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Investing in a Savings Plan? Here are 5 Critical Things to Consider

In this world of uncertainties, the importance of saving money for critical financial objectives have been highlighted repeatedly. The financial objectives include not only your personal goals but also your loved ones. Your limited earnings would not be enough to meet diverse objectives across different time horizons. This requires planning your investments. Investing in a suitable - saving investment plan allows your money to grow and create a corpus over time. 
 

There are various investment products in the financial market. It is vital to be able to select the most suitable savings plan as per your investment preferences. Here are five critical things to consider while evaluating the best options for savings.
 

  1. Assess Your Goals

    Investments aid in achieving a specific financial objective.  Every investment must have an associated goal. Investing without an aim lacks direction and is as good as not saving. It is crucial to list down the financial needs at various stages of life. These could be higher education, marriage, children’s education, children’s marriage, and retirement planning. Thereafter, you must align the investment type and tenure with your financial goals. This aids in opting for the most suitable investment option. Hence it is important to assess your goals to be able to select the best long-term savings plan.
     

  2. Affordability and Risk Tolerance
     

    The next important parameter is comprehending the affordability of investments. Lump-sum, as well as staggered investments, must be timely done. Unable to meet the investment schedule may cause the savings plan to lapse, defeating the investing purpose. Apart from the ability to invest, the ability to take some risks also plays an important role.--
     

    For instance, market-linked investments subject to market volatility can aid in the appreciation of capital over time. It thus has the potential to meet long-term financial objectives. Thus, you must take into account affordability and risk appetite while evaluating the best investment plan with - returns. 
     

  3. Liquidity
     

    The tenure of a saving plan for meeting your long-term objectives is usually long. Besides, they may also be subject to a lock-in period. There might be a possibility of funds needed to meet emergencies in the future. Hence it is essential to comprehend the lock-in period and withdrawal facilities. If the saving plan allows a partial withdrawal facility, it is a financial cushion to combat financial contingencies efficiently. Besides, the remaining funds continue to work towards meeting your financial objectives.
     

  4. Associated Tax* Benefits
     

    Section 80C of the Income Tax Act allows investments in certain financial instruments as a deduction from the gross total income. This results in a reduction in the amount of taxable income and tax* liability. You not only save while investing, but you also enjoy additional savings through the permissible deductions. Saving plans offer tax benefits that help you claim tax deductions on the premiums under Section 80C of the Income Tax Act. Thus you assess the available tax benefits while investing. However, tax savings should not be the sole objective as it is important to plan investments per the financial goals and risk appetite.
     

  5. Understand the Corresponding Terms and Conditions 

    Another important aspect is to be well-versed with the commonly used jargon along with the terms and conditions of the saving plan. This enables us to understand the features and advantages of the plan better. Discussing and knowing the associated charges and the anticipated returns is also important. You must be aware of the nature and type of deductions that the maturity amount is subject to - this further aids in making an informed investment decision.

What is the apt Long-Term Savings Plan?
 

An investment plan is apt if it has the potential to meet your financial needs and objectives. Taking into account the above-mentioned critical suggestions can aid in selecting the most suitable saving plan.
 

You must create a secure financial future for your family. It allows them to lead a financially comfortable life in your absence. It is also crucial to plan the finances for the important milestones in your life. A well-planned children’s wedding and a quiet retired life are some of the common desires. Thus, insurance and investments play a vital role in a stable and peaceful life. 
 

Certain insurance plans offer protection as well as investment solutions. They are thus beneficial in creating a financial cushion for your loved ones while working towards your financial goals. Evaluation and assessments don’t stop with the selection of the insurance-cum-investment plan. There are multiple service providers in the insurance domain.
 

Savings Plans for all needs by Tata AIA Life Insurance
 

TATA AIA Life Insurance is one of the reputed names in the insurance industry. It provides protection as well as investment features through its different saving schemes with guaranteed1 returns/income, catering to different financial needs. These are some of the features that Tata AIA Life Insurance savings plans have to offer:
 

Whole Life Cover up to 100 years: A few of our Tata AIA savings plans provide a whole life cover that extends up to 100 years of age. This means that you and your family are covered for the entire duration of your life, which can provide financial security and peace of mind.
 

Guaranteed1 Payouts with Bonuses2: Depending on which policy you choose, your Tata AIA savings plan can offer guaranteed1 payouts with bonuses2 (if declared), which can help policyholders build a substantial corpus over time. These payouts can be in the form of regular income or a lump sum at maturity, depending on your choice.
 

Choice Between Regular Income and Endowment: Some Tata AIA savings plans allow you to choose between regular income or endowment options. The regular income option can help you meet your day-to-day expenses, while the endowment option can help you accumulate wealth for long-term financial goals.
 

Maturity Payouts for Women: Select Tata AIA savings plans offer enhanced maturity payouts for women, which can help one build a substantial corpus for retirement or other financial goals.
 

Inbuilt Benefits: Some Tata AIA savings plans come with an accidental death benefit or a terminal illness benefit, which provides some portion of the sum assured benefit to you if the covered events occur.
 

Choice of Riders#: Tata AIA savings plans offer you the option to add optional riders such as critical illness, waiver of premium, and accidental death and disability benefit, which can enhance the scope of your policy coverage. 
 

Conclusion
 

The apt investment return plan is helpful in creating a financially secure life. Besides, it is vital to combat the current uncertainties in caring for your family. Hence investment decisions are critical and must be taken after due evaluation. Be clear about the financial objectives and the ability to tolerate risk before investing in a particular saving plan.
 

L&C/Advt/2023/Mar/0781

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimer

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and they will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms, and conditions, please read the sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to provide any financial or investment services and does not offer or form part of any offer or recommendation. The information should not be regarded as investment advice or a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication; however, Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • 1Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term, and Age at entry.
  • 2These bonuses are not guaranteed in nature. The Company may declare a Cash Bonus rate annually in advance. The Cash Bonuses, if declared will be applicable provided all due premiums have been paid.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • #Riders are not mandatory and are available for a nominal extra cost. For more details on the benefits, premiums and exclusions under the riders please refer to the Rider Brochure or contact our Insurance Advisor or visit our nearest branch office.