Investment Plans

Investment plans are wealth creation products that can help you achieve your long-term and short-term financial goals through systematic investments. Investing right can help you grow your money to secure your financial future and fulfil your dreams. Different products offer different benefits and risks. Therefore, it is important to understand the various investment plans before selecting one.

What are investment plans?

Investment plans are financial products that help you build wealth over time by providing you with returns. These returns can be used to fulfil your financial goals and dreams.

Factors to consider while choosing investment plans

Here are some of the key things to keep in mind while choosing an investment plan:

1. Financial goals and time period

Your financial goals and the time period you have to invest can help you decide on the right investment plan. Your goals may be long-term or short-term. Your long-term goals can include purchasing a home or living comfortably after retirement. Your short-term goals may be travelling, purchasing a car or more. A suitable investment plan can be chosen based on the time horizon of your goals. For instance, you may invest in a ULIP for long-term goals like your child’s marriage, child’s education, your retirement and more.

2. Planned future expense

You may have some planned expenses in the future for which you would want to start investing. These can be your child’s education, child’s marriage, buying a house, starting a venture or more. You can plan for each of these goals with suitable investment plans. Understanding your future expenses can help you understand your needs and find the right investment plan.

3. Present expenses

Apart from your future goals, you may want to maintain your current lifestyle or improve your standard of living in the future. For this, you may want to invest in a plan that provides you with a regular income immediately.

Benefits of investment plans

Investment plans can offer you a host of benefits. Some of these have been discussed below:

Growth of your money

Investing helps you grow your money. When you invest your money right, it grows in value and provides you with returns that increase your overall income and enable you to achieve your financial goals.

Financial independence

Investing in the right plan can ensure you stay financially prepared to meet your needs and fulfil your dreams. This provides you with financial independence and the freedom to live your life on your own terms.

Life cover⁵

Some investment plans, such as ULIPs, offer a life cover⁵ that protects your loved ones in case of an unfortunate event.

Tax² benefits

Depending on the plan you choose, you may receive tax² benefits that increase the overall returns from the plan. For example, you can claim a tax² deduction for the premiums you pay towards your life insurance plan under Sections 80C and 80D of the Income Tax Act, 1961 depending on the investment plan you choose. The amount you receive from the plan is also tax-free² under Section 10(10D) of the Income Tax Act, 1961 depending on the type of plan you choose.

Types of investment plans in India

Below are some of the investment plans available in India:

Unit Linked Insurance Plans (ULIPs)
Savings/endowment plans
Retirement plans
Public Provident Funds (PPF)
Tax-saving fixed deposits

Unit Linked Investment Plans (ULIPs)

A ULIP is a financial instrument that comes with the dual benefit of investment in the capital market and financial protection through a life cover⁵. Typically, these plans offer investment opportunities through equity, debt and balanced (hybrid) funds making them appropriate for investors of all kinds of risk appetite. ULIPs are long-term investment products offering a healthy market-linked capital growth over a 10 to 15 year horizon. The ICICI Pru Signature Plan is a good ULIP offering useful benefits, such as systematic withdrawals¹, wealth boosters^*, tax benefits², unlimited free fund switches, and more.

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Savings/Endowment Plans

Endowment plans are life insurance policies that combine savings and protection and offer the benefit of both through a single instrument. These plans provide risk-free savings in a systematic manner along with a life cover⁵. The returns on these policies are not market-linked. They come with a fixed policy tenure. For assured returns, you should go for a plan like the ICICI Pru Guaranteed Income for Tomorrow Plan. This plan offers you guaranteed³ benefits in the form of a lump sum or regular payment as per your choice, making it a suitable option for risk-free savings.

³ T&C apply

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Retirement plans

Retirement plans help you stay financially independent during your retirement. These plans are primarily of two types:

Retirement savings plans - These plans help you save for your retirement. They help you contribute regularly during your earning years and provide you with a large amount at the time of your retirement. You can consider investing in a retirement savings plan if you want to start saving for your retirement in your early years

Retirement annuity plans - These plans provide you with a guaranteed^{^} regular income during your retirement in exchange for a lump sum investment. You can choose to receive the income immediately or at a later age. You can consider investing in a retirement annuity plan if you are in your 50s and nearing retirement

^{^}T&Cs apply

Public Provident Fund (PPF)

PPF is also a retirement investment option that offers high returns at minimal risk. A PPF can help you systematically invest small amounts for big goals. It is a low-risk investment plan that you can consider for long-term goals, such as retirement. You can invest up to ₹ 1.5 lakh every year. A PPF can be opened in a bank or post office by all Indian citizens. It offers tax² benefits under the Income Tax Act, 1961.

Tax Saving Fixed Deposit (FD)

A tax-saving fixed deposit is an investment plan in India that lets you save a fixed amount decided at the time of the purchase of the plan. The investment in tax-savings fixed deposits will be for a pre-decided duration when the plan is purchased. These FDs offer tax² benefits under Section 80C of up to ₹ 1.5 lakh per annum.

