Most of the investors are seeking more guaranteed return plans from the life insurers. It would serve to be an alternative to fixed bank deposits. Most of the existing plans are non-participating plans. This means that the owners of the policies are not entitled to the benefits. These plans might be looking attractive on the outside. As the age of the investor increases so will be mortality charges and very low returns.
The major reason why these plans are popular is because of the tax-free return when the term matures. Sometimes it is difficult for the investors to understand and calculate the real returns. Loans can assist people in various ways like help them improve the quality of their life.
Whoever opts for these products have better chances of getting returns that the FDs. They will have a longer lock-in period, tax benefits, and high returns. It is necessary to calculate the IRR and make sure that you have provided liquidity