Savings plans in India have become important considering the increasing inflation rate and unprecedented pandemic scenarios. People have realised its benefits in the long term that can secure their family and ensure the money goals are well accomplished.
As a result, savings options in India have increased manifold. While there are many options, the individual options have provided varied, flexible options to customise it according to individual needs. And a savings insurance plan is one such prominent plan introduced by insurers in India.
What is a Savings Insurance Plan?
A savings insurance plan is an insurance plan that provides a life cover and a savings benefit. The life cover will provide a lump sum death benefit to your loved ones in your unexpected demise, and the savings benefit will reach your hands when the policy matures. You can modify the policy features based on your commitments.
For instance, a Tata AIA savings plan allows choosing a regular income payout option. So, when the plan matures, the policyholder will get a regular income for a defined income period.
Who Should Buy a Savings Plan In India?
While a savings plan is always a beneficial option for any person who purchases it, it is important for certain people. So let us get into the details to understand better.
- People with many family commitments – A savings plan is certainly an important necessity for people who are the sole earning members of the family. It will provide the necessary financial assistance to accomplish the family commitments as and when it arises.
For instance, in case of their unexpected death, the family members can utilise the savings benefit to pay for their child’s education, spend it for their marriage, or even utilise it for routine expenses until the family stabilises with another financial source.
- People planning to start a business – People planning to start a new business have to look forward to investing in a savings plan that can provide a fixed income until the business stabilises to make profits. It will help take care of their family and let them concentrate on the upgradation of the business.
- People having a family history of critical illnesses – If a person has a family history of developing a critical illness such as cancer, he needs to invest in a money-saving plan that will provide a financial resource to suffice for the unprecedented medical and hospitalisation expenses.
- People wanting to pursue higher studies – Some people prefer pursuing higher studies later in their life. However, during that time of their life, they might get engaged with increasing commitments owing to marriage, children, dependent parents, etc. So, to pursue higher studies, they can plan for a sabbatical leave in their career and a regular income from the savings plan during that leave to suffice for their financial needs. It will help them fulfil their family financial commitments while pursuing higher education.
- People who are planning to increase their assets – It is very common for people in India to keep increasing their financial assets by purchasing land, a new house or a car. In such cases, they avail of loans to pay for and own the property. Investing in savings insurance plans can help pay the monthly instalments and secure their family’s financial future with the life cover that can help them pay off debts.
Conclusion
Investing in a savings plan in India is an important financial decision that can help people plan for their future financial needs precisely. And, people with many family commitments, wanting to pursue higher education or start a new business, wanting to increase personal assets must plan to save money in India anyways! So, it is more than a responsibility and not a moral obligation.