Every year the month of August is a celebration of a beautiful relationship between a brother and a sister during the auspicious occasion of Raksha Bandhan. Brothers promise to be there for the sisters forever and ever, and it is usual to offer them a meaningful gift as a symbol of love and care. We realise that with the on-going pandemic, celebrations may not be as grand as they used to be, and we also realise the need for protection ever since the pandemic struck last year.
Protection plans could assist your sibling in securing his or her financial future when they are most in need. Helping your siblings understand the importance of a protection plan such as term Insurance or a protection plus investment plan like a Unit-linked Insurance Plan (ULIP), might be a good option for this occasion of Raksha Bandhan.
Unit Linked Insurance Plans (ULIP) offer the dual benefit of insurance (life cover) and investment in one single policy. Thus helping you grow your wealth along with protecting your loved one’s future from unexpected times. A ULIP invests the major portion of the premium in different funds (debt, equity or balanced) depending on the risk appetite of the policyholder and a small amount of the premium goes towards an insurance cover. ULIPs are well suited to meet long-term goals like child’s education/marriage, buying a house, retirement planning and more. Further, these plans are a great way to start saving for your future goals in a disciplined manner.
For an earning sibling, he or she can buy and invest in ULIPs because it provides a protection cover as well as it helps to grow her wealth in order to meet his or her child’s future needs like a higher education. Furthermore, a policyholder only has to pay a small amount of money basis their budget each month to save with ULIPs. ULIPs are a good option to get good market linked return over long term.
Understanding Term Plans
Your sibling must be adequately covered if he or she works and contributes to the family’s income. This Raksha Bandhan, you can ensure your siblings financial safety and stability by guiding and introducing him or her to term insurance. A term insurance plan will help your brother or sister secure the family financially. If he or she has any loan like an education loan, in case an unfortunate event occurs, the claim money can help your parents pay off the loan. If he or she has children, the term policy will ensure that your nieces and nephews’ schooling is not affected in your sibling’s absence.
The amount of money one should invest is determined by the financial needs and situation, insurance type, policy duration, goals, timelines, and risk tolerance. You can consult a financial expert if necessary, research online and explore more options to safeguard your sibling’s security and financial needs.