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Wealth Creation Plans

A wealth creation plan offers to pay the fund value at the end of the policy term. In the unfortunate time of death during the policy term, the family receives the lump sum amount, known as Sum Assured. Wealth Plan ensures wealth creation for both long-term and short-term. Thus, Wealth Insurance combines the benefits of both protection and savings into a single plan.

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Wealth Creation Plans

Wealth Creation Plan
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What is Wealth Creation?

Wealth creation is a process to increase and accumulate your earnings. You can generate wealth through value additions like business activity or financial instruments. Saving and investment plans are an inseparable part of the wealth creation process.

Savings ensure that your earnings are not lost quickly and investments will ensure that it remains safe over a long time. Investing also safeguards your savings from taxes and helps in further wealth creation from it.

What is a Wealth Creation Plan?

A wealth creation plan could be an investment instrument or an elaborate investment plan which focuses on maximising your saved money. Ideally, a wealth creation plan helps you park your regular savings and grows them to build a large corpus over time.

You can create a wealth plan using direct stock and bond market investments. However, using one of the wealth plans to automate your savings and grow your wealth is an easier way to build wealth.

The wealth creation plans in India are available for both online and offline investment. Some of the popular wealth creation plans include

a) Unit Linked Insurance Plans (ULIPs)
b) Equity Linked Saving Schemes (ELSS)
c) Equity and Hybrid Mutual Funds
d) New/National Pension Scheme (NPS)

Why Choose a Wealth Insurance Plan?

Life insurance companies including Canara HSBC Life Insurance offer wealth creation plans. These long-term investment plans are also referred to as wealth insurance plans. Insurance is the unique feature of these wealth creation plans.

Here’s why you should prefer a wealth insurance plan:

a) Flexible investment options
b) Choose your investment tenure
c) Automate your investments
d) Invest in multiple assets under one plan
e) Enjoy good liquidity with partial withdrawal options
f) Manage your asset portfolio automatically with market performance
g) Protect the financial goal with life insurance cover
h) Premium protection option for important family goals like child’s higher education and marriage
i) Active strategies to protect your wealth from market volatility when you are close to maturity
j) Bonus additions for long-term investors
k) Tax saving and tax-free maturity values

Benefits of Buying a Wealth Creation Plan

Investing in a wealth plan has several benefits for you. Following are the most prominent benefits of buying a wealth plan:

a) Turn your savings into investment faster
b) Professional management of funds
c) Invest in well-diversified portfolios
d) Reduce your tax outflow in the year of investment
e) Build tax-free wealth in the long-term
f) Meet multiple financial goals with the same saving and investment plan
g) Safeguard your market returns with automatic debt allocation/transfer
h) Enjoy additional portfolio growth with bonuses
i) Safeguard family’s important financial needs/goals
j) Withdraw tax-free regular income after retirement
k) Plan for the legacy you will leave for the next generation and grandchildren

How does a Life Insurance Policy help in Wealth Creation?

Life insurance fundamentally provides leverage, in a sense that you pay a relatively small amount of money to the insurance company in the form of a premium and in return, the insurance company will provide a guaranteed payout of a relatively large sum of money upon the occurrence of an unfortunate event, basically passing on wealth to your loved ones. So, here is how a comprehensive life insurance policy can help you in wealth creation:

Guaranteed returns Loyalty Rewards & Boosters Flexible Fund Allocation
Mostly with ULIPs and saving plans you can gain guaranteed returns on your investment. So, you get the best of both worlds – insurance and savings. Staying invested for longer durations can boost your savings via additional units allocation through loyalty additions and wealth boosters. The great thing about plans like Invest 4G is that you can choose to switch funds to generate long term capital appreciation through investments.
Safety switch Protection for your Money Tax Benefits
Many life insurance plans offers you the option to switch your money to low risk fund as your policy nears maturity, ensuring you receive balanced wealth at maturity. The benefit your family would receive is not subject to market losses, like mutual funds and similar instruments that go down with a tank in the stock market. ULIPs can offer dual benefits –rebate of up to 1.5 lakhs under Section 80C and tax exemptions on the maturity proceeds under section 10(10D) of Income Tax Act, 1961.

Who should Buy a Wealth Creation Plan?

You should invest in a wealth creation plan if you have sufficient regular savings which you can park for a long time. Remember that your money should first ensure long-term financial safety for your dependents. After that, it should create a pool for you to manage financial emergencies.

