A Savings plan is one of the best ways to save for yourself and your family and secures your future. Savings plans merge two financial benefits into one – savings and insurance.
A savings plan is a form of insurance plan that offers dual benefits. It unfolds savings and life coverage. With every insurance plan, you pay premiums to the insurance company. In addition, under section 80C of the Income-tax Act, 1961, you enjoy tax benefits.
By investing in a tax savings plan, you can enjoy the benefits of life coverage over the entire course of the policy period. With saving insurance, you can invest your money systematically. Being disciplined helps you achieve your long-term and short-term goals with utmost ease.
Before an investment in a savings fund, you should know how to make the most of it. By knowing so, you can ensure to enjoy all of its benefits and optimal coverage. So, listed below are tips to make the most of your savings plan.
How Can You Make the Most of Your Savings Plan?
Here is how you can make the most out of your savings plan:
- Invest early in life:-Investing early in life offers you an upper hand. You get to enjoy lower premium rates without compromising on the additional advantages. This is because the insurance company does not consider you a high risk. If you invest later in life, you need to pay higher premiums. This changes the plan’s overall cost and gets harsh on your pocket.
- Always compare before you invest:- Another way to make the most of your savings plan is to invest in a policy that best suits your needs. Now the question is, how can this be done? It is simple, do not invest blindly. List down the available options and compare them all. Differentiate between the features and pick the one that suits your needs. Therefore compare the multiple savings plan online, and you will have a clear head of where you should invest.
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- Pick the right plan – Once you fix a savings plan to invest in, you get more options to select. The premium payment options and the policy term might vary from one plan to another. The benefits and features also might differ. Make the right choice to make the best of the savings plan. For example, one option can offer you complete life coverage, while the other might provide you with joint coverage with your spouse. The right pick makes sure that you invest in an optimised plan.
- Choose the correct premium payment term – Every savings plan offers a different payment term. There are three choices to pick from:
- Single premium – A vast amount to be paid once a year.
- Regular premium – The premium and the policy payment terms are the same.
- Limited premium – The premium payment term is shorter than the policy term.
- Add riders to your savings plan – Riders add additional benefits to your savings plan. Make sure to check for offered riders before you make a purchase. Riders come at a nominal added cost, but their gifts are extravagant.
There are multiple kinds of riders available:
- Accidental death benefits rider
- Critical and terminal illness rider
For example, with the Tata AIA savings plan, you can include riders like accidental death and dismemberment rider and waiver of premium rider.
Conclusion
When you make an informed purchase decision, your savings plan can help you meet your goals at every life stage. So, understand your options and check the features available for each savings plan. Then, make your choice based on what works best for you. Also, remember that you get to enjoy tax benefits irrespective of the savings plan you choose. Remember to make use of them to bring down your tax burden.
Making smart investment choices in a saving plan can help you meet the goals of your life at every stage. So, make sure to make the most of it. In addition, any savings plan you choose helps you enjoy tax benefits. So, why wait further?