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A savings insurance plan helps you set aside money for future expenses and financial goals. By regularly investing money into a savings plan, you can build a financial cushion to fall back on in an emergency, such as a job loss, medical expense or even something as severe as a permanent disability.
The life cover, an important component of a savings plan, provides financial protection for your loved ones in the event of your untimely death during the policy term. The life cover pays out a death benefit to your selected nominee/beneficiaries, who can cover expenses such as funeral costs, outstanding debts, and daily living expenses.
Some savings plans also offer benefits such as bonuses / dividends in addition to the regular maturity or death benefits of a savings plan. However, it is important to note that bonuses / dividends are generated from the profits of the insurance company and are non-guaranteed components. This means that these components are variable and depend on the performance of the insurance company. A savings plan can also help you save for long-term goals like buying a house or retirement. Lastly, such a plan can also help you make some investments for the future with potential gain and some financial freedom.
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How to Choose the Best Savings Plan?
Choosing the best savings insurance plan can be simple once you identify your needs and check the different options with their features and benefits.
For instance, you may want to receive a payout during the policy term to fulfil your short-term goals. In such a scenario, the sub-wallet feature under the Tata AIA Smart Value Income Plan can enable you to withdraw and utilise your cash bonus as partially needed. And for your long-term needs, you can receive a sum assured on maturity that will also include any declared or accumulated bonuses from the policy.
However, here are a few things to consider when selecting a savings plan:
The first step in selecting a savings insurance plan is to identify your specific needs and financial goals. Consider how much coverage you need, how long you plan to hold the policy, and your budget.
Look at different savings insurance plans and compare each plan's features, costs, and benefits. Comparing plans will help you to find the one that best meets your needs and budget.
To keep a savings plan active and to enjoy life insurance coverage, you will need to calculate the premiums. This can ensure that you pay reasonable premiums and do not miss out on any payment.
Be sure to read the fine print of the policy you are considering and understand the exclusions and limitations of the policy. This can help you avoid any hassles while filing a claim.
Research the claim settlement ratio of the life insurance provider. A higher claim settlement ratio each year indicates that the insurer can successfully settle your claims on time.
While comparing plans, consider the long-term benefits and advantages offered by the plan. Some plans may have different savings options with different features that can benefit you in the long term. Also, check the bonus performance of the plans. While past performance is not indicative of future performance, it will give you a fair idea of the company's performance.
Ultimately, the best savings insurance plan for you meets your needs and budget while offering the best value in terms of coverage and benefits.
Tata AIA
Individual, Non-Linked, Participating Life Insurance Savings Plan (110N162V01)
Tata AIA
Individual, Non-Linked, Participating Life Insurance Savings Plan (UIN: 110N153V01)
Tata AIA
Non-Linked, Participating, Individual Life Insurance Savings Plan (UIN: 110N119V02)
Tata AIA
Non-Linked, Participating, Whole Life Individual Savings Plan (UIN: 110N029V03)
Tata AIA
A Non-Linked, Participating Individual Life Insurance Savings Plan (UIN: 110N133V02)
Savings plans also offer tax benefits as per the Income Tax Act of 1961:
The premiums paid towards your savings plan qualify for a tax deduction of up to ₹1.5 Lakh per financial year under Section 80C of the Income Tax Act.
The maturity and death benefits paid out will be tax-exempt under Section 10(10D) of the Act, subject to certain policy terms and prevailing tax guidelines.
Health riders, such as critical illness riders, provide a tax deduction of ₹25,000 to ₹1 Lakh under Section 80D, subject to the rider sum assured and the premium amount.
Individual, Non-Linked, Participating Life Insurance Savings Plan (110N162V01)
Tata AIA
Option to receive Cash Bonus (If declared) from the 1st Month of the policy1
With Life Protect feature continue life cover2 in case of loss of employment/income
Get Income Tax benefits# as per applicable tax laws
There are different categories of people who may find a savings plan to be a good fit for their needs.
