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nancytreo
by on July 13, 2021
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Do you have any goals you'd like to achieve after you retire? Are you financially prepared for your golden years? All of these concerns are valid because, after retirement, the only thing that ceases to exist is the regular flow of your monthly salary. As a result, you must begin saving now to live an independent, stress-free life. This is particularly important in India, where, according to a survey conducted by PGIM India Mutual Fund and Nielsen, approximately 51% of those polled have no retirement plan.

You are well prepared to meet all of your financial needs if you have a savings plan in place. The plan specifies your life goals and outlines the path to achieving them. It is a guaranteed return plan that ensures your standard of living is not compromised even after you retire. Continue reading if you want to learn more about the plan.

What is a Savings Plan?

A savings plan is a type of financial product that allows you to save with discipline while also providing consistent returns when needed. The systematic investment assists you in achieving your financial objectives. These are primarily insurance plans that provide policyholders with a variety of options for saving and building wealth.

Why do You Need Savings Plan?

Buying a savings plans online enables you to save regularly and be suitably prepared to meet your family's future financial needs. These plans offer a variety of features to park funds for wealth creation based on your risk appetite. Savings plans include a death benefit, which ensures that your policy's beneficiaries are financially stable in the event of your untimely death. This is especially important in case you are the breadwinner for the family.

What are the Different Features of a Savings Plan?

Before purchasing a savings plan, take a look at the features highlighted below.

  • Age and Tenure

The savings plan provides different options based on the policyholder's risk profile. These include:

  • ULIP - These offer high returns as they are market-linked. The younger generation looking for lucrative returns and have a high-risk appetite can enter unit-linked insurance plans (ULIP).
  • Endowment Plans - These are designed for risk-averse policyholders. The returns are low, but the money is secure.

Long-term tenure contributes to the creation of a sizable corpus for the policyholder through the power of compounding.

  • Life Coverage and Riders

The best savings plan in India offers double benefits to the policyholder. It includes life insurance and the investment option. There are add-on benefits available too. These riders must be opted at the time of initiating the plan while some insurers offer the flexibility to opt at a later stage also. Riders can be considered as a tool that enhances your life insurance policy by offering several kinds of health and other benefits to a policyholder.

Riders cover critical illness, accidental death and disability and can also waive off future premiums in case of unfortunate death or disability to the policyholder, thereby ensuring continuity of coverage.

The best savings plans in India provide the policyholder with two benefits.

  • life insurance
  • Investment options

There are also additional benefits available. These riders must be selected at the time of plan inception, though some insurers allow for selection at a later date. Riders are a type of tool that can be used to supplement your life insurance policy by providing a variety of benefits to the policyholder. The benefits include:

  • Critical illness coverage
  • Accidental death
  • Disability
  • Premium waiver in case of disability or death of the policyholder
  • Investment Options

The investment options offered under the best savings plan in India are:

  • Equities
  • Government securities
  • Corporate bonds
  • Money market instruments and more.
  • Charges

When applying for a savings plan online, the policyholder is subject to a variety of charges. Select the plan with minimum fees and flexibility to withdraw and other features.

  • Tax Benefits

A policyholder may avail of the following tax benefits.

Tax Benefit

Amount

Section 80C of IT Act,1961

Premium paid up to Rs.1 lakh per year

        Section 10D of IT Act,1961

      Maturity and Death Benefits

 

In today's uncertain world, a savings plan is required to protect your family while saving for your golden years. The estimated corpus at the end of the policy term can be calculated using a savings plan calculator.

Posted in: Financial Services
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