Have you ever thought of the benefits of saving money with a savings plan? A savings plan is a life insurance product offering the dual benefit of life cover and creating funds for future needs. It is perfect for financing mid-term and long-term financial goals since you can save and multiply your earnings over the years.
 

Here are five reasons why you should consider buying a savings plan:
 

Fixed returns and long-term benefits
 

With a savings plan, you get fixed returns, guaranteed¹ when you buy the policy. Thus, these plans are suitable for new investors or those who are averse to bearing market risks. Knowing the returns you can expect also helps you plan your finances more efficiently. You can use the funds for
 

• children’s education or marriage
• buying a car or property
• ensuring your financial stability in retirement
• bearing the health care costs of a dependent spouse or elderly parents
   

Thus, with a savings plan, you never have to face the doubt, ‘how much savings do you have?’. You are always sure that you are saving enough for your aspirations.
 

Financial coverage
 

Your family depends on you for their living costs. As the breadwinner, you might wonder how much to have in savings to cover their expenses in your absence. Savings plans secure your family against such financial worries in case of an unfortunate event. Along with the guaranteed¹ returns at maturity, these policies also provide an assured payout to your nominee if an unwanted event occurs.
 

Many savings plans offer the option to add riders^# to extend your base coverage for a nominal increase in the premium. You can get a lump-sum amount if you contract a critical illness covered under the plan. Your family can get extra payouts if death or disability, or dismemberment occurs due to an accident. You can arrange for your family to receive the sum assured as a lump-sum payout or monthly instalments per their financial needs. Thus, savings plans offer all-around financial protection to your loved ones.
 

No depreciation in fund value
 

With a savings plan, you never have to wonder how much savings have accumulated for your future requirements or if the amount would suffice.  Your savings plan is safe from market volatility, never losing its fund value. Moreover, such plans ensure that the value of your money does not decrease due to inflation. Using the power of compound interest, the interests earned, added to your capital, fetch further interests.  Thus, your investment grows at exponential rates, offering inflation-adjusted returns.
 

Savings habit and financial discipline
 

A savings plan inculcates a regular and disciplined savings habit since you have to pay periodic premiums. Insurance companies provide monthly, quarterly, half-yearly, or annual payment options over the policy period. Since you have to set aside a sum from your income regularly, you become more cost-efficient in your spending habits. Thus, you can free up even more funds for other investment avenues.
 

Tax^* benefits

 

 

The premiums you pay for your savings plan are deductible from your taxable income under Section 80C of the Income Tax Act, 1961. Under this provision, you can claim up to ₹1,50,000 in tax deductions. The payouts from a savings plan are also tax-exempt if your policy meets the conditions under Section 10(10D). Thus, a savings plan serves as an effective tax-planning instrument.
 

TATA AIAs Saving Plans
 

TATA AIA offers a range of saving plans with guaranteed¹ returns/income, catering to different financial needs. Some of the features are as follows:
 

• Guaranteed¹ Monthly Income: Our savings plans offer a guaranteed¹ monthly income depending on your chosen plan. You will receive a fixed amount of money every month for a specified period. This income can help you meet your regular expenses and provide financial security to your family. The amount of the monthly income is predetermined at the time of purchasing the plan.

   

• Comprehensive Life Insurance Coverage: Our savings plans comprise a life insurance component that helps you secure your family's financial future in your absence. They can receive a lump sum payout in the event of your untimely demise. When buying the savings plan, you can choose the life cover or sum assured as per your needs.

   

• Guaranteed¹ lump sum payout: Some of our savings plans also offer a guaranteed¹ lump sum payout at the time of policy maturity. Pick a policy term of your choice to determine how many years you want to save your money. The lump sum amount can be used to achieve your long-term financial goals.

   

• Whole Life Cover up to 100 years: Depending on which policy you choose, you can get whole life cover for up to 100 years for your family. This can be useful if you don't want the policy coverage to end and want to avoid the hassle of purchasing a new plan later. You can choose the coverage period at the time of buying the policy.

   

• Additional Bonuses²: Some of our policies offer additional bonuses on the maturity amount, such as reversionary and terminal bonuses. However, these are not guaranteed¹ bonuses² and can only be added when declared. You can boost your savings with these bonuses and get additional financial security.

   

• Option of lump sum and regular income payouts: Under some of our savings plans, we offer the flexibility to choose how you want your payouts. You can receive the lump sum amount at maturity or opt for regular income payouts for a certain number of years. The regular income payouts can be monthly, quarterly, half-yearly or yearly and can be customised accordingly.

  
   

To conclude:
 

Savings plans enable wealth preservation as well as creation at minimal risks. However, to buy a savings plan that gives you the maximum benefits at minimal premium prices, you need to compare the different offerings from various insurance providers.
 

You can visit their websites and look into the features, payout options, premium rates, and other policy terms and conditions.

 

L&C/Advt/2023/Mar/0782