Life insurance plans are among the best ways to ensure your family is protected if something happens to you. However, when the policy reaches maturity, the benefits of the policy lapse with the policy. Pure insurance plans can be quite beneficial for you.
However, most individuals have to look for other investments to achieve their financial goals. This may be difficult for certain individuals, as it may not fit their budget. This is why insurance companies launched life insurance-based savings policies.
What are Savings Insurance Plans?
Savings plans are a variant of life insurance plans that allow you to build wealth for your financial needs in the future. Along with this, they offer insurance coverage which will help you ensure your family’s financial future is secure even when you’re not around anymore.
With life insurance with guaranteed returns, you get to achieve your financial goals while ensuring your family’s protection. With the guaranteed savings plan, you’ll be at peace knowing your loved ones will be secure. They can be optimal ways to build wealth. There are also a few additional reasons why these insurance plans are good investment options.
Reasons Why Including Insurance and Savings in a Single Plan Will Help You
Given below are some reasons why a life insurance and savings plan will be of benefit to you:
- Insurance coverage and wealth creation: With the insurance plan, you benefit from insurance coverage and regular payouts under a single plan. This way, you will get financial coverage for your loved ones when you pass away.
Along with this, the profits you earn through the plan will be provided to you once the plan reaches maturity or through regular payouts. This way, you get the dual advantage of wealth creation and insurance coverage under a single plan. As a result, you can easily secure your golden years or achieve different financial goals.
- Improves financial discipline: Saving funds over a long tenure can be difficult when you’re dealing with tons of responsibilities. You may feel a bit overwhelmed dealing with monthly expenses, bills, etc. It is easy to lose sight of your financial goals amid these expenses. However, with a savings insurance plan, you will have to dedicate a premium amount towards the policy to ensure the policy stays active.
This way, you will ensure you’re putting aside the amount needed for the savings policy, which will consequently help you build financial discipline. In addition, most insurers like Tata AIA also offer insurance premium calculators to help customers plan their Tata AIA life insurance purchases.
- Flexibility: All individuals have unique financial goals. With savings plans, you get the flexibility to opt for a plan that matches your unique financial goal requirements. In addition, most savings plans offer flexible features which can be adjusted to meet your needs.
For instance, if you’re looking to earn market-linked returns, you can opt for ULIPs. On the other hand, if you’re on the lookout for low-risk investments, you can opt for a savings plan that invests in fixed-income securities, government bonds or corporate bonds. This way, you can achieve your goals as per your preferences.
- Tax benefits: As savings plans are life insurance policies, they offer the same tax benefits as other life insurance plans. You can get an exemption of up to ₹1.5 lakhs on the premium payments as per Section 80C of the Income Tax Act. Along with this, you will get tax benefits on the maturity amount and the death benefit amount provided by the plan.
Savings policies help you get the dual benefit of insurance coverage and wealth creation under the same plan. Along with this, you also get to improve your financial discipline with the plan, as you need to ensure your plan stays active to earn the plan’s benefits. Most savings plans also come with a degree of flexibility to help customers.