Generally, mothers tend to compromise on their expenses for a better future for their kids and end up sacrificing many things along the way. Whether your mom is a working professional or a homemaker, making long term investments plans will help in achieving financial security. But where to invest money is the important question.
So, let’s have a look at the below investment options that will offer financial safety in the long run.
Health insurance
Your mother’s health is your top priority, if she ever needs medical treatment, it should be a comforting, nurturing experience, without any concerns about affordability. Having health insurance makes that possible. However, health insurance is something to be bought early in life. The earlier the insurance products are bought the cheaper they are. Having health insurance can be helpful in times of need, you can pay up hospital bills with ease and take care of unexpected high medical costs. But before applying make sure you do your research on the company and understand the policy and how the claim process works so that you do not lose time or effort following up on a claim.
Pension plans
A pension plan is where a sum of money is added during an employee’s employment years and from which payments are drawn to support the person’s retirement from work in the form of periodic payments. This plan will help secure the retirement years by providing a monthly income. The payment for such pension plans can be done through a lump sum or monthly payments. Another advantage is that certain pension products offer immediate pension support on lump-sum payment.
ULIPs
ULIP is a type of insurance and tax saving investment option that provides wealth creation also offering life cover. In this, the insurance company puts a portion of your investment towards life insurance and rest into a fund that is based on equity or debt or both and matches with your long-term goals. You can make an investment under your name and the ULIP will offer security that your family can fall back on in case of emergencies like the untimely death of the taxpayer, etc. ULIPs have a lock-in period of 5 years. However, if a ULIP is surrendered in the first three years, the insurance cover would end immediately.
Retirement funds
These funds are also known as pension funds; this is an investment option that allows an individual to save a certain portion of their income for their retirement. These funds offer a regular source of finance after an individual retires; a retiree receives annuity on their investment until their demise. Pension funds are invested on the investor’s behalf, and the income generated from that investment is contributed as the interest provided on the pool of funds.
To fund the retirement years of your mother, you can start creating a corpus of fund overtime and invest it for over a 10-year horizon. You can invest it in balanced mutual funds which are considered as a safe investment instrument that will help maintain an equilibrium between the safeties of capital, return and capital appreciation.
Sovereign gold bonds
Sovereign gold bonds (SGB) are substitutes for holding physical gold. In this bond, your mother would be allowed to earn returns through capital appreciation as the price of gold changes. The SGB is issued by the Reserve bank of India (RBI) on behalf of the government. The risks and costs of the storage of gold are eliminated. While investing you will be assured of the market value of gold at the time of maturity and periodical interest. Moreover, the SGB bears interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment.