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Smartest investment and life plans in UAE
From NFTs to stocks, the investment market is all the rage now more than ever. Undoubtedly, investing your saved up money is one of the best ways to build up capital and save up for a better and safer future – yours as well as your family’s. Moreover, investing your money now while sacrificing little with your present needs can turn out to be one of the best decisions in your life when you retrospect. However, understanding and executing investment planning can, of course, be tricky. From risk evaluation to timeline study, there is a lot to figure out since you will be putting your hard-earned money on the line, and you surely don’t want to lose it all. Yet, most independent investment options in UAE out there involve higher levels of risk and are quite venturesome. This chancy situation gives a big room for adequate planning and brings in the existence of investment plans offered by insurance companies in the UAE. Relatively low-risk and much securer as compared to other investment options, UAE investment plans are the perfect fit for folks who are trying to find some secure, moderate to low-risk investment options in UAE. Wonder what exactly do you need to know about the hyped-up investment? Come-on! Let’s cover everything you need to know about investment plans.
Investment plans are a type of investment tool offered mainly by insurance and investment companies in UAE. These plans are one of the simplest ways to build your wealth and corpus over time without undertaking a lot of risks. The prime concept of investment plans is somewhat similar to that of insurance plans. Expanding further, you pay regular monthly or yearly premiums for both.
The only difference is that you get death benefits with insurance plans, and with investment plans, you get returns. In addition, some plans offered by insurance and investment companies in the UAE are also a culmination of insurance and investment – the premium you pay is divided into two parts here, one for life insurance and the other for UAE investments. The good part here is that you hardly have to compromise over the investment plan as you get a myriad of investment plans in UAE to choose from.
Investment plans offered by insurance investment companies in the UAE can be divided into a few different types. Given below are all the different types of investment plans you can find in the UAE:
Endowment plans are also known as insurance-cum-saving and investment plans. In addition to being a traditional life insurance plan, endowment plans also work as profit yearning plans. Under an endownment plan, you pay a regular premium – one part of it goes to building your life insurance benefit, and the other can be used to build a savings or retirement amount. Also, you should know that the saved up amount can be redeemed once the policy term expires. Along with that, the good thing about endowment plans is that they allow you to have a corpus at the end of the tenure even if the life insurance death benefit expires. In addition to that, endowment plans are also a very safe investment option in UAE – perfect for people who cannot take colossal risks. In essence, it is the perfect investment in UAEand savings option for goal-based investments to build retirement corpus and to support dependents in the future.
Offering room for flexibility with investment, Unit-Linked Insurance Plans, widely known as ULIPs, are another type of investment-cum-savings plan. However, when you buy a unit-linked insurance plan, you have to commit a pre-decided lump sum amount. Additionally, when you pay your premium for these plans, one part goes as the premium of the life insurance cover, and the other is used to build a corpus for UAE investment purposes. Over and above this benefit, you have complete freedom to choose your UAE investment options and change investment funds during the plan's tenure. Additionally, you can switch between investment options as well. Since Unit-linked insurance plans allow you access to high-return investment options in UAE, they also possess a higher risk as compared to endowment plans.
Traditionally, pension plans used to be employee-benefit plans run by employers. Adding to that, employers used to make a regular contribution to a pool of money. This corpus was then used to pay the employees a regular sum, better known as a pension. However, in today’s scenario, employer-funded pension plans are almost non-existent. Now, retirement or pension plans are funds built by individuals themselves. For example, you put a certain amount of money aside as a retirement fund which is paid back in small parts as a pension when you retire. Overall, you will find several financial institutions, insurance companies, and investment companies in UAE that offer a pension plan for retirement and pension plans.
One of the most popular and reliable forms of medium-term investments not just in the UAE but all across the globe are mutual funds that are created by pooled capital collected from several investors with the objective of growing their savings. Mutual funds are managed by professional fund managers that specialize in investment banking. The pooled capital is invested in different market-based securities that yield returns are provided in the form of dividends to the investors.
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The stock market is one of the most lucrative investment options in UAE for investors all across the globe. It refers to the collection of exchanges and markets where buying, selling and trading of shares of publicly-held organizations and firms takes place. The terms stock market and stock exchange are often used interchangeably.
