Financial Planning For Middle Class Families

Posted in Insurance Blogs By Bajaj Markets-
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The middle-class society in India constitutes a large part of our economy. Considered an essential segment of the growth of a country, the middle-class is expanding. This stratum of the Indian society is expected to overtake the United States’ soon and emerge as the world’s second-largest middle society.

The earning members of a middle-class family aim to provide financial security for their family members. Most families enjoy the convenience of a four-wheeler, live in furnished complexes and rarely splurge on materialistic things.

Be it working towards a short-term goal or focusing on achieving long-term goals like buying a home, financial planning is crucial. The income of middle-class families is growing consistently but the avenues of investment remain the same. If you are a breadwinner and are looking forward to contributing to the financial wellbeing of your family, explained below are two tips to help you plan your finances in a better manner.

  • Select the right investment

An important point to keep in mind when creating a financial portfolio is to establish the right goals. Whether you want to save for the higher education of your child or buy a bigger car in the next five years, you need to set correct financial goals. Doing this will give you an estimate of the amount of funds that you need to start saving. It is the first step towards financial planning. Once you set the goals, you need to choose an investment product that will help you achieve the goals. For this purpose, long-term financial products like Unit-Linked Insurance Plans are gaining prominence today.

ULIP soffer a combination of investment and insurance with tax benefits. With such a plan, you get life insurance coverage and can earn high ULIP returns towards the end of the tenure. The premium paid towards a ULIP is eligible for a tax benefit according to Section 80C of the Income Tax Act, 1961. Additionally, the ULIP returns received during maturity are exempt from tax as per Section 10(10) of the same Act.

  • Consider the best long-term investment option

You need to invest according to your financial goals and ULIP plans offer the best long-term investment option. It has a minimum investment tenure of five years, which will make you a disciplined investor.

Your money will be invested in different asset classes such as equity funds, debt funds or balanced funds based on your risk appetite. Moreover, you can transfer your investments from equity funds to debt funds during tough market conditions. This will help earn stable ULIP returns even when the market is volatile. Also, you need to note that ULIP returns are based on market performance. As the market grows, the value of the fund will also grow.

Investing in a ULIP has several benefits such as tax savings, flexibility in choosing the fund, high return rates and a lock-in period of five years. It is an ideal investment option for middle-class families due to low risk and good flexibility.

Are you looking to invest in a suitable ULIP to secure your finances and transform your life goals into a reality? Get in touch with us and benefit from life cover, favourable returns on investment and tax-savings under sections 80C and 10(10D). What’s more? You can take advantage of free fund switches, no charge during fund allocation, no return of mortality charges and a wide range of investment portfolio strategies.

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