Savings Insurance Plans in India

What are Savings Plans in Insurance?

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

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

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

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

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

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

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

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

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

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

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 an Insurance Savings Plan?

Factors Affecting Premium of Savings Insurance Plans

Factors to Consider Before Investing in Savings Insurance Plan

FAQs About Savings Insurance Plans in India

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

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?

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?

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?

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?

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?

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?

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