Also often referred to as child insurance plans, these UAE Child investment plans are designed to ensure financial stability for your children. Parents buy the child investment plans for their children, build the corpus and pay a regular premium for the child investment plans. This premium is collected, and then payouts are arranged for every milestone your child achieves. However, some child investment plans also have a payout at maturity. Nevertheless, the payout arrangement can be chosen by parents when they buy the plan – lump sum or periodic. These payment arrangements largely depend on the provider of your plan.
Yet another kind of UAE investment plan that combines insurance and investment benefits is Money-Back Plans. Basically, Money-back plans are Capital guaranteed return investment-cum-insurance plans. Money-Back Plans are a traditional term insurance plan that offers death benefits if the insured person dies within the tenure of the plan. In addition, a money-back insurance plan offers the return at regular pre-decided intervals during the plan's tenure. Along with that, the returns that the insured person receives upon certain intervals are termed as “survival benefits”. While a certain level of liquidity is still present with money back plans, they are also some of the best-guaranteed income investment-cum-insurance plans.
Annuity investment plans are a great investment option in UAE for people who still have at least 10-20 years on hand before they retire. Further, annuity plans are essentially offered by life insurance companies and investment companies in the UAE. Under Annuity Investment Plans, you invest a lump sum amount initially when taking on the plan. Then, the insurance and investment companies in the UAE invest this money in further UAE investment ventures. Expanding further, Annuity plans have a lock-in period during which you cannot take out your money. When the plan matures, the insurance company pays the insured person with the returns generated on their invested sum. However, the payments can be a lump sum or scattered over the years. Penalties may apply if you withdraw your investment before the lock-in period ends.
Annuity plans can be divided into two categories – deferred and immediate annuity investment plans. Deferred annuity investments come with a longer lock-in duration. As the name suggests, immediate annuity plans start paying almost after immediately you invest your money. So, you can choose either of these options depending on your investment needs.
Regarded as one of the safest ways to invest your money, banks and similar financial institutions in the UAE offer fixed deposit accounts. As the name suggests, fixed deposit accounts hold your money for a pre-decided duration, and as our parents always tell us, FD is the safest of the lot. Further, you earn interest on your savings as per the pre-decided rates of the banks. The amount deposited in a fixed deposit account can be withdrawn before the maturity period arrives; however, a penalty may apply. Luckily, the returns are guaranteed with fixed deposit accounts, and they involve no amount of risk.
There are numerous providers in UAE offering investment opportunities, some of them are:
| Provider Name | Investment Opportunities in UAE | |
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| Emirates NBD |
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| ADIB Investment Plan |
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| Rakbank (RAKinvest) |
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| HSBC |
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| ADCB Investment Plan |
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| Mashreq Investment Plans |
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Creates Wealth:
Needless to say, one of the incredible benefits of investing your money into a business asset or venture is creating wealth. It makes sense that the main reason for every investor ever to put their funds into a UAE investment option is to build the value of their assets. However, depending on the level of risk you are ready to take, UAE investments can earn you sky-rocket profits and turn your small triple-digit investment into a much larger figure, and who doesn’t want that?
Keeps You Ahead of Inflation:
The biggest factor of concern when calculating your savings and building a corpus for the future is that investing your money keeps you way ahead of inflation. Moreover, with constant inflation in the picture, living off of your savings after retirement might not turn out to be as smooth as you initially expected. This is why investment holds utmost value, and by turning your savings into a sum much larger, you can stay ahead of inflation smartly as well as effortlessly.
Financial Protections:
Whether you pick safe or risky investment options, your financial interest is always protected. This is because even the safest investment option, like a fixed deposit, earn you a decent profit. Therefore, it goes without saying that building a safe financial future for you and your family is one step closer with a proper UAE investment plan in the picture.
Stress-free Retirement:
Early retirement is surely something almost all of us dream of. But, of course, it is easier said than done. Thus, you must know that building a retirement corpus is much trickier than it sounds. This is major because since our income, as well as inflation, rise significantly over the years, retiring at an early age requires an individual to save a fortune in a relatively short period. However, here’s the catch! Investing your savings in safe yet decent profit yearning options can give you a much-needed nudge here. For example, wise investment can help you build your retirement corpus quicker and more effectively, leading to a comfortable life when you finally stop working and ultimately yield a stress-free retirement.
