Am I the only one who had to pass high school and college so fast that I didn’t get enough time to reflect on “the future”? Nope, and I don’t think you are. The last thing anyone wants to do is to follow the herd and end up having no savings for life’s big accomplishments.
Savings for a pension or kids is fundamental, but how about paying for your trip to another city or even another country? Or maybe you would like a one-of-a-kind luxury car with all the bells and whistles (yeah, at least it needs air conditioning).
The option of selling your organs doesn’t give anyone a positive feeling. So, that leaves us with just one, or better yet one of these monthly saving schemes offered with a life insurance policy. The idea is to give you an income each month, keeping you secure in your old age.
But many factors make it complicated to understand. So today I am here to tell you everything that you need to know about this scheme from the word go.
Monthly Saving Schemes – The Basics
Monthly Income Schemes are a type of investment plan that is intended for conventional risk-averse investors and beneficiaries. Those who desire to generate an alternative source of regular monthly earnings will find this type of investment quite useful as it serves as a regular source of income as well as acts as a saving plan.
The income produced through Monthly Income Schemes is mostly in the form of dividends and interest. However, a monthly income scheme differs from other market-reliant investment options; it offers returns that are administered by the profits generated.
Like a debt option, the majority of the capital is placed in debt funds, but it also includes stock options to generate returns whenever feasible with equity exposure.
Types of Monthly Income Schemes Available in India
As a means for monthly income, there are two types of investments that can be categorized as most suitable. These investment schemes offer possibilities to receive dividends and stimulate wealth creation. The two types are:
Dividend Schemes
These plans generate profits in the form of dividends, which are paid to investors tax-free. They are generated when the fund is increasing its value by investing in the financial market and earning a profit and sharing a percentage of it with you.
Growth Schemes
With this kind of investment program, your monthly interest income accumulates month after month, and over time this accumulation helps your savings grow into a much larger sum, hence the name growth-oriented monthly saving schemes.
The Best Features of Monthly Saving Schemes
No Limits Applied
The monthly income scheme is versatile and less restrictive than other investment methods. It can be invested in by people of any age and financial status. It allows investors to choose how much they wish to invest when they want to invest.
Open-Ended Features
An investment in a monthly Income Scheme is an excellent idea for you to make money monthly by saving a small amount for investment. There is no processing cost or entry load involved in accessing this scheme, and the exit load is less than 1% of the total investment sum.
High Liquidity
A Monthly Investment Scheme (MIS) is more liquid when associated with many similar schemes. There are no lock-in periods applicable to the investment and the capital can be withdrawn any time the investor wants, to meet an unexpected crisis.
Decent Returns
I invest in Monthly Investment Schemes every month because they provide a more reliable source of income than Post Office Monthly Income Schemes and fixed deposits. The returns are comparatively better than other investment options available in the market.
Guaranteed Income
Even if market fluctuations cause the size of your monthly income to change a little, you’re guaranteed to earn a fairly high return on your investment every month through monthly income schemes. That way, you can make sure you have access to funds whenever you need them.
Minimal Risk Involved
Monthly Investment Schemes have a lower risk factor than other investments. The capital is invested in low-risk securities like fixed-income instruments, preferred shares, and dividend stocks. Therefore, your principal capital is kept safe with monthly income schemes.
Managed By Professionals
Your monthly investment schemes are handled by fund managers who know the ins and outs of the market and keep a close eye on it. They know when to sell as well as when and how much to invest. You can enjoy a hassle-free investment experience without any learning curve involved.
Savings on Taxes
A good monthly income scheme offers tax savings at each step of the investment. Three stages of tax savings are available –investment, accrued interest or growth, and withdrawal, where you have the scope of saving money on taxes with these plans.
Consistent Source of Money
When you want to start drawing an income from the sum you have invested, the income must remain steady. Fixed-income securities are a good choice because they provide a steady stream of income.
Long-Term Benefits
If you are looking for a long-term source of income, you should invest in one of the many monthly income plans available from life insurance companies. Most of these plans offer 10-year to lifetime income options that will allow you to accumulate for a longer period.
Conclusion
A life insurance policy can be a lucrative investment for your family in the event of your passing. The monthly income offered by some policies makes it possible to safeguard your family’s well-being for years to come. It’s a good idea to give life insurance some thought, and conduct some research into the topic to gather more information and make an informed decision.
