The constant factor in our lives is the ups and downs that we face. We work hard to achieve all of our goals in the professional and personal arenas. However, achieving these goals may require a decent amount of funding. Along with this, you may come across certain unfortunate events in life without any warnings. Therefore, getting adequate financial backing during such unfortunate times can be quite helpful. One of the ways to tackle these situations financially is by getting a guaranteed savings plan.
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What is a Guaranteed Savings Plan?
Guaranteed savings plans offer the policyholder the benefit of regular savings along with insurance coverage. In a guaranteed savings plan, the premium amount is used to create an endowment that earns benefits while also providing coverage. Many insurance companies offer plans with different features to help the customers purchase the most optimal plan.
For instance, if you opt for the TATA AIA Insurance plan, you can use the savings insurance plan calculator on their website before purchasing the plan. It will help you choose the most optimal plan for yourself. Along with this, you must also consider certain factors when purchasing the guaranteed savings plan.
Keep These Things in Mind When Purchasing a Savings Insurance Plan
Goals and investment objectives
As you build your life, you would want to achieve certain goals at different stages in your life. These goals range from purchasing a home, handling your child’s education and marriage, your retirement etc. Listing these small-term and long-term financial goals will provide you with a certain clarity on spacing the plan across different tenures. Once you have listed down the goals, you must invest in customized savings plans to help you achieve your objectives as they arise in the coming years.
Premium payment term and policy term
You have an option to choose the premium payment term and the policy term. You can opt for a single payment or over a given number of years. This is quite helpful when you have financial commitments coming up at different times. You can align the policy term of the assured savings insurance plan to enable you to create sufficient amounts to meet them easily.
Flexibility and protection
Along with the ability to build a substantial corpus, a monthly savings plan should offer the required financial protection to a policyholder and their family if something happens to them. While an insurance savings plan can be used to build an assured source, it must provide insurance coverage so that your loved ones don’t face any distress after unfortunate events. The plan you choose should also provide you with the flexibility to adjust the premium amount at your convenience.
Payout options
A savings plan should have the perfect mix of returns with enough financial help for unpredictable events. Towards this end, you should consider the return of premium benefit, guaranteed additions, guaranteed bonus, income payout frequency and the income payment period. You can check the information brochure for the guaranteed incomes under the plan for various policy payment terms. Then, you should choose the appropriate payout option depending upon your family’s needs and how they will use the funds.
Tax and additional benefits
The premium amount is tax-exempted under Section 80C. Along with this, the death benefit offered through the plan is also exempt from taxation. Further, you should check for riders for critical illness coverage to enhance the utility of the plan.
Conclusion
Thus, guaranteed savings insurance plans can be quite advantageous. They can help you protect your loved ones and build wealth for yourself at the same time. However, before purchasing the savings advantage plan, you must consider certain factors mentioned above. Keeping these factors in mind during your purchase will help you buy the most optimal plan for yourself.