Safe Financial Growth:
We all know that investment ventures are almost always regarded as high-risk with much higher chances of failure than success. But, the best thing about UAE investment plans is that they offer you a chance to earn decent profits while keeping your hard-earned money safe from unrecoverable losses. Therefore, safe financial growth is one of the enormous benefits of UAE investments plans that you will receive.
Help in Meeting Financial Goals:
Apart from the early and stress-free retirement, an individual has a lot to take care of before retirement. In addition, comfortable retirement is not the only goal of an individual. On the contrary, from your children’s education to financially supporting your family, there is a lot to handle before you retire. Therefore, achieving your financial goals is incredibly important, whether to handle your current responsibility or build a secure future. For this part, worry not as the best investment options in the UAE are precisely designed to help you achieve this financial goal effectively.
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Whenever you think about investing your current savings into an investment venture, you must have a list of objectives before you. This is utterly important as you must know what you want and how much you want it? Once you understand what you need from your investment portfolio, you can decide which investment option in UAE fits your needs the best. Adding to that, every kind of UAE investment venture has its own set of objectives. For example, stock market investment ventures aim to give high returns in a shorter period but with equally high risk.
Let’s take a closer look at some of the objectives of investment plans which may help you decide whether they are the right UAE investment opportunities for you:
Safety and Security:
Investment plans in the UAE help you earn decent levels of profit while keeping your hard-earned money from wearing away over time. Not to mention, outliving your savings can be pretty alarming for anyone who has been working most of their adult life. But on a good note, the UAE investment plans help you in keeping your savings safe from this notion and help you build capital for the future.
Steady Returns and Income:
Most high-yielding investment options in UAE come with a relatively high-risk portfolio as well. However, not every investor can afford to take these risks. On the contrary, investment plans in the UAE offer relatively safe and low-risk UAE investment opportunities. These safe and low-risk investment plans in the UAE point that you get to generate profit without taking on a massive risk of losing your savings. Over and above that, a steady flow of income can be generated with steady returns from the UAE investment plans.
Add to Liquid Assets:
As an investment option in UAE, one of the main objectives of an investment plan in the UAE is to help participants gain a decent amount of profit from their savings. Therefore, corpus building with investment plans in the UAE is a smooth ride if you have your investment planning down with all details and facts in check.
Create Retirement Corpus:
Another critical objective of UAE investment plans is to help investors create a good enough retirement corpus to lead a comfortable life. By the same token, many UAE investment plans are designed to offer investors a steady stream of income when they finally stop working. Over and beyond, the retirement corpus could be paid as lump-sum amounts or partially every year or months up to a certain duration.
To Meet Financial Goals:
Be it educating your children, marrying them, buying a house, a new car or anything else, investment plans in the UAE can help you achieve all your financial goals. Moreover, depending on the timeline you have legroom for, you can create an investment portfolio that effectively helps you achieve your individual goals.
Whether you take endowment or unit-linked or annuity, there are a plethora of polar opposite UAE investment options for any investor in the UAE. (so forget about compromising with your desires, at least) On the same note, carefully choosing your UAE investment option holds utmost importance since you will be putting a sizeable amount of your savings into it, and of course, you want it to be safe and, even more, be profitable. Given below are some tips you can keep in mind when preparing to pick the best investment plan in the UAE:
The very first step to picking the best investment plan for yourself is identifying your goals. Further expanding, what do you want from your UAE investment options? What financial goals are you seeking to fulfil using your investment returns? Is it retirement corpus that you need, your child’s education, or saving to buy a new house? Your financial goals can prodigiously impact the UAE investment plan you choose to invest in UAE.
The level of risk you can afford to take at any given point in your life will be a deciding factor for the investment plans you pick. For example, if you can take higher risks, you may be able to invest in plans that offer better returns but with an equally high-risk portfolio. Therefore, see how much risk you can afford to take currently and then choose the best UAE investment plan for you.
Some investment plans start paying off returns almost immediately or only after a short duration. In contrast, others lock up your invested amount for a longer duration and pay returns after the end of that duration, for example, deferred annuity plans. So, if you have 10-20 years before you retire, you can afford to invest in investment plans like deferred annuity plans. On the other hand, if you are about to retire soon, investing in short-term investment plans is surely a better idea.
