It’s dreadful when we experience a significant decrease in income due to unforeseen circumstances like Covid-19 and do not have an emergency corpus to cover our unforeseen expenses. Through careful planning, those who missed the opportunity to develop an emergency corpus with different types of life insurance plans may be able to do so in the months to come.

In uncertain times, having an emergency plan is essential, and you might live worry-free if you have one. Many investors lose focus due to the allure of larger returns on stock and fail to create an emergency fund for themselves. An emergency fund might take many different forms, such as adequate savings account deposits or a unit-linked insurance plan that permits early withdrawals in an emergency. Make sure the source, whatever it may be, is reachable in a day or two to assist in any emergency, should you have a sudden drop in revenues as a result of disruptions caused by a market shutdown, a natural disaster, etc. Such an emergency fund can be used to cover significant costs like children’s education, an equalized monthly installment, or even regular expenses.

For your family’s financial future to be secure, term and health insurance are essential. In addition to providing financial protection, various types of life insurance policies are a wise strategy to increase wealth. There are a number of programs that can assist in meeting both insurance and savings demands, even though investment choices like equity and mutual funds play a significant role in the long-term generation of wealth.

  1. Unit-Linked Insurance Plans (ULIPs)

ULIPs combine life insurance and investing since the premium you pay is split between the insurance coverage and the investment strategy you choose when you bought the policy. ULIPs allow you the ability to choose between equity, debt, and hybrid fund alternatives based on your circumstances. Even though the plan’s returns are market-linked, you can choose to swap between funds as needed. Additionally, after a specific lock-in time, programs like the Invest 4G allow you to make partial withdrawals.

  1. Plans for endowment

If you don’t like taking risks, you could wish to put money into endowment programs to increase your wealth. In various types of life insurance plans, we also have plans for long-term savings that include life insurance called endowments. On maturity, the policy provides for withdrawals in either a lump payment or monthly installments. The lump sum benefit from the policy can also be utilized for financial goals like children’s education, their marriage, etc. if the insured lives past the policy’s expiration date.

  1. Plans with a guaranteed return

A fantastic technique to assure guaranteed returns at policy maturity is through guaranteed savings programs. Many of these plans have a bonus option, which adds a certain bonus to the policy’s assured total.

The life insurance component of these different types of life insurance plans makes them a wonderful alternative for safety together with wealth creation, even though the returns might not be as high as pure investment plans.