Primarily Savings plan could be
People Seeking Life Cover and Savings
People Who Want to Leave an Inheritance
People Seeking Good Returns
People With High-Income or High Net Worth
The right time to invest in a savings plan can vary depending on your personal circumstances and financial goals. It is generally a good idea to start thinking about investing in a savings insurance plan as early as possible since the earlier you start, the longer your money has to grow. Also, when you start a savings plan early, you can benefit from lower premiums on your policy, owing to lower health risks at a young age.
Two other factors to consider when deciding when to invest in a savings insurance plan are –
Your Financial Goals
Segregate your short-term and long-term goals to select a savings policy. If you want to meet both goals, a money-back plan such as the Tata AIA Money Back Plus can be a suitable option. The plan offers a survival benefit during the policy term for your short-term goals and a maturity benefit to help you meet your long-term goals.
Your Current Income
If you can start investing in a savings plan, choose a suitable policy and calculate the premiums so that you do not miss out on the payments due to expensive premiums. After the premium payments, your financial resources should be adequate for other financial needs and emergency situations.
Documents Required to Purchase Savings Plans
To buy a savings insurance policy, you must keep the following documents handy
Proof of Address |
Proof of Identity |
Proof of Income |
Aadhar Card |
Aadhaar Card |
Salary Slips of The Last 3 Months |
Passport |
Passport |
Income Tax Returns Receipt/Employer Certificate |
Voter’s ID |
PAN Card |
Bank Statement of The Last 6 Months |
Driving License |
Driving License |
Latest Form 16 |
Electricity Bill/Telephone Bill |
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Ration Card |
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File your claim and enjoy swift claim settlement in just 4 hours^.
Our Individual Death Claim Settlement Ratio6 for FY 2021-22 is 98.53%.
Families protected so far7.
Flexibility to choose premium payment mode as per convenience
^T&C apply
Our experts are happy to help you!
What is the right age to buy a savings plan?
You can buy a savings plan at any time, subject to the minimum and maximum entry age of the savings plan. However, it is advisable to purchase a savings plan early, as it enables you to benefit from lower premiums.
As you grow older, any potential health condition will increase the risk of your life, which will increase your premiums. Moreover, at a younger age, regular saving gives your funds more time to grow over the years. This can help you plan your finances better.
What should one consider before buying savings plans?
It is important to chalk out your future financial goals before you buy a savings plan. By doing so, you can decide what type of savings plan you need. Savings policies like the Tata AIA Mahalife Gold can be suitable if you want to earn regular income during the policy term through guaranteed4 annual coupons.
Or, in case you need money for your short-term and long-term goals, you can select Tata AIA Money Back Plus which pays out a survival benefit during the policy term and a maturity benefit on policy maturity. Since the premiums of savings plans are higher than pure life cover plans, consider your financial capacity so your premium payments can continue.
4T&C apply
When does a savings plan offer additional bonuses?
Some savings plans are unlike guaranteed returns savings plans. These policies comprise two types of payouts – a guaranteed return on maturity and an additional bonus / dividend that is non-guaranteed. These bonuses are non-guaranteed because they can only be added to your returns on maturity if and when they are declared. All savings plans do not offer these bonuses.
Do I need to pay for a life cover separately under a savings plan?
No, a savings plan already includes a life cover component. Therefore, the premium you pay on the policy is for savings and life insurance coverage.
What happens when the savings policy matures?
When the savings plan matures, you can file a maturity claim and receive the maturity benefits from the policy. You can receive a lump sum payout or a monthly/regular income, depending on your chosen savings plan.
How does a money-back savings plan work?
A money-back savings plan like the Tata AIA Money Back Plus will start paying out survival benefits from the survival benefits of up to 130% of the sum assured periodically during the policy term starting from the 4th, 5th, or 6th policy year, depending on the plan option chosen.
On policy maturity, subject to your survival during this time, you can receive the maturity benefit, a percentage of the basic sum assured. Hence, money-back plans offer two different payouts – survival benefit and maturity benefit.
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