Want to invest in insurance plan? remember these points

As 2017 nears the end, most of us will be planning to park our investments in some schemes to save taxes. If you are looking for investing in insurance plans which guarantees exemption, it would be wise to study other options too prior to taking a decision.
 
According to BankBazaar, if you have a surplus fund, you can divide it into term insurance and other investment avenues. Here's a list of details to remember.
 
Start with a term plan
 
If you are opting insurance for the first time, then term plans come best for you.
 
In term plans, you get coverage for a definite period of time and if the policyholder expires during that time period, the beneficiary or nominee as stated in the document will get the full sum assured.
 
They also have low premium, and by buying a term insurance plan, customers are also able to get good tax benefits.
 
Under section 80C of the Income Tax Act, 1961,  a term insurance policyholder can avail tax deductions of up to Rs 1.5 lakhs.
 
Return-oriented insurance plans
 
If an insurance policy is already existing under your name by your parents, you can avail for an investment-linked insurance plan that promises you good returns in the future.
 
Generally, it comes as an endowment plan available in the market as ULIPs or pension plans.
 
There are lock-in period for most endowment plans, which can vary between 10 to 40 years.
 
Bank Bazaar states that it is advisable to check death benefits in such schemes. This is necessary especially if the lock-in period is long and you suspect that you may not survive till then.
 
Such scheme is considered best for people under higher tax brackets. They can opt for these plans on an annual premium basis and get maximum benefits.
 
The seasoned investor
 
After fetching a good insurance plan, you can also invest your fund in some Mutual Fund scheme with the remaining cash that you are left with, especially if you seek quicker and higher returns.
 
This scheme is best for those rooting for inflation bearing returns, due to easy liquidity and tax-efficiency.
 
Mutual fund scheme is a pool of savings contributed by multiple investors. The term ‘mutual’ fund means that all risks, rewards, gains or losses pertaining to, or arising from the investments made out of this savings pool are shared by all investors in proportion to their contributions.
 
There are wide-range of mutual funds in India like - equity, debt, money market, hybrid or balanced, sector-related, index funds, tax-savings fund and lastly fund of funds.
 
If you are planning to get yourself an insurance plan, remember that there are different plans serving different purposes. Always remember to have a thorough check before opting them.