News

Savings Plan: Usefulness And Importance Of Renewal.

Introduction

Save until you earn and earn until you are drop dead!

Life is a vicious cycle of earning to spend and spending because you can. Well not everyone lives with the idea of just spending the money. A few expenses are planned while others are uncalled for. Not all the time you may be financially prepared to bear the brunt of what life offers. This is why savings is important. Keeping money aside regularly can help you save but it will not grow your money. Also, there will be no hopes of receiving any payouts. This is why preparing a fool-proof plan to save money is important. 

The only way in which you can do this is by buying a savings plan. Let us further see how useful and important the renewal of the insurance policy will be?

Table of Contents.

A little about Savings plan

Importance of savings plan renewal

How will renewal of savings plan be beneficial?

How can you boost your savings?

Conclusion

A little about the Savings Plan.

A Savings plan is a life insurance policy that provides you a life cover as well as opportunity of savings. The individuals can collect a reasonable amount of money for the future to achieve long-term or short-term goals. 

The systematic investments under an endowment plan help you in the long run to accumulate funds.

  • The insurance component of the savings plan provides financial security to the family dependents after the life insured passes away. This is the biggest benefit that the savings plan can offer you. 
  • The savings plan offers wealth accumulation. The amount collected in the long run can be used to attain the long-term goal like buying a house or buying a car. You can also use the money saved over years to fulfil short-term goals like planning a vacation abroad. 
  • The premium paid under the savings plan is eligible for tax deduction under Section 80C of Income Tax Act, 1961. This deduction is allowed for the premium amount of Rs.1.5 lakhs in one year.

Savings plans were initially introduced by the Indian government, financial institutions, and public sector banks. These savings plans are low risk financial tools that offer good returns.

Importance of savings plan renewal

Do you use your mind before eating your meals after you ate last?

No right.

Only if you eat, you will get enough energy to work and live. Right?

This is the same case with the savings plan. In simple words, you will be able to accumulate funds for yourself only if you renew the savings plan. 

Once you are done with the renewal, you will continue to receive the benefits. Failing to do so, the benefits under the policy will lapse. 

In case you miss the renewal, the insurance company will give you a grace period of 30 days. Within this period, the benefits will continue to exist but if the renewal is not planned within this time, the policy will discontinue.

Hence the renewal of the policy is important.

How will renewal of savings plan be beneficial?

These are the benefits that you will get after the renewal of the savings plan:

  • The family gets the financial security: It is important to provide financial protection to the family. If you renew the savings plan on time, you will be able to accumulate funds for your family. In case, if anything happens to you, the family will get the sum assured as the death benefit. Not renewing the plan will defeat the purpose of buying the savings plan.
  • Avoid-hassles: If you continue to renew the savings plan, you will not have to get into the formalities of proposal filing and acceptance of it. But if you forget the renewal, you will have to complete all the formalities for a new savings plan.
  • Paid-Up Maturity Benefit: Savings plan fetches you maturity benefit after the completion of the policy period. Without renewing the policy, the maturity benefit will deplete and you will not gain anything. Hence, it is crucial that instead of investing in any other financial instrument, you buy and invest in the savings plan.
  • Long-term benefits: Sparing a portion of your monthly income does not come easy. Not everyone can manage to keep the income aside. This is where a savings plan can help. It assists individuals to accumulate funds for long term benefits like buying a house or buying an SUV or saving for your child’s future goals.
  • Tax Benefits: One year premium payment can be used for claiming tax deduction. Imagine it brought you such a benefit. Now, if you do not renew the policy you will not be able to claim the tax deductions applicable under Section 80C of Income Tax Act, 1961.

How can you boost your savings?

These are the few tips that can help you boost your savings:

  • Spend less: Don’t be miser but be wiser when it comes to spending money. It is important that as a breadwinner in the family, you think of saving money for the dependent in the house. It is relevant that you create a financial backing for the family to rely on especially when you are not there.
  • Always track your monthly expenses: Savings through insurance policy is great. But otherwise also if you can put money aside it is going to be a plus. Track the monthly expenses and see where you are spending more.
  • Create a budget for the month: Create a budget before you start spending. It is smart when you observe your expenses,create a budget and then save money.
  • Buy a guaranteed savings plan: You can put your money in buying a guaranteed savings plan. Investing your money can bring additional advantages like you can get to earn maturity benefits (bonuses and guaranteed benefits).

Best Savings Plan.

Some of the best savings plan that you can buy include:

  1. ABSLI Assured Savings Plan
  • ABSLI Assured Savings Plan provides life cover and the benefits of savings to safeguard your family. 
  • The savings plan provides guaranteed benefits on death or maturity. 
  • Under the savings plan, you also get loyalty additions that enhance your maturity corpus year on year. 
  • The savings plan gives multiple policy and premium payment options.
  • You can buy the policy online from here.
  • ABSLI Guaranteed Milestone Plan
  • ABSLI Guaranteed Milestone Plan offers life cover and guaranteed financial benefits on death or maturity 
  • The insurance companies provide guaranteed additions that boost the savings corpus.
  • The policy gives an option to get the spouse covered in the same policy. 
  • The guaranteed milestone plan will offer you sum assured on maturity and accrued guaranteed additions.
  • The buyers can increase the scope of the cover by choosing riders at an extra cost. 

Conclusion

It is wise to invest your hard earned money in a savings plan especially that comes with the guaranteed savings. This type of savings insurance policy or endowment plan offers you guaranteed benefits along with death benefits. The maturity benefit includes the loyalty additions and bonuses as declared by the insurance company. So, if you are on the lines to invest in the savings plan, you are in the right direction. For more details on the savings plan, read here.

Related Articles

Leave a Reply

Back to top button