Saving is a cornerstone of financial success. You may think that putting aside some amount of money in a savings bank account is good enough. However, the reality of inflation means that this is not the case. To beat inflation, you need to do more than just save. You should make your money work for you by investing smartly. One way of doing this is by investing in tax-saving plans. Read on to find out if you are at the right age to opt for one.
When should you choose a savings plan?
A savings plan combines life insurance coverage and investment that gives you guaranteed returns and even income if you choose the income variant. You may be wondering why choose such a plan; you feel like you are too young to need life insurance. So here are some reasons why you need the right plan no matter your age.
- The early bird advantage: When you are young, the insurance company expects better health so the premium charged is lower. This puts you at an automatic advantage financially. There are even savings plans geared to children, so you can purchase life coverage for your child, while simultaneously saving for their future education. However, no matter your age, it is never too early or too late to invest in a savings plan.
- Ensure financial confidence for dependence: The main reason why people buy insurance is to ensure the financial confidence of their dependents. Now, you may think that you are young and have not started a family, but you could have aging parents who are at retirement age. It may be a good idea to have a contingency plan and secure their financial independence. The Covid-19 pandemic has made the importance of life insurance clear. Look at life insurance as an investment to protect your family’s future.
- Enjoy a regular income: These tax-saving plans come in endowment and income variants. If you choose the income variant, you can enjoy passive income at regular intervals as per the policy terms. You can choose a plan offering the income pay-outs of your choice. There are whole life savings plans that can cover you till the age of 100. Along with that, you can get regular income from the same plan. Such income can help maintain your lifestyle in your retirement years.
- Guaranteed returns: Along with life insurance coverage, a savings plan offers you the benefit of guaranteed returns. Therefore, your premium payment ensures the financial protection of your family if anything untoward should happen to you which is called the Death Benefit. Plus, they also offer a Maturity Benefit, which is the sum assured. The Maturity Benefit is the guaranteed return you get so long as you pay the premium for the policy term.
- Flexibility: Savings plans come in a multitude of variants with varying policy terms and premium payment terms. With a plethora of options, you can choose and customise the savings plan according to your needs and financial condition. Whether you want a pure endowment plan or an income plan, a single premium, or regular premium payment. There are innumerable combinations you can choose from. All you need to do is choose one that suits your requirements best.
- Plan efficiently for future goals: Long-term goal planning can be complicated. Perhaps, you set aside some money for a certain goal. However, a financial or medical emergency crops up forcing you to use that money you set aside. By investing in a savings plan, you can set the Maturity Benefit for a future goal. During the course of the plan, you will not be able to touch the money and it will be safely set for the future goal.
Tax-saving plans offer so much more than just saving tax. Invest in one today. Protect your finances and your family, and enjoy peace of mind and additional income.