Saving Insurance Plans That Help You Sleep Better at Night

The world has been experiencing a financial crisis for a long time. It has become pivotal to build wealth and prepare for your future. While your job or business income can help tackle the immediate needs, building a corpus for your golden years and protecting your family’s financial future is a major requirement.

One of the ideal solutions to tackle financial savings is saving insurance plans. Let’s learn what it is and how it can help you sleep better, knowing that your finances are handled.

What are saving insurance plans?

Saving insurance plans are special types of life insurance that allow you to build a corpus for your and your loved ones’ financial requirements. Savings insurance plans primarily offer life insurance benefits to the policyholder along with added benefits.

You can purchase these plans from insurers and choose the type of plan that best suits your needs. You can select the desired sum assured, the policy tenure, and any additional benefits in the form of riders that you may want to include. The terms of the contract state that you must pay the premium for the policy promptly. In return, the insurer guarantees that in the event of your untimely demise during the policy tenure, they will pay your beneficiaries the sum assured as the death benefit. If you survive the policy tenure, you may also be entitled to the maturity benefit, which serves as an incredible savings plan.

Types of Saving Insurance Plans

There are different forms of saving insurance plans available in the market, each with its advantages, from which you can choose the most suitable one for you and your family:

1. Endowment plans –
   These are a type of life insurance plan that allows you to earn bonuses on the money that you invest in insurance policies. As a participating member of endowment plans, you can earn massive bonuses that can accumulate over the years to help you overcome financial struggles. You can also use them as basic savings plans as a non-participant. They will still pay death benefits and maturity benefits as applicable, but without the bonuses if you are a non-participant.

2. Money-back plans –
   For more flexible savings insurance plans, you can opt for money-back policies. With these life insurance plans, the insurer allows you to make regular withdrawals at regular intervals from your policy. If you survive the policy tenure, the maturity benefit is settled with the remaining amount that was not withdrawn. In the event of your demise during the policy tenure, your beneficiaries receive the sum assured as death benefit in full.

3. Term insurance with return of premium –
   Term insurance policies are a form of life insurance that is more affordable, with flexible sum assured and for shorter durations. While most term insurance policies do not pay maturity benefits, term insurance with a return of premium guarantees that if you survive the policy tenure, you will receive your maturity benefit. The amount is played in a lump sum, thus serving as an incredible savings option.

The saving insurance plans allow you to build a habit of setting aside a sufficient corpus for you and your family. The bonuses from endowment plans and money-back plans can help navigate current financial needs. The massive lump sum payout from death benefits or maturity benefits can help you or your loved one’s cope with future finances.

How much coverage is good for Saving insurance plans?

There are several factors to consider when choosing the sum assured in your Saving Insurance Plans. You will have to factor in your current financials as well as the rate of inflation that would affect the death benefit maturity benefit. The sum assured should suffice to take care of the financial needs and goals of your family in the event of your untimely demise. The corresponding premium for that sum assured must also be affordable in your current financial situation as well as accumulate enough in your savings when received as maturity to benefit.

For instance, let’s say you purchase a 3 crore term insurance for 20 years. In the event of your demise during the policy tenure, your beneficiaries would receive a 3 crore settlement as the death benefit from the insurer. A 3 crore term insurance is a massive amount that can help them settle outstanding liabilities as well as plan for the future, including educational goals and life stages such as marriage, children, etc.

In the event that you survive the policy tenure, then you will receive the maturity benefit from your 3 crore term insurance. Seeing as the sum assured is high for a three crore term insurance, the subsequent premium accumulated over the years will also be higher. Therefore, the maturity benefit will come as a lump sum amount which can serve as a savings plan.

You can choose the best type of Saving Insurance Plans with adequate sum assured and affordable premiums that will benefit you and your loved ones.