Saving money is crucial for achieving both short-term and long-term financial goals. Your goals can include building an emergency fund, saving for a vacation, and down payment for your first home. Directed to the best savings plans this money prepares you for emergencies and bigger goals in life.
What is a Guaranteed Savings Plan?
Guaranteed savings plans are life insurance cum savings plans which offer this guaranteed financial support to you and your family. You get the guarantee of funds upon:
- Maturity of the plan
- Demise of the policyholder within the policy period
Saving plans like iSelect Guaranteed Future from Canara HSBC Life Insurance guarantees the maturity value even after the early death of the policyholder. This kind of guarantee is possible as the insurer will continue to invest in the plan on the behalf of the policyholder after paying the death benefit to the beneficiary.
Thus, guaranteed saving plans not only help you prepare for your future but also provide you with a contingency umbrella.
How to Grow your Portfolio with a Guaranteed Saving Plan?
There are a few goals in life that you cannot leave to chance. These goals can include ensuring a good education for your child, their marriage, and financial security for the family. You would want to ensure that such important goals are achieved no matter what. Saving plans help you save a fixed amount regularly are better as they help you build a habit of saving money.
- Set your savings target: Setting your goal is the first and foremost step. This is especially important with guaranteed savings plans, as the plan can only guarantee to help you create a corpus with a specific amount as per your goals.
- Assess present savings state: Present savings rate will indicate how much you cansave every month without affecting other financial goals and savings. It also helps you determine: How much time it will take for you to achieve the goal? Or, how much of your goal you can achieve within the years you have for the goal?
- Determine monthly commitment: Considering available monthly savings, determine the monthly sum that you can or want to commit to the guaranteed savings plan. This also helps you determine the duration of the plan.
- Set a timeline with a savings calculator: A savings calculator will help you determine your investment term for the plan to achieve your goal. The investment term is the period for which you need to invest in the plan regularly. Remember that the investment term will always be lower than the policy term.
- Automate the Saving: Last but not the least, try to automate your premium payments towards the policy. You can use your credit card to ensure timely payments as it will allow for maximum policy benefits.
Features of a Guaranteed Savings Plan
Various features of a guaranteed savings plan offer different benefits in terms of liquidity, safety and growth of your investment. Here are a few important features to consider while choosing a guaranteed savings plan:
Guaranteed Bonus: Assured benefits payable on maturity if all due premiums have been paid.
Life Cover Term: It provides life cover for the entire term even if you pay the premiums only for a limited period.
Premium Protection Benefit: In case of life insurance protection via lump sum payment of benefit on death, all the remaining premiums need not be paid, and guaranteed benefits payable on maturity to your family.
Premium Payment Term: A best guaranteed savings plan should give you the choice of premium payment terms that can closely align with your existing payment capacity and horizon.
Choice of Policy Term: It allows you to customize your savings horizon to your critical financial goals with multiple policy term options to help you select the best- suited policy term that is resonated with your financial goals.
Bonus for Higher Premium Payment: It gives you enhanced value for a higher premium commitment with a High Premium Booster to make sure that you get extra benefits for committing a higher premium.
Regular Income/Pay-out Option: The plan should offer you annual payments for a few years before maturity if your goal requires you to spend money for a few years. You also need to ensure tax benefits on premiums paid along with benefits under Section 80C and Section 10(10D), as per the Income Tax Act, 1961.
Sometimes Guarantee Is All You Need
You need guaranteed savings to plan to make sure that your savings are consistent and fixed. It will keep you prepared for all contingencies, and attaining specific financial goals.
The best savings plan is suited for meeting the following financial goals:
- Your child’s wedding
- Buying a home
- Home repairs or improvements or renovations
- Purchasing a vehicle
- Higher education of the child
- Retirement savings
Initially, you require a life insurance plan that enables you to save regularly to reach your objective. Additionally, you want a life insurance plan that will help your family goal even if any unfortunate thing happens to you.
Devising a realistic budget can come to your aid in developing a consistent and effective savings plan. Automating deposits into savings or investment accounts can also prove to be a great option to avoid spending money that you could easily save. Regularly reviewing your savings plan can also help you estimate your improvement and decide whether any adjustments in the plan are necessary. The right savings plan keep you prepared for financial emergencies without messing with your future.
(ThePrint ValueAd Initiative content is a paid-for, sponsored article. Journalists of ThePrint are not involved in reporting or writing it.)