Planning for the betterment of your life is always an ongoing process because you can’t know about the various incidents that are likely to happen during your lifetime and investing in a saving plan will reap benefits that will enable you to fulfil your goals.
While some of your goals may be dependent on your skills rather than monetary requirements, certain aspirations can only be achieved with an adequate sum of money. From your child’s education to your marriage, the possibilities are simply endless.
If you want to ensure that you’re capable of achieving all your future milestones, you must plan for monetary resources to support your needs in the future. A guaranteed savings plan is a great option to leap ahead in your financial capabilities.
Everyone wishes to provide a hassle-free and bright future to their families in their absence, and with the consistent saving structure of this plan, you can always make sure that your family’s future is covered with firm protection of monetary help.
Additionally, while term insurance plans are preferred most by the people because of their popularity and tax-saving benefits, the reliability and flexibility offered by saving plans, you can efficiently save money with the assurance of gaining proper returns.
Regardless of the reason, even if you outlive the tenure of your plan, you’ll still receive benefits and funds, which make it a much more feasible and safer option as compared to other financial policies. Let’s begin with a quick introduction to the topic:
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Guaranteed Savings Plan – What Exactly Is It?
Typically speaking, the non-participating plans that offer an endowment assurance based on a specified amount are known as guaranteed saving plans. It requires you to pay premiums for a fixed period, and after the maturity of the plan, you’ll start receiving benefits associated with it.
It offers you an assured sum on all the premiums you’ve paid after the ending of the plan’s term, along with several other beneficiary additions. Talking about the additions, it may involve a predefined rate of interest, added every year during the term of your contract.
Furthermore, there’s also a maturity bonus along with the fixed commencement that provides you with a lump-sum amount of money added to the finalized sum at the end of your plan’s term. What’s even better, you can also avail of tax benefits with this plan.
According to the Income Tax Act, the current taxation laws in the country permit people with a savings plan to enjoy a tax-free lump-sum amount at the end of their contract. Before signing up for this plan, you need to specify the time duration for the maturity according to your preferences.
Once it gets matured, you’ll receive the final amount that’s calculated as a sum of the rate of interest and the premiums paid throughout the tenure. In case you die before the maturity of the plan, your selected nominee will be able to receive all your promised funds.
4 Unparalleled Benefits Offered by Guaranteed Savings Plans
When you choose a guaranteed savings plan, you’re assured of gaining numerous benefits, that may differ from vendor to vendor. Moreover, you can also customize the plan according to your requirements. Here’s a list of key benefits offered by a saving plan:
1. Loans
The savings plan allows you to get a loan for your financial needs that can be only availed when the policy reaches a surrender value. While the amount of loan may differ on the policy sum and your choice of bank, there is a minimum value of INR 20,000 and a maximum value that equates to 80% of the surrender value under your plan.
2. Death Benefit
A lot of service providers and banks also offer a death benefit clause as a part of the savings plan. With this benefit, your chosen nominee can gain a specified amount of money in case of your sudden demise due to various reasons.
To be eligible for this benefit, your policy needs to be ongoing during your death. The best thing about this benefit is that the sum assured offers you a comparatively higher rate of interest than a standard life insurance policy.
3. Premiums
The plan allows you to pay your premiums in two different ways – either at a single shot or a specified period. With these options, you can make sure that the premium payments don’t feel like a burden, and make the process easier for you. For instance, if you don’t want to deal with the responsibility to remember due dates for your premiums, you can pay them all at once.
4. Guaranteed Maturity Benefits
As per the general guidelines of a guaranteed savings plan, you’re destined to receive several benefits after the maturity of your plan. The assured sum given to you will be the same as stated in the contract before you planned the commencement. However, it’s only applicable when you survive till the end date of your term.
How to Compare Providers for Savings Plan?
Several factors differentiate savings plans offered by different companies. Therefore, you need to make sure that you do your research and determine which plan helps you meet your financial goals faster. Here’s a helpful list to get you started:
- Premium Paying Term
- Sum Assured
- Minimum Age Criteria
- Yearly Premium
- Additional Benefits
If you’ve been recently introduced to corporate culture and received your first paycheck ever, you might not consider a savings plan as a necessity for now. However, regardless of your work-life duration, you should never overlook something as crucial as savings.
The Takeaway
As said in a famous quote – a penny saved is a penny earned, the financial savings you make in your adulthood will surely help you during your difficult times in the future. By considering a saving plan for you and your family, you can easily get prepared for any financial burden that you may encounter shortly. Make sure you compare every company before choosing an ideal plan.
