Click here to get this post in PDF
As some people say, ‘a penny saved is a penny earned’, it is valid to a considerable extent. As the emergencies and uncertainties come uninvited, it is essential to incorporate smart financial planning and stay secured for rainy days. Investing in a life insurance product is one of the major parts of efficient financial planning.
Nonetheless, you might find it difficult to choose the right insurance policy for yourself amongst the number of insurance policies available. You need not worry about the same and start with investing in a simple life insurance product, like, the best saving plan. These plans are designed to encourage disciplined savings and help you earn guaranteed returns throughout your policy’s tenure.
Depending on your requirement, you can either opt for monthly income or a lump sum pay-out at the end of the tenure. Buying the best savings plan will provide you with several benefits along with life coverage.
Before you start investing in a savings plan, it is essential to explore and learn about the various types of investment options available. Therefore, depending on your requirements and financial capacity, you can choose the best savings plan in India. Find below three compelling reasons for buying the best savings plan:
- Comprehensive life insurance coverage
- Source of steady income through disciplined savings
- Wealth accumulation
Benefits of Investing in a Savings Plans
Coverage As Well As Payout
Being a financial product, a savings plan provides financial coverage to your family in case of your untimely demise. Apart from this, you also benefit from the pay-outs you receive either every month or in a lump sum amount at the end of the policy’s tenure, depending on the frequency you choose. This can solve the dual purpose of providing protection to your loved ones and giving wings to your dreams.
Financial Security
A savings plan helps you stay financially secured throughout your life and encourages saving, investing and wealth accumulation while preparing you to fight the contingencies.
Besides, if you are the sole breadwinner of your family, it is advisable to invest in such plans to ensure a standard life for your family members in case of your untimely demise. Otherwise, they might have to suffer and stay financially dependent on someone.
Offers Flexibility
Every individual is different from the other, and so are their priorities and life goals. Generally, reputed insurance providers consider such differences before offering an appropriate savings plan, so that the fund availability falls in line with their goals. You can choose the sum assured and the tenure depending on your financial capacity.
Tax Saving
Under Section 80C of the Income Tax Act, 1961, you can avail of tax benefits on the premium payment of upto Rs 1.5 Lakh. The amount which you pay towards the insurance will be deducted from your taxable income. Therefore, investing in the best savings plan proves to be a win-win situation.
Meet Your Life Goals Efficiently
As an individual, you might have a dream or goal to achieve but might fall short of the funds. To overcome this deficit, you can start investing in the best savings plan and accumulate considerable wealth over a period of time. You just need to pay the premium at regular intervals and have a lump sum amount at the end of the tenure. You can use this amount for a long-pending foreign trip, to turn your/your child’s education goals into a reality, etc.
Apart from knowing the benefits of investing in the best savings plan, it is essential to know how to choose one. After analysing your short term and long term financial goals, you can follow simple steps while keeping in mind your family’s financial requirements, liabilities, etc.
- It is essential to review and compare different insurance plans based on their benefits and features, terms and conditions, etc. Shortlist the insurance plans that align with your goals.
- Check the withdrawal conditions- whether you can withdraw the amount in case of an emergency.
- Explore the different rider options available to widen the coverage of the savings plan. You can add these benefits to your basic savings plan.
- After this, you can use the savings and income calculator to evaluate the amount of premium amount payable. It is advisable to choose one with the affordable premium so that it does not seem to be an additional financial burden.
- Lastly, you can buy the best savings plan for yourself online or offline.
To conclude, it is important to choose one of the credible insurance providers so that you do not have to face issues later. Usually, these insurance providers mention everything exclusively in their terms and conditions to avoid confusion later.
Also, you should check the chosen insurance provider’s profile, claim settlement ratio, customer reviews, etc., to have a fair idea about their credibility and services. This will significantly help you choose the best insurance provider and avoid claim settlement issues in the future.
You may also like: What is an ISA and how Individual Savings Accounts work
