How to Save With Savings Plans?
To depend 100% on your monthly salary is a financial catastrophe. Irrespective of your salary package, you need to invest. The investment destinations could be stocks, mutual funds, bank fixed deposits or even savings plans; what’s needed is that you invest.
All these products help you create wealth over and above your monthly salary. Take savings with life insurance, these plans offer the double role of protection and savings and make sure you leave with a good amount in your kitty. Here’s a bit more about this smart product.
1. What are they?
These are basically endowment plans. When someone invests in such a plan, not only is the policyholder’s life insured but the plan assists her/him to save money for a period of time. If the policyholder survives the plan tenure, a lump sum amount is paid out that can be used to meet financial needs such as education, buying real estate, clearing off debt, or marriage.
2. Advantage of ‘Assured’
If you look at other investment plans such as an ULIP or ELSS, no financial advisor or broker will assure your returns. With savings plans, they will. The regular premiums you pay will return to you in the end as a lump sum amount and because there is no linkage to the markets, you can remain stress-free.
3. Tax-Benefits Leave You with More
An excellent benefit of these plans are the tax benefits on offer. You can avail deductions on premium paid under Section 80C of the Income Tax Act. For deductions on the amount received upon maturity, there is Section 10(10)D for exemptions. Post deductions, you are left with a healthy amount.
4. Helps with Goal Setting
To create savings and build a healthy corpus, investments mapped to goals is necessary. With goals, you know how much you need to invest and where to invest. The best savings plan help you meet these goals. With their guaranteed returns feature, you can map out the plan tenure to a certain life goal.
5. Life Protection
In all the talks of guaranteed returns, we should not forget the basic tenant of a life insurance plan—life protection. If an insured expires during the tenure, expect their nominees to receive the sum assured. They can use it to maintain their standard of living and this death benefit is tax-free as well.
The next time you decide to save for a certain goal, choose this plan. With the benefits of life protection, assured returns, and tax benefits; you can sit back and relax while the plan does all the savings for you.