Savings is an essential habit that everyone learns from their parents from an early age. As you grow up, you understand the importance of savings to accomplish your short-term and long-term goals. But saving does not mean keeping aside a portion of the income. You must invest in a good assured savings plan to grow your savings over time.
What is an assured savings plan?
An assured savings plan is a type of life insurance scheme where you save funds for the future in an organised manner and get insurance protection. Thus, it allows you to secure your family’s financial future and build wealth for your future goals. Apart from the opportunity to save funds and insurance protection, the assured savings plan provides valuable returns through guaranteed annual additions and loyalty addition and let you accumulate a significant corpus in the long run.
Important factors to consider while choosing the best assured savings plan
- Assess your goal
Before you join the bandwagon of purchasing an assured savings plan, it is paramount that you take your time to assess your financial goal. Know what your long-term and short-term goals are. This will help you choose the right savings plan and decide how much you must invest to achieve the goal. The goal can be creating a retirement fund, buying a new home, child education, etc.
To fulfil all your financial goals, you must choose a savings plan that gives you the flexibility to select the investment tenure, premium payment term, sum assured, etc. Also, it should allow you to withdraw funds for emergencies or cancel the policy if the situation requires you to do it.
Having said that, it is advisable to continue investing in the savings plan until maturity to get better returns and enjoy tax savings every year.
You cannot overlook the affordability factor. The premium for the assured savings plans you choose must fit within your budget, and you must be able to pay the premium regularly throughout its tenure without compromising on your regular expenses.
Also, the most suitable assured savings plan is the one that allows you to choose the premium payment mode as per your affordability.
Advantages of buying an assured savings plan
- Peace of mind
Since Assured Savings Plan offers insurance protection, you can have peace of mind knowing that your family’s financial future is secure even after you are gone. In the event of your demise during the policy term, the insurer will pay the sum assured along with the accrued returns and annual additions to your family. They can use the amount to care for their everyday expenses and be financially independent.
- Inculcates habit of saving
Typically, assured savings plans are long-term financial instruments. You must pay the premium for about ten years or more as per the premium payment you choose. Thus, you stay committed to saving during this period and remain on track to accomplish your long-term goals.
- Tax benefits
An assured savings plan allows you to enjoy tax benefits. The premium for these plans is eligible for tax deductions up to ₹1.5 lakhs in a financial year under Section 80C of the Indian Income Tax Act. Also, the maturity payout your family receives after your demise is fully tax-exempt.
Now that you know the things to consider while buying an assured savings plan and its benefits, make sure you have it in your portfolio and accomplish all your long-term goals while enjoying the insurance coverage and tax benefits.