Things to Remember Before Buying a Guaranteed Savings Plan

Working professionals are often advised to save a part of their earnings to secure their future. Savings are, therefore, an essential part of our financial culture. Acknowledging this, insurance providers developed a guaranteed savings plan that enabled investors to build a financially stable future for their loved ones in their absence. Let’s understand what is a guaranteed savings insurance plan and explore certain essential factors.

What is a Guaranteed Savings Plan?

In simple terms, a guaranteed savings insurance plan is a combination of a monthly saving plan and goal-oriented savings. When you buy a savings plan online, it can ultimately help you build a large corpus over time.

But before you hop on to buy the best guaranteed savings plan, it is important to consider certain factors.

Things to Remember Before Buying a Savings Plan with Guaranteed Returns

Whether it is buying the best guaranteed savings plan or choosing any other financial investment, it is important to appropriately study your investments for an informed financial decision. With that in mind, here are the factors you must be aware of before buying a savings plan online:

• A guaranteed savings insurance plan promises risk-free returns

  The primary purpose of this policy is to provide assured and risk-free returns to the insured member. The interest that is earned on this policy is, therefore, lower than what is attained in a market-linked insurance cover. The guaranteed savings plan also does not offer any bonus or dividends from profits by the insurer. Regardless, returns from the best guaranteed savings plan help you attain your financial goals while nullifying the effect of inflation.

• A guaranteed savings plan comes with insurance cover

  In addition to wealth creation, your savings plan comes with a life insurance cover with the promise of a guaranteed death benefit. In the event of your untimely death, the nominee receives the sum assured to meet the financial obligations in a worry-free manner.
  Once the nominee receives the lump sum, the guaranteed savings plan is terminated. However, if you wish for the policy to continue until the demise of your spouse, you can opt for life insurance coverage.

• Insurance plan with guaranteed returns offers flexibility

  When you buy a savings plan online, you can customise the policy by choosing the features that are suitable for you. For instance, you can choose how you should receive the income upon the completion of the premium payment term. The policy enables the insured member to opt for either monthly or annual instalments. It even enables you to choose the period of receiving the income, which usually falls between 20 to 45 years.

• A guaranteed savings insurance plan helps you attain your financial goals

  The periodic structure of a savings plan enables you to meet your present and future financial goals. This savings strategy helps you cross off goals that keep coming up, from daily spending and utility payments to pursuing further education or seeing the world. Consequently, if you're searching for a lump sum of money to pay for goals that call for a sizable one-time payment, such as a down payment on a home or car, or vehicle, this type of savings plan is not perfect.

• You can enhance your insurance plan with guaranteed returns by opting for add-ons

  Acknowledging that every individual's financial requirement may vary, insurance providers offer several add-ons above the basic policy. These add-ons can help enhance and strengthen the policy as suited to the financial needs of the investor.
  For the best guaranteed savings plan, individuals are advised to carefully analyse their financial needs and their lifestyle and choose the added benefits accordingly.

• A guaranteed savings plan comes with tax benefits

  In addition to the aforementioned benefits, an insurance plan with guaranteed returns also comes with tax benefits. The Income Tax Act, of 1961 affords two provisions to avail of these benefits:
  
  • According to Section 80C, you are entitled to a tax deduction for the premiums you paid to purchase the savings plan as long as the total is less than or equal to 1,50,000 a year.
  • Both the ordinary income and the life insurance benefits you will receive are free from tax deductions under Section 10(10D)

Conclusion

To make an informed financial decision regarding the purchase of a guaranteed savings plan, individuals must know all the features of the policy so they can make the best of their investment. Once you decide to invest in the policy, you can easily buy a savings plan online, like PNB MetLife's Guaranteed Future Plan, from the comfort of your home.

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