProtect Smart also provide you cover from 34 critical illnesses which can come to your rescue in your lifetime.
Things you should consider in Financial Planning:
Risk Factor:The width of your investment portfolio depends on your propensity to take a risk and the external risk affecting each of them. It is important to manage your risk as well as analyse your risk appetite. Additionally, the life stage you are at also should matter when choosing your investment plans. As you grow in life, your family expands, your financial priorities alter accordingly, making your risk taking ability to change too. A 38-year old adult’s financial planning will be more secure and less risky owing to the life situations and responsibilities entailed by middle age, as compared to a 25-year old adult.
Funds Allocation:Apart from branching out in your financial plan, you have to ensure that you have sufficient funds to fulfil all your financial wishes. A right set of allocation of funds is equally important, deciding how much funds you assign to each one of them after factoring their risk and years till maturity. That way, you can fight the risk of outliving your financial assets and can wisely allocate them.
Emergency funds:A vital aspect about investments is that they have higher expected returns when you don’t liquidate them sooner. It’ll require you to be invested in your options for long. But since you also have to cater to your emergency needs, make sure, your portfolio gives you that freedom. Like, in a child education plan by ICICI Prudential, you can make an emergency withdrawal from your funds in case such a need arises. Additionally, it also has a premium waiver benefit wherein all future premiums will be waived off in case of your demise, giving your spouse and child a burden-free life.