ULIPs and mutual funds are two popular yet distinct investment avenues, each coming with its unique set of benefits and drawbacks. Know which one is better for your individual needs and preferences.
Invest smart today for a better tomorrow
Making carefully-planned investment decisions can prove beneficial in the long term, as such financial management can help you accumulate sufficient funds to fulfill your dreams. For such desirable returns on investments, having proper investment planning is the key. However, with a plethora of choices in the UAE, one may often find it difficult to select a specific investment plan.
To help you find the best investment options in UAE that fulfils your financial requirements without straining your finances, we will discuss what is investment plan in UAE, what are its benefits, and how to buy the best investment plans in Dubai in the article below.
Investment planning refers to the procedure of determining your financial goals and fulfilling them in the desired duration by developing a plan. This procedure starts with the identification of your financial objectives and goals, after which you can design a plan to meet these goals with the available resources.
As mentioned earlier, one can find innumerable investment options available in the UAE. The most popular ones, however, are related to bonds, equities, property, and cash. As per the availability of the funds and your goals, you can invest in any of these investment instruments.
The following are the major types of investment plans available in UAE:
Also referred to as insurance-cum-saving and investment plans, these are generally life insurance plans that also help you generate profit over a certain period. In an endowment plan, a part of your premium adds to your life insurance policy while the other part can be utilised for building a retirement fund or savings. This saved amount can be redeemed after the expiry of your insurance policy.
Another excellent tool for investment in UAE is the Unit Linked Insurance Plan (ULIP). The only major difference between ULIP and other insurance-cum-savings plans is that you will be required to pre-decide on a lump-sum amount for ULIPs. Otherwise, a portion of your premium is taken as the policy premium, while the remaining part is used to build savings for your future UAE investments.
While several employers may run pension plans as employee-benefit plans, you can also find the leading financial institutions providing such plans. In the former type of plan, the employer may also contribute to such pension plans for their employees. However, one may also find the top banks and institutions providing similar plans, with some of them combining these plans with life insurance. In any of the available types of this plan, one can expect a monthly pension after their retirement, although the amount may be fixed or variable as per the provider and the selected plan.
Mutual funds are among the most popular investment options in UAE as they allow investors to invest safely while also generating great returns over a fixed amount of time. Mutual funds are managed by experienced fund managers, with the investments made by collecting funds from many investors.
As a consequence, one can reap the benefits of the stock market in a safer way. Nevertheless, it is essential to remember that mutual funds still carry a certain risk.
Given below are the most remarkable advantages of investment planning:
Perhaps the biggest advantage of investment planning is that it helps in ensuring financial security for the investor’s family. Thus, if an individual having an investment plan faces adverse situations like unemployment, critical illness, or demise, their family members will still be secured by the investment.
Investment plans in Dubai allow you to manage your income and finances efficiently. Instead of engaging in unnecessary expenses, you will be able to manage your income more effectively, cut irrelevant expenditures, and create savings for the future.
As investment planning would require you to comprehend your financial situation practically, you would also develop an enhanced financial understanding with such plans. This is directly beneficial to you, as you can now examine your expenditures and requirements more objectively.
Besides emergencies, one may also require funds for future plans related to children’s education, marriage, or travel plans. By investing in the right investment plans in UAE, you can generate a good amount of wealth that can be utilised to fulfill all such requirements.
The funds that you generate through investment planning can be used to improve your living standards. Moreover, if you keep investing for a long duration, you will be able to continue your living standards even after retirement without any major compromise.
Given below are the things that you must check before purchasing an investment plan in UAE:
Here are the most important aspects to consider before planning your investment:
Before searching and comparing plans, you should calculate the number of dependents that you wish to cover under your Dubai investment plan like your parents, spouse, children, and so forth.
To make a wise investment choice, it is necessary to identify your financial goals as this will give you an idea of the funds that you will need to meet a certain goal (whether higher education, children's marriage, buying a car or property, and so on).
Keeping this aspect in mind can prove helpful in identifying the amount of investment that you can make without defaulting on current loans, debts, and others. Moreover, if you plan to avail of any debt in the future for a specific requirement, even that liability must be considered in the selection process of a plan.
In case you opt for an investment plan with an insurance component, you should make sure that the assured sum is adequate for your requirements. Otherwise, if you find the sum assured insufficient, you can opt for an investment plan without the insurance part and purchase a plan related to the latter separately.
One should make sure that the premium or the amount that must be invested currently fits their budget without requiring them to compromise their lifestyle. You can always utilise an online premium calculator for the same and determine the suitable amount as per their income, age, and other factors.
Listed below are some points based on which you can compare different investment Plan in UAE:
Applicable for life insurance plans like endowment or ULIPs, riders can be considered add-ons that enhance the coverage offered by a plan. With most of these riders available at nominal prices, you can include one in your plan and receive additional benefits.
Listed below are the major types of riders:
While the eligibility criteria will differ for each plan, provider, and the applicant, the following are the general criteria as followed for most investment plans in UAE:
The following are the documents that you may require when seeking to buy the top investment plan in UAE:
Buying an investment plan online in UAE is quite easy, with most of the top firms for the same offering seamless online application procedures. Given below are the steps that you need to perform to buy an investment plan in Dubai online:
An investment plan in Dubai is one of the most important things to have in the UAE if you seek financial stability in the long run. With numerous options available for the same, buying the best investment plan in the UAE has become fairly straightforward. Simply be aware of your requirements and conduct thorough research (while also understanding the risks involved) to get the most suitable investment plan for yourself.