Youth Incorporated Magazine

We all rely on having certainty in our lives. This ensures that we are stable regardless of whether it has to do with our finances or our lifestyle. However, that doesn’t mean there aren’t a few setbacks that creep up every now and then. To help combat these uncertainties, we look towards investing in a savings plan.

As one of the simplest and easiest forms of life insurance policies, a term insurance plan is a simple method through which any applicant can avail a coverage amount for a fixed term of years.

Another method to help ensure a stable environment is to invest in savings plans. Unlike a term insurance plan, guaranteed income plans are a form of savings plan that offers you a guaranteed payout for a definite period. This plan also falls under life insurance policies and is often seen as a way to ensure extra financial stability as well as a retirement plan.

Why choose a savings plan?

Though there is a wide range of insurance policies that provide adequate payouts, it boils down to choosing the plan that can give you the most benefits without any hassle. Even with the various savings plans as well as policies that banks provide for their customers, it is sometimes impossible to find one that provides the same amount of continuous stability that one has whilst still earning.

That is why choosing a savings plan not only provides you with an additional set of income every month, the income generated can act as a secondary source to ensure financial stability.

For those unaware, here are a few key features of a savings plan:

• It is tax-free: The best thing about this plan is that it is tax-free and it holds other tax benefits as per the Income Tax Act, 1961. The plan focuses on giving its policyholder a monthly income after the premiums have been paid completely.

• The plan doubles the income: By holding this plan, you pay a certain amount of premium that matures over time. Once fully paid, the plan gives a payout that can resemble your salary for a fixed period. This payout is divided into two parts. The first being the chosen monthly income and in the second part, the income gets doubled.

• Receive immediate payout: There are a lot of saving plans that do not start giving the payout for a few years even after the premium has been fully paid. However, with this plan, the payout is immediate without the policyholder having to wait after the premium has been fully paid.

• Protection of the plan is guaranteed: Just like with a term insurance plan, the savings plan also has guaranteed protection. This ensures that the plan is or can be passed on to the nominee decided in case the original policyholder dies. They will either receive it as a lump sum or continue as a monthly income for the next ten years.

• Easily accessible: One of the key components of most savings plans is that they follow a fixed payout schedule. However, there are instances when you may require a large sum of money. In such cases, a person can select the option of taking it as a lump sum after the maturation of the monthly income.

How savings plans can help you make money

Though the main idea of any savings plan and policies is to help a person increase their financial benefits after a fixed period, there are only a few that provide you with the best amount of payout. As we have seen, savings plans are one of the few. Here are a few benefits of buying a savings plan and how it can help you generate extra money:

• Additional source of income: There comes a point in life where the financial stability you once had is not there anymore. However, with the help of this plan, not only do you receive an alternative and additional source of regular income, but the plan also ensures that you do not have to work after a certain time after the premiums have been paid.

• Ideal Maturity Benefits: The maturity benefits of any savings plan are extremely important. These benefits allude to the maturity period and how well the policy has matured. Oftentimes, it is difficult to have a savings option as many do not have the certainty of being safe. However, with savings plans, you can save up and enjoy it without any worries.

• Establishes family security: The best part about buying this plan is that it not only benefits you but your family as well. The financial stability of any household is often dependent on one person. With the help of this plan, you can have a backup option to turn to in case of dire situations. A lot of banks tend to waiver the remaining premium in case of the death of the original policyholder for the remainder of the policy duration.

• Works as a loan benefit: There are times when a loan is required for emergency situations. Savings plans can also be used to receive a loan once it has reached the surrender amount. The loan taken can amount up to 90% of the surrender amount, acting as a backup plan in dire situations.

With the number of banks and agencies that offer not only a term insurance plan but also Savings Plans available, it becomes difficult to choose one that is ideal for you. Canara HSBC Oriental Bank of Commerce Life Insurance is one of the few companies that provide different types of life insurances and ensure that their customers receive only top plans that offer the best benefits and payouts. The company works towards allowing a person to enjoy a steady financial structure even when situations become difficult.