The pandemic has made us all realize the importance of emergency funds, good savings, and insurance plans.
Hence it is essential to invest in good saving insurance plans. These plans help you cover your family’s needs, even when you are unable to be there for them.
A saving plan helps you plan for major life goals. There are many types of such plans that are available for your loved ones.
One such life insurance is a Saving Insurance plan. They are a way of saving for the future. It is a combination of investment and insurance.
This type of plan is used to give your family a headstart in life, with financial security in place. This article will teach you all about how these plans work and how they can benefit your family.
What Is a Saving Insurance Plan?
They are a way of saving for the future. A Saving Plan provides financial safety by creating a pool of funds over time for various events like child’s marriage, higher education.
Such plans can help your family secure your child’s future in case of your untimely demise.
These plans also provide a lot of flexibility in choosing cover payout.
With such a safety net, you ensure your family leads a happy life, without any worries of financial instability.
Canara HSBC Oriental Bank of Commerce Life Insurance, ICICI life insurance, HDFC life insurance are some of the best saving insurance plans available in the market.
How Do These Plans Work?
Like most of the plans in the market, you must pay regular premiums. This money is put into a chosen plan of your choice.
The money in the plan will grow over time and create a safety corpus for your future goals.
The contributions can be made in the following ways
1. Limited Pay
The contributions are usually structured to be made for a limited time.
2. Single Premium
The contributions are usually structured to be made lump sum for the plan.
3. Regular Pay
The contributions are usually structured to be made monthly basis, quarterly basis, or yearly basis
Types of Saving Insurance Plans aka Child Investment plans
Many insurers provide various riders with these plans to suit the needs of the client.
There are 3 major types of saving plans –
1. Child endowment plans
It is one of the safest child investment plans that provides maturity and stability. Plans like Jeevan Nivesh by Canara HSBC Oriental Bank of Commerce Life Insurance provide guaranteed benefits. It also offers goal protection and financial safety even in your absence.
2. Child Money Back plans
It offers a safe investment option that grows as rapidly as your child. Money Back plans are best if you need money multiple times for a certain time. These plans are quite famous as they provide life cover and a portion of the assured sum to manage future expenses.
3. Child education plans
This plan offers more freedom as an investor. You can make use of various portfolio strategies offered by the plan to grow your funds quickly. These plans also offer additional bonuses if you’re a long-term investor.
Features of Saving Insurance Plan
These plans are quite versatile and provide a lot of features and convenience to the insurer.
1. Life Cover
One of the crucial aspects of having a life cover means that the policyholder will always be protected. In any case of unfortunate or untimed demise, the cover amount helps protect and secure the family.
2. Goal protection
Some plans like the Smart Future Plan by Canara HSBC Oriental Bank of Commerce Life Insurance provides extra safety by investing due premiums in your goals. This means even in your absence your goals are always protected and cared for.
3. Systematic withdrawals
These plans offer you the option of withdrawing money in the final phases of your policy. It simply means that as your requirements grow, you can easily meet them with easy withdrawals.
4. Loans and Partial withdrawals
Difficult time always comes unannounced; hence it is essential to be prepared beforehand. In any case of emergencies, you can take a loan against the policy without stopping your investment. Some ULIP plans also provide partial withdrawals.
5. Premium waiver
In any case of the demise of the policyholder, the beneficiary gets the assured amount. On top of it, the remaining premiums are waived and paid by the company till the maturity date. This feature assures the policyholder that even in his absence his family will not suffer on the financial front.
The Benefits of Saving Insurance Plan
Following are the benefits of investing in child investment plans
- The first is that they provide a chance to save. With these plans, you can set aside money for the future and watch it grow over time. This means that you could eventually have enough saved up for your child’s future needs, such as college tuition and other expenses.
- You can beat inflation by using various automated portfolio strategies.
- In addition to providing a death benefit, investments in these plans also provide tax benefits. Investing in such plans is deductible from your taxable income under section 80C. You can save up to 1.5 lac INR by subscribing to saving insurance plans. You also get Tax-Free Maturity Value and Tax-Exempt Partial Withdrawals
What’s The Eligibility Criteria for Saving Insurance Plans?
The minimum age of entry is 18 years, while the maximum age of entry is 65 years. The maturity age of the policy ranges from 23 years to 80 years. You can start with as low as 5000 INR per month, while the policy period varies between 5 years and 30 years.
A Saving Insurance Plan is a form of life insurance that provides a death benefit. Investments in these plans grow tax-deferred, and the funds can be used to pay for the child’s education, marriage expenses, or loan repayment.
There are many companies in India offering such saving plans at competitive prices. Do online research to get the best one for your needs right away.