One of the first things that we learn from our elders once we have an understanding of money-saving is ‘Spend money only when required’. The same principle is applicable even today, as each one of us strives hard to make the best out of our savings. Savings Plans or endowment plans are a popular form of life insurance policies that are ideal for investors that are averse to risks.
The confusion that many investors have is the reason behind choosing savings plans over other forms of life insurance plans. By the end of this article, you would be in a good position to invest in the right kind of savings plans as we look into critical aspects of savings plans.
What are Savings Plans?
A savings plan is an ideal investment vehicle that offers the benefits of life insurance, along with offering investors an opportunity to save and accumulate funds for a good future. Savings plans also inculcate the habit of regular savings, which is very important in a time when many people spend mindlessly on experiences (that are not worth it).
Opting for the right kind of savings plans like Protection and Savings Plans from ICICI Prudential Life Insurance not only helps in building long-term savings but also provides the benefits of life insurance. The right type of savings plans should be a part of every investor’s portfolio.
Key reasons to invest in a Savings Plan
To know why to invest in Savings plans, we have a look at the top reasons why Savings plans are an ideal investment option:
Regular Savings
As per the plan, you are expected to pay regular premiums at a certain time interval. Hence, savings plans bring financial discipline in your life. It eventually helps in achieving your goals.
Coverage and Returns
Most forms of life insurance do not offer benefits if you survive for the entire term of the insurance. On the other hand, savings plans offer guaranteed payouts and do not depend on market volatility.
As a savings plan is a life insurance product, it offers coverage to your loved ones in case of your untimely demise. Hence, your dependents and loved ones need not compromise on their lifestyle due to the policyholder’s demise.
Better flexibility
Saving Plans are fixed interest plans and the need of every investor is different and this difference shows up in their financial portfolio. Protection and Savings plans from ICICI Prudential Life Insurance take these factors into account so that you can fine-tune the savings plan as per your requirement.
Tax Benefits
As it is an investment product, you can avail of tax exemption up to ₹ 1.5 Lakhs as per Section 80 (C) of Income Tax Act, 1961.
Conclusion
Apart from these benefits, many insurance companies also offer loans and bonus depending on the type of savings plan. Savings plans offer guaranteed returns and are a much safer investment option when compared to mutual funds or stocks.
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