Life insurance and savings are two important aspects of life without which financial independence becomes impossible for you and your family. Financial independence is the cornerstone for a happy, peaceful, and responsible life. Purchasing two different plans for protection and savings are possible.

However, a comprehensive plan that combines the benefits of saving in life insurance and provides guaranteed¹ savings returns can also work for your requirements. Here are four reasons how it is beneficial.

 

Before we understand the reasons, let us know how a comprehensive plan provides insurance and savings benefits.

 

 What is a Life Insurance Guaranteed¹ Return Plan?

 

A comprehensive savings insurance plan provides dual benefits: life cover and the guaranteed¹ returns. The life cover ensures the sum assured to your nominee in case of your unexpected death, and the guaranteed¹ returns are provided as a maturity benefit. It can be availed of as a lump sum amount, regular income or a combination of lump sum and regular annual income.

 

 Next, let us discuss how the combined plan savings protection can work for your various needs.

 

1. Handling family responsibilities effectively: Fulfilling family responsibilities should be of primary concern. And, it is even more important if you contribute to the family’s financial requirements. For example, if you are the sole earning member in the family, you must ensure all the financial commitments are met at different stages as they arise. You also have to ensure that these commitments get fulfilled even in your absence. Hence, life cover to protect your family's financial future becomes prominent.
   
   However, savings cannot be compromised while purchasing a life cover. A dedicated savings plan will serve your financial needs in the future, such as your child’s education, and ensure a peaceful retirement. Tracking two different plans can be difficult if you have family and professional responsibilities.
   
   Therefore, a comprehensive plan with insurance and savings benefits such as life insurance with returns will be ideal for effectively handling family expenses. It makes managing financial expenses simple, convenient, and hassle-free.
   
   
2. Safe investments with assured returns: Many risk-averse investors look for savings and investment solutions that are extremely safe. The reason is that responsibility for their family’s financial commitments compels them to stay away from the stock markets for earning high but risky returns. The risk arises from market volatility leading to price fluctuations that we cannot control.
   
   As the returns are guaranteed¹ in the savings insurance plan, it is extremely safe. Therefore, you can plan for your long-term financial commitments, such as your child’s education, with precision. And since it is inclusive of the life cover, your family can plan for the commitments even in your absence. Your family can utilise the funds for paying off debts or any other pending loan repayment.
   
   
3. Cost-effective: For many people, insurance and savings become divergent options. However, buying two different plans can be difficult due to cost constraints. For example, if you are about to retire in a few years and have your spouse and parents as your dependents, their financial security is your responsibility. Therefore, you have to ensure a regular income for their survival.
   
   With the monthly saving plan, you will be assured of receiving a regular monthly income when the plan matures. You can define an income period for the regular income or extend it until death. However, the base plan remains constant, with the life cover providing the death benefit to your nominee in case of your unexpected demise. Therefore, the policy becomes cost-effective.
   
   In addition to that, if you plan to invest early in life, the savings insurance plans will be available at extremely cheap premium rates. The reason is that when the insurers calculate the sum assured and the corresponding premium, they consider the probability of death risk. At a younger age, the possibility of having a pre-existing illness or any associated disorders is extremely less. It is an important factor that reduces the probability of death risk. Therefore, the premium rates get automatically adjusted and reduced to a great extent. You can access the plan online, compare and review the benefits and use the saving insurance calculator to find the approximate cost that you can expect for the policy term..
    
   
4. Tax* benefits: Tax* benefits have always been a target for many people while considering insurance and savings plans. However, not all traditional saving schemes provide tax* benefits. With a savings insurance plan, you can avail of tax* benefits based on the premium you pay annually and get both the protection and savings benefits with the plan.
   
   The premium amount paid towards the policy and the generated returns qualifies for the tax* deduction and tax* exemption under Section 80C and Section 10(10D) of the Income Tax Act.
   
   
   

Conclusion

Life cover and savings play an important role if you have extreme financial responsibilities at different stages in your life. However, managing two different plans can be difficult if you are a busy professional and not affordable if you have cost consideration. A combination of protection and savings can resolve this scenario. Also, it ensures prompt and safe returns for risk-averse investors. And, the combined plan also works if tax* benefits are an important expectation.

 

So, look for comprehensive plans for effective financial management and stay invested in the long term for higher returns!

 

L&C/Advt/2022/Jul/1745