In India, parents teach their children about the importance of savings and encourage them to save from a young age. As grown-ups, we all realise its importance too, right? Savings helps us accomplish long-term goals. And, so you must invest in the best guaranteed savings plan.
Generally, people put a small portion of their income aside and invest it in a savings plan regularly with the hope of building a sizeable corpus for the future. While investing in a savings plan is an excellent choice to secure your loved ones’ financial future, you must choose the right plan to make the most out of it.
In this write-up, we discuss a few critical things you must consider while choosing the best guaranteed savings plan.
Long-term financial objectives
One of the most critical factors you must consider while buying the right guaranteed savings plan is your long-term financial goals. The plan you buy must align well with your objectives.
For example, if your goal is to save funds for your child’s education needs. You may need to choose a short-term policy that offers a lump sum payout. You can use this amount to pay the tuition fees, travel expenses, etc.
Riders are a critical part of insurance policies. They help you increase the protection you get from your policy and get coverage against specific risks not included in your standard policy. You can purchase any rider you want by paying an additional premium.
You must assess your risks and choose the right rider accordingly. For example, if your family has a history of critical illnesses like cancer, you may be at high risk of developing the disease in the future. So, to meet the medical expenses, you can consider buying riders like a cancer plan or a critical illness rider.
A financial emergency can occur at any time without any warning. Hence, you must invest in a savings plan that would offer you a loan during an emergency. Generally, most savings plans allow you to avail of a loan against the surrender value of the loan. The amount of loan you can borrow may vary from one insurance company to another, but most insurers allow you to borrow up to 80% of the policy’s surrender value.
Gives you flexibility
This is probably one of the most important factors to consider. When you buy a guaranteed savings plan, the insurance company must allow you to choose the policy’s sum assured, tenure, premium payment mode, etc.
You can either pay a single premium in a lump sum or choose the regular premium payment mode based on your financial capacity. In the latter, you can pay the premium at specific intervals; it can be every month, quarter, half-yearly or annually.
Buying a guaranteed savings plan allows you to have financial stability and liquidity. It also assures financial protection to your loved ones through insurance. However, before purchasing such plans, you must be wary of the variables. Consider the above mentioned factors while choosing the right guaranteed savings plan and make the most out of your investment.