OneInsure Blog
Post By abhishek
Love Your Family? Express It with a Short-Term Plan (Part 2)
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Short-term Insurance, Life Insurance, Endowment
It is typically at the age of 50 or 60 when the Indian householder realizes that he should have started investing earlier in life so that he could provide his family certain luxuries. Isn’t it unfortunate that such important realizations come only after it is too late to do anything about them?
Luckily for you, though, we are here to talk about how you can express your love for your family with timely Short-Term Plans that have the ability to quietly keep vesting while you take care of your family’s expenses! Let’s understand how these work in this article:
The Hows and Whats of Short-Term Plans
Short-Term Plans are investment instruments that allow you to invest for a short period (as low as 5 years) and then stop investing when your young family demands the lion’s share of your income. The money that you have invested keeps growing steadily and at maturity, you receive a lump sum that can be used for important milestones like a child’s higher education or marriage, to buy a new car, or even to plan a foreign vacation for the family.
Benefits of Short-Term Plans
Short-Term Plans are insurance products offered by all major insurance companies that you can opt for through OneInsure. Here are the benefits of Short-Term Plans:
- Make hay while the sun shines! Short-Term Plans allow you to customize when you want to stop payments (premium-payment term | PPT) and when you want the vesting period to end (policy term | PT). Since you can decide the premium-payment term and the policy term right at the start, this gives you the flexibility to choose preferred terms keeping in mind your specific upcoming milestones and life events.
- Great for Businesspeople – Although Short-Term Plans are a great financial tool for all Indian householders, they tend to be especially preferred by businesspeople because of the nature of their profession and large but inconsistent incomes that are not guaranteed in the long run. Even if the business stops being highly profitable later in life, you can be rest assured since you have already started earning vesting benefits on your Short-Term Plan and you don’t have to keep making premium payments for years and years.
- Great goal-oriented investments – Because of the very nature of Short-Term Plans and the flexibility to choose the policy term at inception, they can be started with certain goals in mind. For example, you can start a Short-Term Plan with an annualized premium of Rs 1 lakh and a PPT of 5 years and PT of 15 years when your child is 3 years old. This policy will pay out a good sum of money when your child will be 18 and has to choose a Professional Course after Junior College. Here, your child’s enrolment into a good University is the goal of the investment!
- Tax benefits
So, here’s a simple way you can avoid being like the 50- or 60-something urban Indian who is looking at their investment behaviour with regret later in life. Short-Term Plans are ideal for you if your current expenses are less and savings are more AND if you are sure that your expenses will increase in the years to come.
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