3 investment options you need in this COVID-19 scare

The COVID 19 pandemic that has triggered a health and humanitarian crisis around the world has also wreaked havoc on the global economy. In India, the BSE Sensex and NSE Nifty have been recording massive losses for some time now. The RBI too, has conducted a rate cut to 4.4 per cent as a means to reduce the financial stress on the Indian economy. With the stock market painted in red, it is critical to revisit the process of how to invest money and evaluate your financial plans to balance out the risks and opt for higher return on investment that is both more secure and safe.

As the market slowly gathers momentum in pockets around the globe, here are three types of investments you can consider to create a more balanced financial portfolio.

  • ULIPs (Unit Linked Insurance Plans)

ULIPs are a great means of making equity-linked investment while also enjoying the cover of Life Insurance. With a 5-year minimum lock-in period, ULIPs offer you an insurance cover for exigencies that might pop-up unannounced. They also function as great means of creating wealth and are ideal for long-term investment. Depending on your risk appetite as well as preference, you can choose between equity or debt funds or might opt for a combination of the two. It is always advised to stay invested for a longer term in order to maximise and get desirable outcomes.

  • Retirement and Pension Plans

Retirement Pension Plans are designed to offer you a form of regular income during retirement with the money you save during your work life. By allocating a part of your savings over a period of time, you build a sufficient corpus that provides you with earnings when your professional income begins to ebb. The accumulation phase of the retirement plan lets you invest your money through your work life. These investments over the long term help generate appropriate and significant returns, which can be directed towards building a sizeable corpus for retired life. This amount can be used for availing an annuity product, which can aid in providing a regular income for life in the post-retirement phase. The regularity of this income too can be adjusted based on the annuity payment frequency you choose. Retirement and pension plans, therefore, ensure that from a financial standpoint, the family’s lifestyle and life goals are not compromised. Retirement planning also helps you be prepared for exigencies that might arise. Also, with rising inflation and high cost of living, it is all the more important to have your retirement planning in place.

  • Guaranteed Return Plans

As the name suggests, guaranteed return plans are the means for earning guaranteed returns. These are non-participating, non-linked endowment plans that provide you with a guaranteed return against your investment. Some Guaranteed Return Plans even offer the option of locking in the guaranteed returns for long periods of time, which could save you from market fluctuations in G-Sec rates. This makes Guaranteed Return Plans ideal for people who do not have a huge risk appetite and prefer to not opt for volatile investment options.

Apart from great individual benefits, these three types of investment options also offer significant tax benefits under section 80 (C). As these investments are linked to insurance, you can claim up to 1.5 lakhs, and the proceedings too are tax-free under Section 10 (10 D), provided that the sum assured is over ten times of the premium according to the old tax regime.

These unprecedented times call for a change in your investment design so that you can enjoy better return on investment in the future. With the right combination of investment plans, you can strike the correct balance that can ensure you are prepared for adversities, if and when they come knocking at your door.