5 Benefits of Long Term Investments
- Power of compounding: As rightly said by Albert Einstein, “Compound interest is the eighth wonder of the world”. The more time you give your investments to grow, the higher the amount you would get. For instance, a small amount of `500 invested monthly at 15% rate can grow to `16.42 lakhs after 25 years.
- Secure from short-term volatility: It is difficult to time the market correctly, hence in order to get maximum benefits, it is good to invest for a long term. By staying invested for a longer duration, you can overcome short-term volatility.
- Goal-centric planning: As you are investing for a long term, you can use it to plan for significant milestones like marriage, home, kids’ education and your retirement, etc.
- Convenience: You don’t need to worry about the investment due date. You just need to send a one-time instruction to your bank to facilitate auto debit from the bank account or credit/debit card. In addition, you can buy long term investment plans online with a few clicks* of the mouse anytime.
- Tax benefit: Long term investment plans make it easy to do tax planning every year. All you need to do is buy a long-term investment plan and invest regularly and avail tax benefits as per the Income Tax Act, 1961. It means, you not only grow your money but also save tax.
When you buy ULIPs as a long term investment option, you can enjoy all the above-listed benefits and much more.
- Flexible investment options: ULIPs give you the flexibility to invest in different fund options— equity, debt, and balanced funds— as per your risk appetite. They also let you switch between funds as per the market condition. Staying invested for a longer duration with a switching option can help you reap maximum benefits.
- Goal-oriented planning: As there is a minimum lock-in period of 5 years, you can use ULIPs to fund your long-term goals, like buying a house, funding your child’s higher education, retirement, etc.
- Loyalty additions:By staying invested for a longer duration, you can earn loyalty additions which grow your money without any further investment.
- Tax benefit:The premium paid towards ULIPs gets a tax deduction up to `1.5 lakhs as per Under Income Tax Act of 1961. Also, death benefits and maturity of the ULIPs are tax-free.
- Partial Withdrawal: Starting from the sixth year, you can withdraw up to 20% of your investments in ULIPs provided monies are not in Discontinued Policy fund to meet any future needs and let the remaining investment grow.
- Life cover: Besides growing your wealth, ULIPs are useful in securing your family’s future in your absence. In the case of your sudden demise, your nominee will get a lump sum amount to secure their future.
How to buy online?
1. What are Long Term Investments?
A long-term investment usually includes assets/investments that are non-current in nature and are held for a period of one year or more. Stocks, bonds, savings/retirement plans and real estate are some mediums through which you can make a long-term investment. Typically, a long term investment is made to meet needs such as your child’s education, marriage, etc.
2. What are the types of investment options for the long term?
There are several long term investment options. You can select one based on your financial goals or planning. These include Unit Linked Insurance Plan (ULIPs), Equity Funds, Public Provident Fund (PPF), Stocks, Mutual Funds, Bonds, Gold and Real Estate. All these investment options ensure long term gains.
3. Are long term investment plans safe?
Long term investment plans are absolutely safe and secure. These investments tend to grow as time passes by. Besides, the probability of missing out on some benefits due to the unpredictability of the market is eliminated when it comes to a long term investment. Make sure you are clear on all the terms and conditions before making a long term investment.
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*Subject to realisation of payment and documents.
Tax benefits under the policy are subject to conditions under Sec. 80C and Sec 10(10D) of the Income Tax Act, 1961. Service tax and applicable cesses will be charged extra as per applicable rates. Tax laws are subject to amendments from time to time.
Unlike traditional products, Unit linked insurance products are subject to market risk, which affect the Net Asset Values & the customer shall be responsible for his/her decision. The names of the Company, Product names or fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns.
Unit linked insurance products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender/withdraw the monies invested in unit linked insurance products completely or partially till the end of the fifth year.