By Yashvi Jain
One cannot estimate the value of life using any measuring tool. It is where the concept of life insurance comes up – to insure your life and provide peace of mind that the family will be financially safe after you. Depending on the type of life insurance policy you buy, you can also rest assured about achieving various life goals.
Besides preparing for your family's future through life insurance, you also want to save money for other needs. Whether it is regular household expenses, child education costs, or financial liabilities; disciplined savings are a crucial part of life. Both of these aspects make people wonder if they should choose life insurance or the best saving plan.
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Before making any choice, you must understand what you will get with the best savings plan in India.
More About Savings Plans with Life Insurance Coverage
A savings plan, also known as a savings and income plan, is a type of life insurance policy designed to provide guaranteed returns to the policyholder. One reason behind the popularity of some of the best saving plans is that they encourage disciplined savings, which is quite challenging for most people.
You can think of the benefits of the best saving plan as life insurance plus savings. You can select either monthly income or lump sum pay-outs from these plans. If you want the best of both worlds – savings and life insurance, buying the best savings plan in India would be the right choice for you.
You can think of the benefits of the best saving plan as life insurance plus savings. Pixabay
Since your personal needs can be different from others, you should first understand which type of life insurance plan is suitable to fulfill them. For example, if you want to invest money and get life cover, learn about ULIP's full form and function. Similarly, if your preference is to save money and get life insurance coverage, check the details of the best savings plan offered by life insurers.
Comparison Between Life Insurance and Savings Plans
Given below are certain terms based on which one can compare life insurance policies with savings plans:
The benefits of life insurance policies depend on the specific plan you choose. If you buy a pure term plan, the policy nominee will receive only the death benefit in case of your unfortunate demise. With ULIPs, you get life cover and market-linked returns as defined in the plan terms and conditions.
The best savings plans with a life insurance component work a little differently. Unlike other policies in which the returns are market-linked, you will receive guaranteed payouts under these plans. Take the case of Max Life Savings Advantage Plan, under which you get a partly guaranteed lump sum amount on maturity. Knowing that you will receive a certain amount will help you plan for your life goals.
The benefits of life insurance policies depend on the specific plan you choose. Shutterstock
All types of life insurance policies offer the fundamental benefit of financial protection. However, a thin line separates various life insurance policies from the best savings plan in India. Buying a policy other than a savings plan may mean you do not want to save money through a specific plan but only need life insurance coverage. Accordingly, you select an adequate sum assured that fits your needs the best.
However, the primary intent shifts to saving money with a savings plan, though it also provides life insurance coverage. Hence, you should check the death benefit offered under the best saving plan while buying it to achieve various life goals.
This is one aspect where the benefits of pure life insurance converge with the best savings plan in India. Both these types of life insurance plans work as tax-saving tools for Indian citizens. The premium paid for a savings plan can make you eligible to save tax under Section 80C. You can save a maximum of one and a half lakh rupees under this Section.
The death benefits and maturity payouts of all these plans are tax-exempt or tax-free. If you feel the need for efficient tax planning and disciplined savings, savings plans are good for you. The best part is – these plans are suitable for all – young investors, recently married individuals, or those nearing retirement.
How to Choose A Life Insurance Plan for You?
A crucial part of selecting a suitable life cover insurance plan is to check the benefits of different plans and compare them with your needs. For some breadwinners in a family, pure term plans work perfectly well. While for others looking for a source of income, the best saving plan is a better option.
Whichever plan you choose, its offerings should align with your future needs. In addition, check for the flexibility to withdraw money, available rider options, and premium payable for different plans. There are savings and income calculators available online to help you in making an informed decision.
(Disclaimer: The article is sponsored and hence, promotes some commercial links.)