Financial Planning is one of the best practices every individual should cultivate at early stages in his or her life. Unfortunately, many people do not realize the importance of a savings plan until the exact need arises. One of the popular instruments that help you save, along with offering life cover, is a life insurance savings plan or a guaranteed income plan.
What are Life Insurance Savings Plans?
In a life insurance savings plan, the insurance company will provide a life cover and an assured return. You will be paying premiums which will accumulate as the sum assured for the insurance purpose, and to offer guaranteed returns. The product will give you a clear definition of the assured amount to help you plan your financial goals.
We will understand five important reasons to opt for a savings plan here.
Why should you opt for savings plans in India?
- Manage Financial Emergencies: The global world is engrossed with many uncertainties. Every event will have an impact on your life. An economic slowdown can reduce your income or even lead to the loss of a job. Managing utility bills, children school fees, and other loan payments will go for a toss. Other situations like you come across an accident and get stuck with a huge hospital bill, and car repair cost can also happen. A guaranteed income plan will always help you manage such a financial crisis and secure your family by helping you build a savings corpus and providing easy access to the assured funds. Moreover, the death benefit payout from the insurance component will assist your family in managing the financial crisis arising from your unfortunate demise.
- To pursue long term dreams: Life is not just about earning for livelihood. Life becomes meaningful only when you have great dreams. For example, you wish to pursue post-graduation abroad, plan for a world tour or start a business later in your life. Investments can grow or sometimes fall if picked inappropriately. However, a savings plan will always be a helping hand. You can fund your dreams through the assured returns from a guaranteed returns plan. Also, the life cover component of the policy allows your family to fulfil their goals, even in your absence. Also, by saving money regularly, we develop spending money cautiously, avoiding unnecessary shopping and purchases.
- Down Payments: Buying a new car or a house is a financial goal for most of us in life. A common person will always seek credit facilities like car loan and housing loan from banks to fulfil these objectives. However, in any case, a down payment is always required. If you plan to buy a car two years from now, you should start saving money today! And, the best guaranteed return plan helps you to plan for such payments! You can start investing in a savings plan, ensuring the plan payout coincides with your planned purchases. In case of your untimely demise, the life cover payout can help the family repay the loans and lead a debt-free life.
- Retirement: Most of us do not think and plan for retirement. We earn and spend money to the maximum to enjoy the current life. However, being employed, we get many allowances to manage our utility bills. You cannot expect these privileges to continue in your retirement life. It would be best if you took time, list all your expenses regularly, and opt for a savings plan to help you overcome these expenses effortlessly. There are various savings schemes available to help you get regular income monthly or yearly to suffice such requirements later in your retirement life. It is also your responsibility to provide financial protection to your dependents after your death. Life insurance with a return can be a good solution.
- Inflation: Nobody can predict the nature of inflation under tough economic and political situations. Technological developments are happening on one side, the economy trickling down on the other side. People are the most affected. Prices keep increasing steadily sometimes. An object that is affordable now may turn impossible in the future. Saving money and going ahead, investing the same will help you handle such scenarios better. Additionally, an assured savings insurance plan will provide life cover and savings solution too.
These reasons let us know the importance of saving money. It is also very important that you start saving money at a very early stage in life to reap the maximum benefits. Leading life insurance companies offer guaranteed returns savings plans to help people save money and secure their family’s future. We will have to analyze our income and financial commitments in the long term and short term and work on the right savings plan for a peaceful, happy and secure living!