COMP/DOC/Oct/2022/2510/1366

Conclusion

Investment plans can help you create wealth, but it is important to understand how each instrument can benefit you as per your financial goals and future needs. Understanding the various investment options and being up to date with their benefits, interest rates, and features can help you pick a plan that aligns with your goals and offers you the best possible returns.

FAQs

1. What are the best investment plans for high returns?

You can evaluate options and choose to invest in market-linked plans based on your risk profile that may offer you the highest returns. Some of these include options like Unit Linked Insurance Plans (ULIPs) that invest in equity funds, mutual funds, National Pension Scheme (NPS), and more.

2. What are the safest investment options in India?

Guaranteed income plans offer low risk. Savings/endowment plans offer assured income along with a life cover benefit. The payout is fixed and your returns are not linked to the market. Therefore, you can invest your money at minimal risk.

3. What are the best long-term investment options in India?

The Public Provident Fund (PPF), National Pension Scheme (NPS), Unit Linked Insurance Plans (ULIPs), retirement plans and Savings/Endowment plans are some long-term investment options in India that you can explore.

4. What is the best age to start investing?

The sooner you start investing, the higher returns you can get. Starting early offers you more time for your money to grow and provide returns. It also helps you manage risk. It helps you steadily and consistently build your savings for your financial goals and enables you to stay prepared for any financial emergency. Starting early allows you to invest smaller amounts over time, thereby going easy on your pocket.

5. How can I start investing in my 20s?

In your 20s, you have fewer financial responsibilities. This allows you to concentrate on your individual financial goals and your future. You must first plan to get adequate life insurance cover and health insurance. Life insurance premium is the lowest when you are young and it remains the same throughout your policy term. Buying life insurance early can help you save a lot of money.
You should also consider investing for your future goals. Investing at an early age offers you a longer investment horizon, enabling you to earn greater returns. At a young age, your risk appetite is higher. You can consider investing in market-linked instruments such as Unit Linked Insurance Plans (ULIPs), mutual funds, shares and more.

COMP/DOC/Feb/2023/222/2318

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Disclaimers

¹ Systematic Withdrawal Plan is allowed only after the first five policy years.

² Tax benefits under the policy are subject to conditions under Sections 80C, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods and Services Tax and cesses, if any, will be charged extra by redemption of units, as per applicable rates. Tax laws are subject to amendments from time to time. Please consult your tax advisor for more details.

³ A guaranteed lump sum or regular income will be payable based on the plan option selected.

⁴ The Company will allocate extra units as below provided all due premiums have been paid:

Premium Payment Term	Loyalty Additions		Wealth Boosters
Premium Payment Term	(End Of Year 6 And 7)	(End Of Year 8 And Onwards)	(End Of Every 5th Year, Starting From The End Of 10th Policy Year)
5 years – 6 years	0.10%	0.10%	1%
7 years – 9 years	0.15%	0.30%	1%
10 years and above	0.10%	0.10%	2%
Single Pay	0.25%	0.25%	1.5%

For single pay policies with a policy term of 5 years, a loyalty addition of 0.25% of the average of daily Fund Values, including Top-up Fund Value, if any, in that same policy year, will be payable at the end of the fifth policy year

Each Loyalty Addition will be a percentage of the average of daily Fund Values including Top-up Fund Value, if any, in that same policy year as mentioned in the table above

Wealth Boosters will be a percentage of the average Fund Values including Top-up Fund Value, if any, on the last business day of the last eight policy quarters

Loyalty Additions and Wealth Boosters will be allocated among the funds in the same proportion as the value of total units held in each fund at the time of allocation

The allocation of Loyalty Additions and Wealth Boosters is guaranteed and shall not be revoked by the Company under any circumstances

If the premium payment is discontinued anytime after 5 years, the number of years for which premiums have been paid will be considered as the premium paying term for the purpose of deciding the Loyalty Additions & Wealth Boosters to be paid for the rest of the policy term as per the table above

⁵ Life Cover is the benefit payable on the death of the life assured during the policy term.

^* Wealth Boosters equal to 3.25% of the average of the Fund Values including Top-up Fund Value, if any, on the last business day of the last eight policy quarters will be allocated as extra units to your policy at the end of every 5th policy year starting from the end of 10th policy year till the end of your policy term.

^{^} Annuity will be payable in arrears. The frequency of annuity payments can be monthly, half-yearly, quarterly or annually as chosen by the annuitant at the time of purchasing the annuity. The annuity amount chosen at policy inception is guaranteed for life.

ICICI Pru LifeTime Classic (unit-linked non-participating individual life insurance plan) - UIN: 105L155V08

ICICI Pru Guaranteed Income For Tomorrow UIN: 105N182V06

ICICI Pru Signature (unit-linked non-participating individual life insurance plan) - UIN: 105L177V05

W/II/5117/2021-22