Fixed Deposit vs Life Insurance – What is Best for you
If you think about it, there are various insurance and financial products that the market has in store for you. Investing in Fixed deposits - different types of FDs or the other ventures will actually help you to enjoy higher return on your chosen investments. Much like fixed deposits, you have Life Insurance plans, which are also considered to be the best investment products in the market.
Even though life insurance is considered to be a part of insurance plan, most people will think about it as investment policy. Then you have the fixed deposit on the other hand, which is solely an investment product. Here, you get the chance to invest in multiple tenures. However, both these sections will serve you multiple needs.
Focusing on the types of life insurances:
Before you proceed further, let’s talk a bit more about the Life Insurance - different types of life insurance policies. Some of the major ones will be:
- Term insurance plans
- Unit Linked insurance plans
- LIC Endowment Plan
- Moneyback policy
- Whole life insurance
- Group life insurance
- Child Insurance plans
- LIC Retirement Plan
Types of fixed deposits:
Once you have settled for the life insurance types, the same goes with the fixed deposits as well. Here, the types that will attract you the most are listed below:
- Regular FD
- Cumulative FD
- Non-cumulative FD
- Tax-saving FD
The major differences for you:
The first question that pops up in your mind is what about the major differences - Which is Best for you? For that, understanding certain points is significant.
- Tenure: For FD, it will be somewhat around 7 days to 10 years. And for the life insurance it will be a minimum of 10 years and will build up from there.
- Returns: FD will have fixed interest rate and for life insurance, it solely depends on the market at that current moment.
- Tax benefits: FD might not have any tax benefits to it, but there will be some for the life insurance plans.
- Withdrawal: In terms of FD, you can opt for premature withdrawal. For the life insurance, withdrawal system depends on the life insurance you have chosen to go with.
- Loans: You can get loans through your FD and the same rule is applicable for the life insurance plans.
Which one is actually the best?
If you think about it, fixed deposit seems to be always better to invest in as it is designed for saving purposes. If you plan to save for the future, fixed deposit is your goal to opt for. But, you might want to catch up with LIC Agent Delhi to learn more about the differences between life insurance and fixed deposit, for that solid plan to use.
- Fixed deposit is what you call as an investment product but the life insurance will be an insurance item. Investing in anything can help you save for the future, but insurance is what you need as risk protection and to protect your family when you are not there.
- It is true that FD presents fixed ROI and you will learn about it from the very beginning of your deposit plan. But, if you are planning to invest in life insurance, it will be solely depending on market risk. The fund value that you will get over here will be affected by present market conditions.
- FD is always best suitable for short and medium term investments. But if you are aiming for long term investment plans, then you better give LIC Agent In Gurgaon a call. You can easily invest for periods as low as 7 days in FD. But for life insurance, it has to be a minimum of 10 years.
- FD will help you to enjoy the value of savings in life. But, insurance plans are mostly purchased because of fear and caring that your near ones might face some risks in the upcoming future.
- In bank FD, you can invest minimum amount of 1000 rupees. But, in terms of life insurance, the premium is different depending on the person’s policy term, age, and gender and payment condition.
- You can withdraw FD and life insurance as well, as mentioned by LIC Agent In Noida . In order to withdraw the FD, you have to send a notification to concerned bank. But, in terms of life insurances, you have a lock in period of 3 and 5 years, which will be applicable to regular life insurance plans and ULIP plans, respectively.
FAQs Related queries on life insurance or fixed deposit:
Can you take loan against FD?
That is one major point, which makes FD even more popular than the insurance plans. Yes, you have every right to take loans against FD.
What will be the basic difference between life insurance and FD?
Life insurance is more like a risk coverage plan so that even if someone gets hurt later, their medical bills will get covered. On the other hand, you have fixed deposit, which is one investment product to help you save in future.
What about the tax benefits by procuring life insurance?
With life insurance, you can procure tax benefits under 80D and 80C of the Indian Income Tax 1961. For that, you need to purchase the best life insurance policies.
It is possible to withdraw money from FD during emergencies?
You can easily withdraw money in terms of emergencies when you are getting it from FD. All you have to do it let your bank know about it beforehand.