Savings Plan Online in India

Listen to the Audio Overview of This Article

What are Savings Plans in Insurance?

  • Savings plans, particularly in the realm of insurance, are comprehensive financial instruments designed to combine the benefits of insurance protection with the power of systematic savings.
  • These plans offer the opportunity to secure your financial future by creating a corpus over time and at the same time ensuring protection for your loved ones. They provide a systematic approach to investing, allowing policyholders to customise their plans to their specific financial goals.

Features of Savings Insurance Plans

The savings plans have a range of essential features that provide policyholders with a robust foundation for their financial goals.

Some of the major features are:

Dual Benefit of Saving and Insurance

Dual Benefit of Saving and Insurance

Savings plans offer the twin advantage of insurance coverage and systematic wealth creation, thus ensuring financial protection and growth.

Flexible Premium Payment

Flexible Premium Payment

These plans allow you to choose from various premium payment options like monthly, quarterly, half yearly and annually, depending on your convenience, thus enabling customization based on your financial capacity and objectives.

Assured Maturity Benefits

Assured Maturity Benefits

On the plan's maturity, policyholders receive a guaranteed maturity benefit. Some savings plans also offer bonuses and other guaranteed additions, thus enhancing your corpus and providing financial support for major milestones like child education, retirement, and other major expenses.

Death Benefits

Death Benefits

A savings plan provides life coverage, thus ensuring financial security to the family in case of unfortunate demise of the policyholder during the policy term.

Loan Facility

Loan Facility

Depending on the plan, policyholders might have the option to avail loans against the policy, providing financial flexibility in times of need.

Additional Riders

Additional Riders

You can add riders like critical illness, or disability cover to your savings plans to enhance its coverage.

Benefits of Savings Insurance Plan

The benefits of Savings Plans are numerous and cater to diverse needs of investors.
Here are some of the key benefits:

Financial Protection

Financial Protection

Savings plans provide a financial protection, ensuring that your family is financially secure even in your absence. They offer a substantial death benefit in the event of your unfortunate death, thus safeguarding your family's financial well-being.

Tax Benefits

Tax Benefits

These plans offer tax benefits under sections 80C and 10(10D) of the Income Tax Act, as per the prevailing tax regime.

corpus building

Corpus Building

A perfect financial solution to build a corpus for various financial aspirations.  Through systematic savings and the power of compounding you can build substantial amount to meet your financial goals. Thus, you can enjoy your golden years, go on a dream vacation or fund your child’s higher education without any financial worries.  

Disciplined Savings

Disciplined Savings

With a savings plan, you commit to regular premium payments. This fosters a disciplined approach to consistent savings, thus promoting responsible financial management.

Who Should Opt for Savings Insurance Plan?

Financial planning or savings, both are crucial aspect in anyone’s life at any given stage, such as marriage planning, child planning, retirement planning or any other life stage.

Hence, a savings plan is a product relevant for different people, at different life stages and different income levels:

financial planners

Financial Planners

If you wish to build a financial cushion for your family or for your future goals, a savings plan is a wise choice. It's a systematic way to save funds over time, ensuring that you are prepared for upcoming milestones or unforeseen expenses.

young professionals

Young Professionals

Starting early is the key to reaping compounding benefits. Young professionals, who have just started earning, can invest in a savings plan to secure their future. It provides the dual benefit of financial protection and savings, helping you be right on your path towards a stable financial future.

parents in 40s

People with Dependent Families

Ensuring the security of your family is paramount. With savings plan, you can have a safety net, ensuring that your loved ones are protected financially, and at the same time helping you save systematically for their future needs.

long term investors

People with Well Defined Long-Term Goals

If you have some defined long-term financial objectives, like buying a house, starting a business, or a comfortable retirement, a savings plan can be the answer. With a savings plan in hand, you can save over a period of time to reach your goal.

risk averse investors

Risk-Averse Investors

For the risk averse investors, who wish to balance risk and return, the savings plans are the perfect choice. They provide the dual benefit of insurance coverage alongside a savings component, thus ensuring your family's financial well-being.

Factors Affecting Premium of Savings Insurance Plans

The premium that you pay towards a savings plan depends on a lot of crucial factors as below:

age

Age

The chances of age-related illness and passing away increases with age. Hence, the premium of your insurance also goes up with age. So, it is prudent to buy insurance at a young age and lock the premium.

Sum Assured

Sum Assured

If you opt for a higher sum assured, you pay a higher premium. Choose an optimum sum assured that is just sufficient for your financial goals.

Lifestyle Habits

Lifestyle Habits

People who smoke or drink alcohol excessively have a higher chance of contracting critical illnesses or even premature death. Hence, insurance premiums for them tend to be higher than for non-smokers/drinkers.