Instead of investing all your savings in a singular plan, creating a diverse investment portfolio is smarter. As they say, don’t put all your eggs in one basket, remember the old saying? Therefore, try out a few different options and see which one works out the best for you and meets your desires perfectly. Over and above, check the returns you yield with each option and examine the level of risk you have to take with each investment option in UAE.
The UAE investment plan that suits you the best today may not always stay the best investment plan for you. This is because your investment needs may change over time which may, in turn, change the best investment plan in the UAE for you as well. Therefore, keep revisiting and recalculating your investment needs to handle your UAE investment options better.
When you recalculate your investment needs, it may also serve you well to see if any new investment plans have come out. This is because there is well enough chance that your insurance provider may have launched investment plans with better returns and an easy-to-handle investment portfolio, and you surely don’t want to miss on that. Therefore, keep track of these updates not to miss out on additional profit.
Most UAE investment plans come in combination with term insurance plans. So, if your needs are limited to life insurance only, consider buying a term insurance plan instead of an insurance-cum-investment plan. However, if you want to have life insurance in the background and want to take some risk to gain better profit, unit-linked insurance plans may be perfect for you. Likewise, examine your need in this regard to ensure that you have the right plan on hand.
Your investment portfolio is not the only thing you need to consider when buying an investment plan in the UAE. To pick out the best UAE investment plan for you, you should also keep the following factors in kind before making the right decision:
Value of the Option:
The value that any investment plan holds at the moment should be of utmost importance to you as an investor. For example, if you have a unit-linked plan, you will have complete freedom of choosing your UAE investment option from the available mandate of the insurance company. On the other hand, if you choose to invest in equity, find out their current valuation before making a final decision. The same goes for other UAE investment options as well.
Your Savings:
Check the total savings you have and decide what part of it can you afford to invest. Deciding on the amount that you want to invest in is a critical part of your investment strategy because it may not be a good idea to invest all your savings at once. Rather, consider dividing it into parts – one to keep in a savings account as liquid funds for emergencies and the other to invest in investment plans. Since UAE investment plans lock your money for a certain duration, it is best to divide your funds as per your needs.
Your Current Financial Position:
Calculating where you stand financially is essential before picking a UAE investment plan. Answer some questions in your head before making a head-on decision. Can you afford to take the risk? Is it best to pick a safer investment plan? Do you have kids for whom you need to save? Do you have any outstanding loans like education loans? Figuring out your financial position is a must you can’t do without.
Reasons to Invest:
Your investment goals must be vividly apparent right from the beginning since it is a huge factor that helps in choosing your UAE investment plan and option. For example, if your goal is to build a corpus for retirement, investing in a long-term investment plan will be a good idea. However, if your goal is to build up funds in 5-10 years for your child’s education, you can try short-term investment plans. In a word, proper knowledge of your reason to invest will help you pick the right UAE investment plan.
Risk Level of the Option:
Naturally, you need to consider how much risk a certain investment plan brings in for you. Only after considering the risk associated with the investment and matching that with your affordability you can decide whether you should go with it or not. Nevertheless, if you cannot afford to lose your investment at all, going with something like a fixed deposit account or money back policy is smart.
Plausible Returns:
Calculate how much returns you will need on your investment to achieve your financial goals. Then find a UAE investment plan that meets your requirement ideally. Adding to that, building capital is the primary objective of investing your money in any kind of UAE investment option.
Probable Charges: While UAE investment plans do not come with any additional charges, double-checking everything before you land on one final option doesn’t hurt, right?
High ROI:
Being a part of one of the fastest developing economies globally, Dubai is on a constant high of being one of the best cities to invest in. As the crowning stroke, the government is proactive and works endlessly to make Dubai investors haven. For example, if you invest in Dubai, the chances of getting high returns are much higher than in most other places in the world. This significant advantage indeed makes it a smart choice to invest in Dubai.
Relaxed Taxes on Investment Gains:
Tax relaxation on investment gains and income is one of the most significant attractive points for most ex-pats who live, work and invest in Delhi. While rental investment gains are subjected to 5% taxes, other UAE investment options like investment plans, stocks and mutual funds are not subjected to any taxes. In addition, most other places offering good investment opportunities also charge an exceptionally high tax on investment gains. This advantage again makes Dubai one of the best places for investment.
