With increasing inflation and expenditure, it has become essential to start financial planning for you and your family. Saving money is necessary to have a financial backup in case of any mishap or some future need. Having invested in savings plans, people can be at peace of mind in terms of their family's financial security in case of any financial emergency or in case of any unfortunate mishap like the death of the investor.
Let us understand what a savings plan is.
What is a Savings Plan?
A savings plan is a long-term and low-risk insurance plan that helps the insurer and his family meet the financial requirements in the future in case of a financial emergency or in case of an unfortunate mishap like the investor's death.
Features of Savings Plan
Peace of Mind
Having invested in savings plans, one does not have to worry about future financial constraints and emergencies for their families. Investors can have that extra peace of mind, as a savings plan provides the required financial backup that everyone desires.
Tax Benefits
The premiums paid by the investor are eligible for tax benefits with a maximum limit of Rs. 1.5 lakhs under Section 80c of the Income Tax Act. However, please note that these laws are subject to change from time to time.
Provision of Rider Facility
Most savings plans provide the investors with the option to add rider benefits as well. This further enhances the coverage spectrum of a basic savings plan. For example, with the help of critical illness rider the insured receives a lump-sum amount in the event of being diagnosed with any of the critical illnesses specified in the rider. However, one must keep in mind that riders are not mandatory and come at additional cost.
How a Savings Plan Can Help You Make Wise Financial Decisions
Let us see how a savings plan can help one make financial decisions
Backup for Financial Emergencies in Future
The savings plan will be a financial backup for you and your family in case of financial emergency and constraints like medical and hospital bills, critical illness, or an unfortunate mishap such as the insurer's death. Moreover, saving money in the present will reduce financial stress in future.
Savings for Long Term Goals
Having a plan to save money right now will enable you to achieve your long-term and retirement goals in future. Apart from the future goals of you and your family, you can plan your retirement with ease. You will not have to worry about regular income once you retire.
Tax Saving Benefits
The premiums paid by the investor for the savings plan are eligible for the facility of tax benefits for up to Rs. 1.5 lakh under section 80c of Income Tax Act. Also, under section 10(10D) the amount of sum assured plus any bonus paid on maturity or surrender of the policy or on death of the insured are completely tax free for the receiver, subject to certain conditions. However, tax laws are subject to change from time to time.
The Provision of Liquidity
In case of any financial emergency like critical illness or accident, an investor can withdraw a partial amount of money even if the lock-in period of the savings plan is five years.
Provides Financial Coverage to Your Loved Ones
Savings plan is typically a life insurance product that enables you to save and create a corpus to meet your future needs. These are intended to assist policyholders in developing a regular savings habit while also providing considerable returns when needed.
Which Company to Go for a Savings Plan
While saving money has become highly necessary for future financial security, one should go for an insurance company that is reliable and provides an ideal savings plan for the investor and his loved ones. You should look out for an insurance provider company with saving plans that are ideal for investors.
As per Mr Mithilesh Singh founder of Smarttechtoday, the number of people looking for insurance plans online has surged in recent years. People can find the plan best suitable for their needs and compare different plans in terms of cost and coverage.
