I was approached by the sales person for equity linked insurance plan with his specialized marketing skills he made me to believe that the returns would be much higher than the bank deposits where the money would lay idle. But considering the fact that the insurance scheme can be tax saver tool under section 80c I was pleased to put the money in one of the insurance plan.
The plan was to cover a sum of amount 50,000 in case of possible mishap. A premium of 10000 for 3 years which is the lock-in period.
I was also informed that i can retrieve the money after the lock in period. Now my major question is when should I retrieve the money or what could be maximum return or what is guideline to judge if the fund has achieved the desired return.
Of course considering the tax benefits and risk coverage even though i was not too much interested in gaining major benefits but a comparison with term deposit returns will give us a definite picture when or where to gain a good return from the investment.
The below is illustration of Future values of similar investment with compound calculation.
Year Deposit(1year) Deposit(2year) Deposit(3year) Total Return Interest Gained
1 10800 10800
2 11664 10800 22464
3 12597.12 11664 10800 35061.12 5061.12
4 13604.89 12597.12 11664 37866.01 7866.01
5 14693.28 13604.89 12597.12 40895.29 10895.29
6 15868.74 14693.28 13604.89 44166.91 14166.91
7 17138.24 15868.74 14693.28 47700.27 17700.27
8 18509.3 17138.24 15868.74 51516.29 21516.29
9 19990.05 18509.3 17138.24 55637.59 25637.59
10 21589.25 19990.05 18509.3 60088.6 30088.6
So, check out for the returns if the margin looks good and the market performance satisfactory go ahead and reap the benefits(keeping in mind the tax at source).
Happy harvesting!!
With regards
Kannan. G
The plan was to cover a sum of amount 50,000 in case of possible mishap. A premium of 10000 for 3 years which is the lock-in period.
I was also informed that i can retrieve the money after the lock in period. Now my major question is when should I retrieve the money or what could be maximum return or what is guideline to judge if the fund has achieved the desired return.
Of course considering the tax benefits and risk coverage even though i was not too much interested in gaining major benefits but a comparison with term deposit returns will give us a definite picture when or where to gain a good return from the investment.
The below is illustration of Future values of similar investment with compound calculation.
Year Deposit(1year) Deposit(2year) Deposit(3year) Total Return Interest Gained
1 10800 10800
2 11664 10800 22464
3 12597.12 11664 10800 35061.12 5061.12
4 13604.89 12597.12 11664 37866.01 7866.01
5 14693.28 13604.89 12597.12 40895.29 10895.29
6 15868.74 14693.28 13604.89 44166.91 14166.91
7 17138.24 15868.74 14693.28 47700.27 17700.27
8 18509.3 17138.24 15868.74 51516.29 21516.29
9 19990.05 18509.3 17138.24 55637.59 25637.59
10 21589.25 19990.05 18509.3 60088.6 30088.6
So, check out for the returns if the margin looks good and the market performance satisfactory go ahead and reap the benefits(keeping in mind the tax at source).
Happy harvesting!!
With regards
Kannan. G
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