Wealth Guide: How to Create a Virtual Property using Insurance? 5 advantages to investors

When Suresh, an IT professional, returned to Mumbai after a long stint in the Gulf, he thought of investing his lifetime savings of 50 lakh rupees in purchasing a second home for generating rental income.

However, he was shocked to find that most properties were beyond his budget, in the range of 90 lakhs or higher. Not wanting to take a loan, he unwillingly chose to invest in a fixed deposit instead despite low and falling interest rates.  

Over the last 10-12 years property prices have hit the roof across most major cities in India. The situation is no different even in tier 2 and tier 3 cities in the country.

In such a scenario, creating a virtual property using insurance makes great sense for those looking to invest, just for generating additional income. By investing in a guaranteed annuity plan one can create a virtual property using insurance.

There are many guaranteed annuity plans available in the market that offer a guaranteed lifetime rate of return of approximately 6%. Such annuity plans offer multiple options to choose from at the vesting age chosen by the policyholder.

One of the most commonly preferred options by policy buyers is the return of purchase price on the demise of the policyholder.

Abhishek Misra, CEO & Principal Officer at Bonanza Insurance Broker Pvt. Ltd highlights the top 5 key advantages of investing in a virtual property using insurance over real estate:

No maintenance costs

A real estate property requires regular maintenance from time to time for repairs and renovation which are not only time-consuming but also require additional money.

There are no such costs involved when you invest in a virtual property using insurance.

No property tax or registration tax

Real estate properties are subject to registration tax and stamp duty charges during purchase which further increases the costs.

Besides this, one also has to pay property tax at yearly intervals. All these charges are not applicable when investing in a virtual property using insurance.

Guaranteed regular income

In a real estate property, there may be periods with no tenant occupancy. During such times, there will be no rental income generated. When you invest in a virtual property using insurance, there are no lull periods and regular income is generated continuously.

Assured rate of return for lifetime

The rent amount for real estate property depends on demand. In future, if there is low demand in a particular area for rental properties, the rent will also go down.

On the other hand, when you invest in a virtual property using an annuity plan, the rate of returns (approximately 6%) are guaranteed for a lifetime.

No litigation problems

Real estate properties can be subject to legal disputes and problems with cases dragging for years. However, there is no such issue when you invest in virtual property.

Key takeaways

Investing in a virtual property using a guaranteed lifetime annuity plan offers many benefits over traditional forms of real estate investments. It not only enables you to save money on taxes and maintenance costs, it also ensures guaranteed peace of mind.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)