Easy Retirement:
Getting a high return on your investment in UAE and keeping tax-free profits are not the only two things that would make Dubai the ideal place to plan your retirement. In fact, planning for retirement is something that begins as soon as you are in your 30s. Moreover, earning high gains on investment in Dubai and retiring in your home country or Dubai itself will bring you a much more comfortable retirement.
Multiple Options:
There are multiple options among basic investment opportunities like UAE investment plans, mutual funds, national bonds UAE, stocks, etc. In addition to that, every type of investment option in UAE also comes with its own sub-type, such as investment plans. In addition, there are numerous kinds of UAE investment plans one can choose from. Withal, there is no shortage of UAE investment opportunities, and you can try to find the perfect fit for you.
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Out of the myriad of UAE investment plans available in the market, all UAE investment plans can be divided into two main categories – long-term and short-term investment plans. So, the best investment opportunity in UAE for you will largely depend on your investment goals. Given below is the scenario when each of these two categories can be the best investment opportunity:
Long-Term Investment Options in UAE
Long-term investment plans are best suited for long-term goals like creating retirement funds. In addition, some long-term investment plans are also suitable for people who can afford to take more risks. For example, long-term investment plans can include options like deferred annuity plans, endowment plans and unit-linked insurance plans. All these plans either lock in your UAE investment for a long time or pose a higher risk as compared to other UAE investment plans. An example of investment plans that lock in investment for an extended period can be deferred annuity plans. Yet another example of long-term, high-return and high-risk plans can be unit-linked investment plans. So, you decide whether you want to lock in your funds for an extended period in exchange for higher profits, or you can’t afford to risk it at all.
Short-Term Investment Options in UAE
Short-term investment plans are perfect for investors who only require returns in a short duration. Short-Term Investment options in UAE are also often low-risk, at least in the case of UAE investment plans. An example of short-term investment plans is immediate annuity investment plans. However, if you have just a few years left before your retirement, choosing a short-term investment plan is a better idea to suit your individual needs.
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Investment is a process where you dedicate the assets you have today to gain a better valuation of the same assets later in the future. Investments are made on the premise that the assets you are dedicating today will gain a higher value in the future and ultimately help you earn profit.
Investment is one of the most effective ways to build wealth over time. Moreover, it helps you build a corpus and potentially beat the rate of inflation in the process. Therefore, without a doubt, investment in UAE is of utmost benefit.
Some of the most popular investment ventures in the UAE include stocks, bonds, investments plans, real estate, mutual funds, EFTs, NFTs and REITs.
The best thing to invest in at any particular time depends on the current market situation and your current ability to take the risk. For example, if you can afford higher levels of risks, high-risk and high-return investment options in UAE, like the stock market, may be a good choice. But, if you cannot take high risks, endowment plans, annuity plans and unit-linked plans are also good options.
High returns on investments are directly related to high risks, sure. You can yield high returns on your investment in UAE by investing in high-risk investments and keeping a smart track of the market.
The return you get on your investment depends on the investment plan and option you choose.
Saving money generally means keeping it in a savings account or fixed deposit account at the bank. Your saved money earns a certain percentage of interest over time. So, investment in UAE is basically dedicating your saved or free funds to buying business assets like stocks or property and then yielding returns from it.
There are no pre-set eligibility criteria to invest in the UAE. Some investment options in UAE may have eligibility guidelines; for example, minors who want to invest in stock markets must have the guardian operating their Demat accounts.
Unit-linked insurance plans, endowment plans and annuity plans are among the most promising investment options for ex-pats in the UAE. In addition to that, you can also invest in options like real estate, stocks or mutual funds.
There is no specific amount you need to save when you are 30 years old. However, the recommended step is to save 30% of your total income when you are in your thirties.
Since 25 is still a raw earning age when you are busy building a career, it is recommended that you save 10%-20% of your monthly salary. This mantra could be proactively followed throughout your 20s.
Finance experts say that your retirement fund per year should be at least 80% of the total income you have at the time you retire. For example, if you are making AED 100,000 per year when you retire, you will need AED 80,000 per year as your retirement fund.
The earlier one starts investing, the higher are the chances to benefit in the long run. The best age to start investing is when you start earning a stable income. By investing at an earlier age, you can take advantage of higher compound interest. It also helps in recouping any losses arising because of market conditions.
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