Setting aside a little money for our future is a habit that we have learned since our childhood. Growing up, we’ve realised that this habit has helped us with various emergencies. With the help of an instrument called the savings plan, you can gather funds for the future. For example, a money-back life insurance policy can be the best saving plan for someone who wants to ensure a flow of funds for the future. With this policy, you are not only securing a life cover; you are also investing the funds and building a corpus for later.
What are Savings Plans?
A savings plan is basically a form of life insurance plan which will provide you with the chance to accumulate and invest funds for meeting your financial needs. Savings plans come with the dual benefit of an insurance cover as well as savings, which is why they are so popular. This insurance tool is designed to inculcate a habit of savings in you.
You can save in a systematic and disciplined way to achieve your long term financial goals in life. These plans offer different features which will help you meet specific goals and are designed according to your suitability. It also offers a death benefit to the policyholder’s beneficiary, in the event of an unfortunate demise.
Features of a Savings Plan:
Tenure and age:
They offer their services to a wide age bracket with a comfortable investment tenure/policy term. If you enter at a young age, your risk profile is high. They are suitable for policyholders who wish to keep their money safe.
The savings plan provides various investment tools for their policyholders. You have the option to choose from high-risk equities to low-risk fixed interest instruments like corporate bonds.
Insurance Tax benefit:
The premiums that you will pay for these insurance plans are tax-deductible. The maturity and death benefits are also eligible for tax exemption.
Life cover and riders:
These plans work as hybrid plans that offer the benefit of both investments and insurance. Just like insurance plans, you can also add riders to the plan.
Some of the benefits of a savings plan are
Since they are an insurance product, it mostly offers financial coverage to you and your beneficiaries. Apart from the investment earnings, you also get the benefit of providing financial coverage to your family.
A life insurance policy with a return policy is a great tool to inculcate the habit of savings. As these plans offer not just wealth creation but also life cover, paying premiums on time becomes imperative, thereby promoting regular investments, and thus savings.
Everyone’s life and financial goals are different. Savings plans take this into account and provide you with the ability to customize it. When you are looking for the best saving plan, you don’t need to look far as you have the opportunity to customize the plan as per your needs and requirements. You can change the investment instruments in the middle of your plan as per your financial needs.
No matter what your financial goals, you can achieve them by investing in a savings insurance policy that has low risk but offers great returns.
Hence, a savings plan provides you and your family with the safety of financial coverage and you can benefit from the savings as well. It also offers great tax benefits and can help you reach your financial goals easily.
Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.