Having a life insurance plan is quite important. Regardless of the comfort you have in your current life; you may never know what your future holds for you. With a suitable life insurance plan, you will be at peace during emergencies. While purchasing life insurance for protection is important, wouldn’t it be better if the policy you chose offered you additional benefits as well? This is possible when you purchase a savings plan.
A savings plan is an insurance plan that allows you to build wealth and get insurance coverage under the same plan. Therefore, purchasing a savings plan can be quite helpful for you.
Top Ways in Which a Savings Plan Will Help You
Here are certain benefits of savings plans in India:
- Pay off outstanding debt: You may have taken out a few loans to take care of certain expenditures like your child’s education, your financial goals, etc. These loans can accumulate over the years, and they can become a financial liability for you. Along with this, if you pass away, they may be passed down to your family. Therefore, it is important to take care of these debts. You can use the short-term savings plan to clear off your outstanding debt and liabilities.
- Financial emergencies: Emergencies come without warning, and you may not be financially stable to deal with these emergencies. When you own a suitable savings policy, you will have access to funds when you need them. Most insurers like Tata AIA also allow customers to take a loan against Tata AIA life insurance plans. Such features in savings plans can be quite helpful for dealing with emergencies.
- Replace your income: If you are the sole earner of the house, and you pass away, your family may face financial difficulties in dealing with the expenses. However, with the life insurance coverage offered by the savings plan, your loved ones will get to maintain their financial stability and deal with the different expenses without any issues.
- Financial support for family goals: As you move through numerous stages of your life, your loved ones may begin having new goals and aspirations. Supporting their goals may require a decent amount of financial help from your end. However, with a suitable savings plan for your loved ones, you will be able to carry out these expenditures with ease.
- Critical illness rider for critical issues: Since a savings insurance plan is essentially an insurance plan, you get to include different riders in the plan. For instance, when you include the critical illness rider in your savings plan, you get to enhance your coverage if you are diagnosed with a critical illness. This way, you get to improve your insurance coverage.
- Retirement planning: Once you leave the workload, you stop receiving monthly income. When you own a suitable savings plan, you will not have to worry about your financial stability during your golden years with the savings insurance retirement benefits. Certain plans also allow you to opt for a payout option of your choice. You can opt for the option to receive payouts at regular intervals.
- Launching new ventures: If you wish to launch a new business or start a new venture of your own, you will need a decent amount of financial support. The savings insurance plan will help you access the financial support you need. The wealth that you build with a savings plan will help you invest in your business idea.
- Tax benefits: As per the Income Tax Act, the premiums paid towards a life insurance plan are eligible for tax deduction upto ₹1.5 lakh as per Section 80C. Along with this, the death benefits obtained through this plan are also exempted from taxation as per Section 10(10D). Therefore, it is an effective tax-saving instrument.
With a suitable savings plan, you will get to build wealth and protect your loved ones simultaneously. Along with this, the policy will offer you financial coverage for dealing with your retirement needs. You can also rely on the policy for your business ventures, family goals, financial emergencies, etc.