Financial planning with the right products and strategy will help you plan your investment wisely and timely. There are different types of savings plans in India. However, considering your importance as an earning member in the family and the financial liabilities, you may refrain from choosing a savings plan and securing funds in it regularly. A savings insurance plan is a comprehensive life insurance plan that becomes significant in such scenarios.
Let us find out what a savings insurance plan means and how you can plan your investment with it during the long term.
What Is A Savings Insurance Plan?
A savings insurance plan is a type of life insurance plan that provides dual benefits – life insurance and savings options. Life insurance will protect your loved ones in the event of your unexpected demise, and the savings options will provide a guaranteed return as the maturity benefit.
In addition, the savings insurance plans provide various flexible features. For example, Tata AIA insurance provides flexible features such as the regular premium payment option, limited premium payment option, regular income payout benefit, lump sum payout benefit, etc. Therefore, you can customise the savings insurance plan based on your financial conditions to plan future investments effectively.
How To Plan Your Investment With The Savings Insurance Plan?
While there are different options for using various savings schemes, choosing them right based on your investment goals is critically important.
Here are a few steps to help you plan your investment with the savings insurance plan.
- Define your financial goals with timelines – Identify your goals and the timelines required to accomplish them. For example, you could purchase a new house after 5 years, start a new business after 10 years, retire with a lump sum after 20 years, etc.
Savings insurance plans provide the option to invest in them long-term. Therefore, you can decide on the timelines and stay invested for the entire policy tenure to suffice the needs.
- Estimate the requirements – Based on the money goals, calculate the funds required to accomplish them, considering the inflation rate. You can utilise the savings calculator provided by the online insurers to help determine these values based on your annual income and financial goals to choose the best savings plan.
And as the returns are guaranteed in the savings insurance plan, you can decide the policy tenure based on the premium you can afford to pay to accumulate the necessary funds and choose the appropriate product.
- Decide on the premium payment option and the payout option – You can pay the premium regularly for the entire policy tenure or a limited term for the savings and investment plan. In addition, you receive the payout at maturity as a lump sum, regular income for a defined income period, or a combination of the regular income and lump sum based on your financial goals.
For instance, if your investment is to assist you financially to start a new business after five years, you can choose the payout option with the combination of lump sum and regular income. The lump sum can help you start the business, and the regular income can provide a source of income for a definite period until the business stabilises.
- Revise the savings insurance plan – If your insurance provider offers the option to revise the savings insurance plan periodically, utilise the option to revise the features based on the changing demands and requirements.
These simple steps can help you plan your investment based on the flexible features of the savings insurance plan. Therefore, evaluating such options, comparing the different products, and choosing the best investment savings plan for all your financial needs is important.
A savings insurance plan is a comprehensive life insurance plan that provides life insurance and savings benefits. It offers a range of flexible features to help you customise it for accomplishing your investment plans. Therefore, identify your financial goals, estimate the requirements and timelines, and decide on the premium payment and payout options to plan your investment with the savings insurance plan.