It’s easy to get caught up in the here and now when it comes to saving money, but it’s important to consider your future needs as well. There are many reasons why you should choose an investment-linked plan, especially when it comes to your insurance needs. Find out the benefits you’d derive from such a plan especially if you use a company like https://www.ocbc.com/personal-banking/insurance/investment-linked-insurance-plan to access this service.
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Table of Contents
Monetary protection
Like a life insurance policy, an investment-linked plan helps protect your loved ones from paying tax on your estate when you die. But it’s also one of Singapore’s few policies that can help provide for future financial needs, too. In short, an investment-linked plan is a relatively low-cost way to ensure your savings will continue to grow even after death. What’s more, because your contributions are locked in there’s no need to worry about market swings in value. No matter what happens with currency exchange rates or global markets—your money will stay safe and sound.
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Enables you to build your wealth
Insurance plans are an excellent way to build your wealth while keeping a part of it protected and secured. The longer your money stays invested in an insurance plan, rather than put into a bank account, for example, will give it a better chance of growing. This is because there are several advantages offered by investment-linked insurance plans. Investments in insurance plans grow over time and may have tax benefits that help to boost returns too.
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Guaranteed protection from emergencies
Investment-linked insurance plans don’t just protect your income. They also look out for your peace of mind. With an investment-linked plan, you get a guaranteed amount of coverage for a variety of events such as death, disability, and critical illness. You can also create a customized set of policies that cover additional needs like takaful for a car accident or personal property protection. And just in case you’re unable to pay your premiums for a specific period you can take a partial break or make partial withdrawals to cater for your emergency.
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Flexible risk management
Investment-linked plans can help diversify your portfolio and manage risk by enabling you to choose the investment option of your choice, depending on how much risk you are prepared to take. This enables you to spread your money between different asset classes – whether it be fixed deposits, bonds, or stocks. During market downturns, an investment-linked plan ensures that at least a certain percentage is invested in safer investments. You decide where to draw that line.
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Helps you make passive income
The insurance investment-linked plan offers potential investors a chance to make interest on their money even if they do not want to actively invest. Investment-linked plans are just like other insurance products, where premiums go into one kitty and claims will come out of another kitty. This way all premiums paid are eligible for returns as future claims, minus administrative costs that insurers might charge for such investments. Investors can thus end up making returns without incurring risks, which is what passive income means. In addition to being safe, such plans also offer tax benefits at both ends – when the premium is paid and when it is received as returns from insurers later. It makes it a more tax-efficient instrument than most commonwealth creation instruments.
Conclusion
If you are thinking of extending your insurance capacity, then choosing a linked plan from a trusted company like https://www.ocbc.com/personal-banking/insurance/investment-linked-insurance-plan is an excellent idea. Investment-linked plans have become one of the most popular investment products as they offer attractive returns that can match or even exceed interest rates offered by current bank deposit rates. But these additional benefits don’t come at a premium cost either, making them a great choice for people looking to provide themselves with all they need in terms of insurance, investments, and savings options.
