Top 5 Benefits of a Savings Plan

We hear about savings and its importance from our parents since childhood. At that time, we may not fully understand the importance of saving. However, as we grow and begin our career, we slowly realise how savings can help us achieve our financial goals. Many insurance companies recognise that individuals want to ensure financial security through savings. They offer various savings insurance plans and guaranteed whole life annuity plans in India. Read on to learn more about the benefits of a savings insurance plan.

What is a savings plan?

A savings plan is an insurance plan that allows you to save and accumulate funds for the future. Additionally, it provides life coverage for the policyholder, helping secure the family’s financial future.
 

These savings plans offer life protection along with guaranteed¹ returns, helping individuals with a low-risk appetite meet specific financial needs by investing in risk-free investment avenues, thus ensuring assured returns to the policyholder.

The top 5 benefits of a savings insurance plan:

Savings plans are the preferred financial options for individuals seeking systematic savings and benefits for the future. Here are some of the key advantages you receive with a savings insurance plan:
 

• Helps develop financial discipline:

  When you understand the importance of savings you begin to adopt proper saving habits. However, without a clear goal, it can be difficult to maintain regular savings.
  
  This is where a savings insurance plan can help. One key benefits of investing in a savings plan is that it encourages you to build financial discipline while also providing protection.

   

• Provides you insurance coverage along with guaranteed¹ payouts

  Since a savings insurance plan is essentially an insurance policy, it provides insurance coverage.
  
  In addition to insurance coverage, the plan also offers tax-free² maturity benefits. This combination ensures comprehensive financial protection for you and your family.
  
  With guaranteed¹ payouts, you stay assured of fulfilling your family’s dreams and financial goals.

   

• Offers tax savings options

  Savings insurance plans provide policyholders with tax² benefits. You can claim a tax deduction of up to ₹1.5 Lakh on premium payments under Section 80C of the Income Tax Act.
  
  Furthermore, maturity and death benefits are tax-exempt² under Section 10(10D) of the Act.
  
  

• Helps you meet your financial goals
  

  We usually set important goals in our life that require financial support. A savings insurance plan helps you achieve these essential life goals.
  
  For example, some plans are designed to help you save for your children’s education. To meet your goals effectively, compare available plans and choose one that suits your needs.
  
  

• Offers flexibility

  Every individual has unique priorities and goals. Savings plans help achieve them by offering a range of flexible options tailored to individual needs.
  
  Some plans also provide various investment options, payout structures, and terms. You can adjust your investments based on changing financial needs and risk tolerance.

   

How can you pick the right savings insurance plan?

Choosing the right savings plan is key to achieving your financial goals with the right balance of safety, returns, and flexibility.

Step 1: Set your financial goals Decide what you’re saving for, such as retirement, your child’s education, or any other life goal.

Step 2: Know your risk appetite Understand how much risk you're comfortable with. Choose guaranteed¹ plans if you prefer safety, or market-linked² ones if you can take some risk for higher returns.

Step 3: Check returns & growth potential Compare different plans based on past performance, returns offered, and how well they match your growth expectations.

Step 4: Understand lock-in liquidity Check if the plan allows partial withdrawals and know how long your funds will be locked in before you can access it.

Step 5: Look at tax benefits See if the plan offers tax² deductions under Sections 80C, 10(10D), etc, to help save on taxes.

Step 6: Consider Inflation protection Choose a plan that offers returns which may offer relatively more returns compared to the rate of inflation and preserve your funds real value.

Step 7: Check flexibility options Prefer plans that offer premium payment flexibility, top-ups, or easy withdrawal features.

Summing up

Investing in a savings plan or annuity scheme at any stage of life can be a strategicas step towards achieving long-term financial goals. These plans offer the dual advantage of life insurance coverage and assured returns, providing financial security for your family in your absence while supporting your personal financial objectives. By offering both protection and disciplined savings, they enable comprehensive financial planning. Select a plan that aligns with your specific needs and future goal to ensure your needs are mety.