Many NRIs still harbour aspirations to be a part of the India growth story. This inclination is strengthened by the country’s resilient growth amid a global economic slowdown.
India also fosters a conducive environment for industrial development with robust FDI attraction to its credit. As a result, NRIs are increasingly considering India as a prime destination for investing, aiming at accruing profits from an early age and subsequently retiring in comfort.
Also, NRI parents with young kids actively explore investment options in India to secure the financial future of their children.
Dilemma for NRIs
However, investing in India comes with a bit of a dilemma for NRIs. Navigating the investment landscape requires careful consideration. Nevertheless, the substantial growth prospects outweigh the complexities.
India offers NRIs a diverse array of investment opportunities, allowing them to tailor their portfolios to their risk tolerance.
Creating a robust portfolio necessitates a balanced ratio of risk and returns which is offered by insurance-cum-investment products. The products, combining life cover and investment elements, safeguard dependents while generating wealth through returns. The flexibility and customisation options enable NRIs to construct a personalised investment strategy. Here are the unique features of the plans:
Investing in ULIPs
Unit Linked Insurance Plans (ULIPs) provide wealth accumulation with the protection of insurance, proving to be a versatile investment option. Investors can diversify funds between debt and equity, benefitting from market-linked returns that have historically reaped as high as 12-15%.
ULIPs also offer flexibility of fund selection for capital which eases financial planning. NRIs enjoy tax benefits on premium up to ₹2.5 lakh and tax-free maturity proceeds, making them more tax-efficient than avenues such as mutual funds.
Guaranteed plans
Guaranteed plans ensure policyholders absolute security through fixed and stable returns, even in volatile market conditions. With fixed return rates reaching up to 7.5% in new-age plans, the policies offer a steady income stream even in a fluctuating market. Tailored for those averse to risk, these plans also serve as an ideal safety net for retirement planning. Choosing payout frequency aligns with your individual financial needs.
Investing in the plans is crucial considering the diminishing returns across asset classes.
As India’s pursuit of becoming a developed nation gets closer to reality, return rates are likely to slide further. So, timing is important
Security, growth
After considering guaranteed and market-linked plans, you might be looking to strike a balance between the two.
Capital Guarantee Plans help you find this balance by combining guaranteed returns with a potential market-driven growth.
Allocating a portion to guaranteed return products ensures 100% capital protection, while the remainder is allocated towards market-related gains.
This guarantees security and returns, preserving the initial capital. Tax benefits and exemptions enhance the appeal of the plans for NRIs.
Retirement planning
Annuity Plans offer a dependable solution for NRIs nearing retirement, providing a fixed monthly income for life. This ensures financial security with flexibility in choosing pay-out frequencies. Predictability in these plans eliminates concerns about outliving savings. Joint annuity plans extend financial support to spouses.
Child plans
Considering you can invest for your child as early as 90 days from birth, child plans ensure long-term benefits with higher returns.
A key feature is the waiver of premium optional add-on, which provides financial security even in policyholder’s absence. In the unfortunate event of the policyholder’s death, the policy continues, and the child receives maturity amount to fulfil their goals.
The plans also offer tax benefits under Section 80C which makes them a strategic choice for prudent financial planning.
Diversifying the investment portfolio is crucial for NRIs to build a substantial corpus.
These options, offering security, stability, and growth potential, facilitate navigating the intricate world of investments while achieving long-term financial goals.
(The writer is Head, Investments, Policybazaar.com)