Policybazaar.com suggests investment plans for UAE's Indian Expat

UAE : Scaling new heights every day, the economy has victoriously clamped down on COVID-induced market volatility and emerged sturdier than some of the developed countries. The economy fares rather well even if we zoom out and look at the bigger picture - India has demonstrated tremendous growth over the past two decades and now is a great time to reap benefits by investing in the markets here. 

According to Vivek Jain, Head - Investments, PolicyBazaar.com said, “When it comes to NRI investment in India, the reasons and options are both in abundance. A steady rise in FDI (foreign direct investment) inflows and government-led efforts make India conducive for investment. As per the ministry of commerce and industry, the total FDI during the first four months of this fiscal year grew by 62%. If you have set your eyes to invest in this promising growth, make sure you punctuate your financial portfolio with the right investment options.”

Even for those investors who are looking for assured returns, the Indian market today is well-poised to offer investment plans that offer excellent guaranteed returns where one can lock in their money for as long as 45 Years.

In recent years, ULIPs have garnered a lot of attention from NRIs and are emerging as a popular investment choice. The ULIPs are a unique blend of investment and insurance components. The premium paid by the customer is divided into life cover and equity investment. The plans generally carry a minimum of 5 year lock-in period and the policyholder can even switch between the funds during the policy period. 

What makes these plans popular is that the mortality charges are returned to the customer upon maturity. Mortality charges are levied by the insurer to cover the risk of death in investment plans. If you invest your money for 15-20 years, you stand to gain returns as high as 12-15%. Besides, you can always avail tax benefits on these plans.

When it comes to savings, the preferred option for most households used to be FDs. However, this is changing now due to falling interest rates on FDs. The average returns that FDs offer is a taxable 5% interest rate. When compared to the inflation rate of 5.3% pegged by RBI, FDs are not just offering less returns but in fact, fetching real negative interest. The better alternative here is to invest in guaranteed return plans.

These are savings cum investment plans that give you a promised rate of return after a fixed period of time. Moreover, they also guarantee a payout in case of the sudden death of the policyholder. This not only secures your present but also your future. These plans can offer a tax-free return of 6 to 6.5%. The zero risk nature of these plans is their USP. Irrespective of market volatility, they offer the promised return to the policyholder. They also allow your money to be locked in for a period of 30-35 years which guarantees higher returns. You also have great flexibility to invest with these plans. You can choose to invest Rs 2500 to Rs 2 lakh monthly or annually and even decide to receive the income monthly or annually.  

If ULIPs and guaranteed return plans have caught your fancy, here is another option that may interest you - Capital Guarantee Solutions that offer you the best of both. These plans are a hybrid of ULIP and guaranteed return plans. While it guarantees security to your invested amount in event of market volatility, it also offers you higher returns reaped from the upside of the market. Usually, most plans split 40% of the amount in guaranteed return plan and 60% into ULIPs. Apart from this, the dependents receive the life cover in case the policyholder passes away, which is 10 times the annual premiums paid. These plans also offer tax benefits on premiums under Section 80(C) of the income tax act and on the maturity amount through section 10 (10D).

These plans are ideal not just for you, but also for your dependents due to the insurance component. If you invest in Child Capital Guarantee Solution, their future is secured even if you are not around. In the event of the policyholder’s death, the life cover helps meet immediate expenses. The unique in-built feature of waiver of premium ensures that the future premiums are waived off. The child gets a regular monthly income and receives fund value upon maturity.

Annuity plans work best for your retirement planning. These are prudent, risk-free investments that secure your sunset years. Under this, the policyholder pays a lump sum amount to the insurance company to build a corpus that can be made available to them after retirement. You can choose your fixed payouts to be monthly, quarterly, half-yearly or annual in frequency. These plans also offer an investment period for life and up to a 6.5% rate of return. They also come with a life cover that helps you build a legacy. 

Now that you have a better view of these options to choose from, do remember the universal rule of thumb - the possibility of getting higher returns hinges on investing in a longer period of time. So, invest early and avoid losing out on returns.

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© Press Release 2021