Finally, you can now invest in a wealth creation plan if you are:

a) Salaried
b) Self-employed / Business Owner
c) Investing for long-term financial goals
d) Looking to grow your money steadily
e) Looking for professional management of your wealth
f) Investing in your child’s important life goals
g) Aiming to build a huge corpus for your retirement
h) Looking to have a tax-free pension income after retirement

Wealth creation plans are long-term investments. These plans will give you the option to invest aggressively in pure equity funds or safely with fixed income funds. Thus, wealth plans are useful for both safe and aggressive investors.

Additionally, the wealth insurance plans also allow you to protect your family’s goals. Thus, it also fulfils the financial safety needs of your family.

Finally, online wealth plans like Invest 4G from Canara HSBC Life Insurance offer plan tenure up to 99 years of age. Meaning, you can use the same plan to save for your retirement corpus, pension and legacy goals.

How can you Ensure Maximize Returns with Life Insurance Plan?

Besides providing a life cover, plans like Invest 4G can help you grow your wealth and achieve your life goals with the help of unit-linked returns. All you got to do is choose the right funds. Here’s how –

1. Ensure you invest the right amount in equity and debt investments

Having a balance between your investments is important to gain better returns; nor would being too safe or being too adventurous help. There’s a typical investment formula that experts suggest – Take 100% as your total investment and minus your age. Say, you are 30, then 100-30=70, therefore you should invest 70% of your investment value in equities and the remaining in debt.

2. Make fund selection based on your current investment portfolio

So, if most of your investments are in safer areas like bank deposits, you can choose to invest in higher equity funds to balance your investment and get better returns, also vice-versa.

3. Figure how much time you have and the magnitude of your investment goal

In case you wish to invest for your child’s higher education or buying a house, you may want to invest higher in equities as you have more time in hand. The longer you invest for, more is the boost you can expect on your returns.

How to Grow and Save Wealth for Future Goals with a Wealth Plan?

Identify the future needs Start as early as you can Have adequate insurance
When saving, the first step should be to identify a rough range of finances that may be required basis your aspirations. Create a broad plan and keep space for miscellaneous expenses that may pop-up. Saving is a habit that must be inculcated as early as possible. Also, with the rising inflation and expenses, you need to start at an early stage, considering what will be the rise until your goal is achieved. While we hope everything ends well, there can be unwelcomed surprises by life. Plans with an added life insurance benefit can ensure your family receives your savings and can reap the long-term benefits of the plan.

Wealth Creation Plans



Flexibility to switch funds

Option for partial withdrawals

8 Investment funds and 4 portfolio management strategies

Loyalty additions and wealth booster

Smart Lifelong Plan


Long term protection

Partial withdrawal

Auto funds rebalancing

Increase/Decrease of sum assured

Tax benefits

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FAQs for Wealth Creation Plan

Depending on the features you selected at the time of buying the wealth plan the following death benefits may be available:

a) Guaranteed sum assured at death, which is usually higher of the following:

  • 10 times your annual premium
  • 105% of total premiums invested or
  • Total Fund Value at the time of claim

b) Guaranteed fixed sum assured upon death but investment part continues till maturity:

  • The insurer pays the guaranteed death benefit amount upon the claim
  • The insurer pays any due premiums in the policy as if you were alive
  • The family will receive the fund value upon maturity

The second option is available if you had opted for premium protection benefits in the wealth plan.

You can choose to manage your portfolio manually instead of applying any automatic strategies. In such a case you can either invest in a fixed ratio or keep switching between equity and debt manually.

However, managing your wealth plan manually could be challenging as you will need to follow all market conditions yourself. You can also opt for a systematic transfer option. This option allows you to choose a fixed percentage of a fund to be transferred to another.

Use the systematic transfer option to safeguard your returns from equity funds or invest in an equity fund with rupee cost averaging.

The premium waiver is a great feature to use while using the wealth plan to save for your child’s future. Premium waiver option will ensure that the planned investments continue even after your untimely demise. The insurer will pay the due premiums on your behalf and ensure the growth of the corpus until maturity.

At maturity, your family members or child will receive the fund value.

Yes, you can surrender the online wealth plan like any other life insurance plan. However, wealth plans have a lock-in period of five years before you can surrender or withdraw money from them. Using a partial withdrawal facility is better than surrendering the plan.

Yes, you can save tax while investing in wealth creation plans if your investment meets the following conditions:

a) Annual investment in the wealth plan is 10% or less of the life cover in the plan
b) Total annual investment in all the wealth plans is lower than Rs 2.5 lakhs

If any of the above conditions are not met, you may lose the tax deduction under sections 80C and 10(10D).

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