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Savings Plans are a type of life insurance policy, which provides the combined benefit of insurance coverage and savings. This type of policy is paid out a lump sum amount after a predefined term at which the policy matures.
Upon maturity, the insured receives the sum assured plus the bonus for the policy term, if any. And then going forward, the insured is not covered by the policy. In case of an unfortunate demise of the insured, during the policy tenure, a sum assured amount as death benefit along with bonus (if any) is paid to the beneficiary. This product is suitable for customers who have a conservative outlook towards growing their savings, i.e. they don’t want to take risks with their savings by entering into the stock market preferring safer option.Read More
IDFC FIRST Bank brings you some of the best Savings plans from three leading Life insurance companies in the Industry – ICICI Prudential, HDFC Life, and Bajaj Allianz. We aim to provide a curated set of products to simplify the selection process for our customers.Read Less
REASONS TO BUY SAVINGS PLANS
Financial protection: Savings plan makes sure your loved ones do not suffer in case of your untimely demise and the consequent loss of regular income. Their financial needs get protected by the payout received as the death benefit of the plan.
Financial discipline: Investing in an online savings plan ensures that you put away a part of your income regularly into the policy, inculcating the habit of saving and thus curbing your spending habits.
Long term planning: Over time, the savings plan will help you accumulate wealth by growing your corpus through regular premiums. Life goals like children education/marriage, purchase of assets, retirement planning etc., can be achieved through these plans.
Tax benefits: An ideal investment plan with tax benefits. Savings plans fall under the category of life insurance and hence is eligible for tax benefits under section 80C and 10(10) D of the Income Tax Act.
*As per Income Tax Act, 1961. Tax benefits are subject to changes in tax law.
Flexible options: Savings plans realise that there are different goals and priorities for everyone so, they offer a wide variety of flexible features that can be customised to suit individual needs.
A Savings plan is a contract between an insurance company and a customer, with a promise to the customer to pay a lump sum benefit amount after a certain period known as a term instead of regular payments by the customer to the insurance company. The contract also assures the customer’s appointee a certain lump sum as death benefit upon the demise of the customer/insured during the term of the policy.
Based on maturity benefit, there are following saving schemes to select from –
Guaranteed returns: Also known as non-participating/without profit policies, the company profits are not shared, and no dividends are paid to the policyholders. Maturity benefit is equal to Guaranteed Sum Assured.
Guaranteed returns + additional bonus: Also known as participating policy/with-profit policy, it enables you as a policyholder to share the profits of the insurance company. These profits are shared in the form of bonuses or dividends. Maturity benefit is equal to Guaranteed Sum Assured + Bonus (based on company performance).
Each individual has different requirements. You have to consider the following factors before you choose the Savings Plan that is right for you.
Evaluate financial goals: Different people have a different set of goals to achieve. Each of these goals requires a different amount of funds to achieve and a different period. Use these factor to choose a plan that allows you the achieve the goal.
Check features, riders, and flexibility: Savings plan comes with a wide range of features like riders for the accident, disability and illness that help you get additional coverage, the flexibility to access your funds in case of an emergency, and whether you can get a loan against the funds. Choose those that suit your requirements.
Determine investment horizon: Choosing an investment horizon helps to ensure that the cover you have opted for is available when you need it. It also helps you map your long-term goals and financial requirements which helps you choose the right plan accordingly.
Assess risk appetite: Savings Plans offer a variety of choices that cater to all risk appetites. Age and personal factors determine the number of risk people can take while investing in Savings Plans.