Protection and Savings Plan: Everything You Need to Know

What are Protection and Saving Plans?

Financial discipline is an essential aspect that we are often educated about during our teen years. However, we tend to understand its real importance as we enter our 30s. Due to several misconceptions and a lack of knowledge, people are unable to decide the investments they should go for. 

On the one hand, good life insurance coverage early in life serves the investment part. On the other side, the savings part can be dealt with by choosing an appropriate saving policy in addition to a traditional protection plan. This allows one to withdraw the money in case of a financial emergency. 

A savings and protection plan is well known for delivering steady returns and helps you create a pool of funds to fulfil desired life goals like buying a dream house, expenses for child education abroad etc. It serves the combined task of guarding against the uncertainty of life and unforeseen death, as well as an investment procedure for a financially secure future for loved ones. 

This also ensures that no future targets remain unachieved for the family, even in the case of loss by death or disability. Some of the best savings plans in India are offered by reputed companies like Tata AIA life insurance.

Factors to Consider Before Deciding Which is the Best Saving Plan In India

Here are the factors to consider:

  • Setting goals

Every family may have a different set of goals to fulfil in the long term. Defining these goals brings clarity to the purpose and selection of an assured savings insurance plan.

  • Assessing the risk involved

High returns are accompanied by high risks involved in a particular chosen plan. Evaluating the risks involved with various optional plans would best act in favour of the respective individual and their family.

  • Flexibility

Unlike a traditional life insurance policy, a saving insurance plan is flexible to be designed and framed as per the individual requirement. Deciding on the premium payment frequency, payout method, and other features, the most suitable among all can be chosen by the interested party.

  • Plan features

Every plan is associated with multiple plan features, which should be considered before the purchase of an ideal policy. Individuals must look for features like flexible premium payment options, free withdrawals, add-on benefits on online purchases etc.

Why Should One Get A Protection And Savings Plan?

  • Inculcate the habit of saving

The framework of a savings and protection plan helps one value the importance of savings in the event of a financial emergency. This financial discipline is often hard to adapt on our own, especially when living in a spending economy driven by the urge to purchase more and more goods and services.

  • Provides the dual benefit of life cover and regular pay-outs

The inclusion of the savings component in the policy mix enhances the protection of family after death, along with the possibility of regular payouts in case of an emergency.

  • Maturity and tax benefits

An assured saving insurance plan, unlike others, has a twofold benefit. The policyholder receives the amount even when the policy matures. Under Section 80C of the Income tax act 1961, the policyholder enjoys tax benefits.

Conclusion

In short, a savings and protection plan best addresses the financial needs of individuals from different backgrounds and provides a favourable platform for buyers to design their entire future financial life. One should definitely invest in having a life insurance and savings plan which will bring a sense of security to the insured and his/her loved ones. A brief review of the best saving plans in India would definitely aid buyers in getting a better deal.