One of the greatest lessons we learn about money during our childhood is delayed gratification. We learn that if we spend less today, we get to buy all the things that seem expensive to use in the future. As we begin our lives in the workforce, we apply the same rules to build wealth for our future. However, as our income rises, our responsibilities rise as well. Therefore, opting for a suitable plan to build savings becomes important.
Insures have launched the savings plan to help customers build wealth as per their needs. A savings plan is an insurance policy that helps build wealth and protect your loved ones simultaneously. With savings plans, you get to select a plan from a wide range of options. This way, you can opt for a plan that matches your requirements. Multiple plans in the market offer a wide range of features. For instance, insurers like Tata AIA life insurance offer the ‘return of premium’ option with their insurance plans.
How Does a Savings Plan Work?
The premiums you pay in the money-back insurance policy are separated into two parts. The first part of the premium amount is kept for insurance coverage, and the second part is kept for wealth creation. There are several types of plans offered in the market. The returns you get through your savings insurance plan will depend on your selected type of policy. Therefore, you must select the plan carefully. You can also follow certain tips to maximise the benefits of your plan.
5 Tips You Can Follow to Make the Most of Your Savings Plan
- Purchase the savings plan at a young age: Purchasing this plan at a young age can be advantageous for you. The premium amount for the plan will be low. This is because an insurance company will not view young applicants as high-risk buyers. Young applicants are usually in good health and are viewed as low-risk applicants. Therefore, you will purchase the plan at low premium rates without compromising on other benefits of your saving plan.
- Compare the different options: One of the most optimal ways to make sure you purchase the plan you need is by comparing the different options available for you. With a fair comparison of the different plans available for you, you get to explore the different options available and make an informed decision. Comparing also helps you understand the different features offered by different plans and select those that match your needs.
- Select the correct plan option: After you have narrowed down on a life insurance and savings plan, you will find different choices available in the plan. In addition, different factors like the policy tenure, sum assured amount, etc., are a critical part of your savings plan coverage. Therefore, it is crucial that you carefully select the critical features of your high-return savings plan before finalising the purchase.
- Choose the correct premium payment option: Most savings insurance plans offer you the flexibility to select the premium payment schedule for your insurance plan. For example, you can opt for a single, annual or monthly premium payment for your guaranteed savings plan. You must select the option that matches your requirement. You can also look for features in the premium payment options.
For instance, some insurers offer discounts for annual premium payments. So, while annual premium payments may seem a bit expensive, you will not have to worry about the premium payments for the emaining year.
- Improve your cover with riders: Riders are additions to the plan that help you improve the plan’s coverage. With the inclusion of riders in your plan, you get coverage for specific situations based on the rider you have chosen. There are various riders available in the market.
For instance, a comprehensive health insurance rider will offer you coverage against major and minor illnesses. However, you must select only the necessary riders, as including riders will increase your premium.
Savings plans are optimal choices for individuals looking to get the dual benefit of wealth creation and insurance coverage. While this plan will help you earn suitable returns, you can follow a few simple tricks to maximise the benefits you earn through the plan. Apart from following these tips, you must also read the details about the plan you will purchase. This way, you will make the right decisions regarding the benefits you earn through the plan.