The rising prices of essential items are not only affecting household budgets, but also eating up into investments. But there are a large number of insurance policies which ensure that increasing prices do not diminish the investment value at the end of year.
The experts states that the rising cost of inflation is forcing people to go for inflation coverage while buying insurance policies. Various companies like LIC, ICICI Prudential Life, Tata AIG Life and others are companies which offer such plans.
A life insurance policy needs to ensure that an investor gets more than Rs 100 invested in line with next year. So a life insurance policy needs to ensure that investor gets more than what has been invested by him.
This is a traditional phenomenon where the premium paid in the investment amount is invested in debt market. As it is a traditional product, one can take a loan against it.
In developed insurance markets, such as U.K and U.S we have indexed inflation life insurance policies. Many Indian companies are looking forward to providing products which aim at giving such inflation related products.
One of the leading insurance companies ICICI Prudential is offering a product which has seen many investors opting for a policy for inflation. Using this investment option an investor gets around 5 percent return in first year, 3 percent of 5 percent in additional returns in second year and another 3 percent in third year.
The returns which are guaranteed are cumulative. So on maturity one needs to take care of future needs. The premiums invested in such policies are basically into government securities (G-Sec) and corporate bonds.
When you decide which investment to opt for, equity or debt take care in mind erosion which would be real value over a period of time.
A life insurance policy needs to ensure that an investor gets more than Rs 100 invested in line with next year. So a life insurance policy needs to ensure that investor gets more than what has been invested by him.
This is a traditional phenomenon where the premium paid in the investment amount is invested in debt market. As it is a traditional product, one can take a loan against it.
In developed insurance markets, such as U.K and U.S we have indexed inflation life insurance policies. Many Indian companies are looking forward to providing products which aim at giving such inflation related products.
One of the leading insurance companies ICICI Prudential is offering a product which has seen many investors opting for a policy for inflation. Using this investment option an investor gets around 5 percent return in first year, 3 percent of 5 percent in additional returns in second year and another 3 percent in third year.
The returns which are guaranteed are cumulative. So on maturity one needs to take care of future needs. The premiums invested in such policies are basically into government securities (G-Sec) and corporate bonds.
When you decide which investment to opt for, equity or debt take care in mind erosion which would be real value over a period of time.
