The COVID-19 pandemic has made everyone across the globe realize how uncertain life can be. While as an Individual we cannot control what happens in the world, we can prepare ourselves financially to be able to sail through tough times. Moreover, with inflation on the roof and the cost of living getting higher whether it is school education or medical expenses, it gives us more reasons to be financially safe in this economy. Furthermore, you have to think about your family when you are not there and in this case, having a short term investment and investing in saving schemes can support them significantly in case of unforeseen financial expenses happen. In this article, we will understand how savings schemes such as savings insurance plans are becoming preferred by a majority of people.
A savings insurance plan is a type of life insurance whereby the policyholder saves and invests their money to provide financial security for themselves and their loved ones. These plans are designed in such a way that helps to encourage disciplined savings while providing steady returns.
Top Features of a Savings Insurance Plan
We all want to reach all of our goals: school, marriage, loan repayment, house or car purchase, etc. and one of the best ways to achieve them is to have a short term investment plan by your side and saving schemes for the long-term goals. Let’s understand the features of a savings insurance plan:
1. Provides financial security to you and your loved ones: Purchasing a savings insurance plan financially protects your family and yourself. Moreover, it also helps you to financially secure your retirement. We all know how uncertain situations become upon the death of the sole earning member of the family. In such cases, monetary backup from saving schemes such as ULIP can offer financial backup even in your absence.
2. Comes with fixed returns: One of the best things about savings Insurance plans is they provide fixed guaranteed returns hence, one can be at peace and doesn’t have to worry about financial security
4. Tax Benefit: Do you know the premiums you pay for your savings insurance plan are qualified for tax benefits? Under Income Tax Act Sec 80(c), premiums paid are deductible from your taxable income.
4. Comes with flexibility in terms of mode of payment of premiums: Purchasing a savings insurance plan allows you the freedom to select the premium frequency. Your current financial situation will determine whether you pay your premiums once a month, once every three months, or once a year.
5. Comes with Add-on rider benefits: Instead of buying a new insurance policy, one can easily get the add-on rider feature. Add-on benefits such as accidental death benefits, critical health benefits, etc., can help you get full coverage.
6. Policy tenure: A saving insurance policy allows you to specify, at the time of purchase, the term of the policy based on your needs and those of your family.
7. Helps you secure your assets: Should you have a debt to be paid back and you, unfortunately, passed away suddenly, your family may have financial difficulties and may have to pay the loan back against assets including a house, car, etc. With the help of savings schemes, your family will be able to protect their assets and will not have to face any financial worry.
8. Comes with the loan provision: After you have reached a specified amount of savings, you have the provision of applying for a loan. We all know regular loans come with higher lending rates as compared to savings insurance policies.
9. Comes with extra bonus payouts: If applicable, a saving insurance plan offers you extra bonus.
Why should one make investments in a savings insurance plan?
Uncertainties do not have a warning. Unexpected expenses—health and medical, accidents, early death, etc.—can weigh on you and your family members financially. In an unfortunate event like the death of the policyholder, your family could face financial difficulties and find it challenging to meet even the most basic needs. This is why it is better to narrow down the short term investment and saving schemes early on in your career for far more affordable premiums. A savings insurance plan comes with death benefits, tax benefits, etc. to financially secure your loved ones in your absence.
Furthermore, the coverage will help them to reach their objectives free from financial limitations. Moreover, purchasing a savings insurance plan helps you create a habit of consistent savings, which is required to inculcate in the modern period. It also guarantees that you spend sensibly and that you financially protect the future of your family. Investing in a savings investment plan can enable you to reach your long-term objectives like those of marriage, child education, house or car purchase, etc.