Medical History

Medical History

A history of illness for self or hereditary diseases that run in the family like diabetes or cardiac issues, may raise a risk of potential illness and thus increase the premium.

Occupation

Occupation

Some occupations such as mining, carry more life risk and thus attract more premium.

Factors to Consider Before Investing in Savings Insurance Plan

Before investing in a savings plan, you must consider several important factors. Some of these major factors are:

  • Goals: Have a thoughtful evaluation of your short-term and long-term financial goals. Set them if they are not yet, like buying a house, higher education, retirement planning or a dream vacation. Select a savings plan that aligns with these aspirations.
  • Risk Tolerance: Assess your risk appetite and choose a plan that aligns with it.
  • Flexibility: Check if your plan allows you to withdraw money if needed. Also, check for flexibility in premium paying options. Thus, aligning your budget with the financial commitment and making sure, you have the liquidity in case of unforeseen circumstances.
  • Policy Tenure: Evaluate the tenure of the plan. Make sure it aligns with your financial goals' timelines, offering you the required duration for wealth accumulation.

Read More

1. Record-Breaking Days

Talk about a busy day! We issued over 1.7 lakh policies on September 28, 2024. Our systems were operational even at late hours, issuing over 1,100 policies at 1:08 AM on December 7, 2024.

2. Our Growing Family

The average age for people joining the Digit Life insurance family in FY24-25 was 34 years old, a slight nudge up from 33 years previously.

3. Premium Extremes

Talk about range! We saw an annual premium as high as ₹35 lakh for our Digit Icon product, while we also issued policies for as little as ₹143 for a 2-year Digit Life Group Micro Term Insurance

4. More Women Protected

We saw a 1.2% increase in female lives covered this FY, with women now making up 49.89% of our total covered lives, up from 48.77% last year

5. Flexible Premiums

We've got options! Some folks opted for monthly premiums as low as ₹50 per month, while others chose the monthly premium category for a policy with an annual premium of ₹2.3 lakh (roughly ₹19,000/month).

FAQs about Savings Insurance Plans in India

Should I Pick a Long Term or a Short-Term Savings Plan?

up-arrow
The answer to this depends completely on your financial goal. For a short-term goal like a vacation, you should pick up a short-term savings plan. However, for long term goals like planning for your retirement or your child’s higher education, you can look at investing in a long-term savings plan. However, Savings Plans are traditionally designed for long term investments and give optimum returns when kept invested for a long time.

How do Savings Plan Work?

up-arrow
In a savings plan, a portion of the premium paid by you goes towards insurance coverage, while the other portion is invested to grow over the policy tenure, offering potential returns.

Can I Customize my Savings Plan?

up-arrow
Yes, most savings plans provide customization options. You can choose a suitable coverage, premium amount, premium frequency, etc. as per your choice.

What are the Tax Benefits Associated with Savings Plans?

up-arrow
The premium paid to, and the payouts received from savings plan provide tax benefits under section 80C and Section 10 (10D) of the IT Act as per the prevailing tax laws.  

Can I Withdraw Money from my Savings Plan Before Maturity?

up-arrow
Most Savings Plans offer the choice of partial withdrawal or surrender after a stipulated period. However, it does affect the final maturity amount.

Can I Nominate Multiple Beneficiaries?

up-arrow
Yes, you can nominate multiple beneficiaries in a savings plan. The sum assured will be distributed among them in case of your demise. 

Can I Take a Loan Against my Savings Plan?

up-arrow
Certain savings plans offer the option to take loans against the policy's surrender value, providing liquidity in times of need.

How do I decide between a savings-linked plan and a pure term plan?

up-arrow
Use a term insurance calculator to check your coverage needs. If protection is your goal, choose a term plan. If you want to return along with life cover, a savings-linked plan works. Sometimes, buying both separately is cheaper and better.

Should I choose a 1 crore term cover even if I already have a savings plan?

up-arrow
Yes, because savings may not cover large expenses like loans, education, or family needs in your absence. A 1 crore term plan ensures your family's lifestyle doesn't suffer even if you are not around, or have been saving regularly.

Can I use my Savings Plan to cover health-related expenses?

up-arrow
While a Savings Plan can help build funds for future needs, it's wise to have dedicated health insurance to cover unexpected medical expenses. Health insurance provides coverage specifically for health-related costs.

Latest News

Currently there are no news to show.

Read More

Renew & Download Policy Document, Check Challan, Credit Score, PUC & more

Anytime, Anywhere. Only on Digit App!

google-play-icon

Rated App

app-store-icon

Rated App