When we talk about saving money, people instantly think of how tough it is. It can be a little tough in the beginning. But once you have made a habit of saving money, it won’t be so stressful. If you are wondering what a savings plan is, then you have come to the right place. Read on to find out!
A savings plan, in simple terms, is a type of life insurance plan where you as the plan holder can accumulate and save funds in the best and most organized way. It is a type of insurance investment scheme where you have several options to not only save your money but also invest and multiply it in a disciplined manner.
You can use that money to achieve all your long-term as well as short-term goals. A number of features are offered when you invest in a savings plan, and it can help you meet your monetary requirements. This plan ensures a financially comfortable future for you as well as your family.
Benefits of a savings plan
One benefit that every individual looks for in almost every insurance plan is tax benefits. If you opt for a savings plan, then you will be able to save on taxes.
Under section 80C of the Income Tax Act of India 1961, all savings plans are supposed to offer tax benefits. Along with the deductions under 80C, some top savings plans, under Section 10 (10D) of the Income Tax Act of India 1961, also offer tax exemptions on the maturity amount.
When it comes to having a financially stable retirement, having a plan already in action is a must. Retirement is one of the reasons why we invest heavily in plans for 20-30 years.
A savings plan will help you build a corpus as a policyholder even after you have retired. When you choose a savings plan, you ultimately choose a carefree financial future. You can save a certain amount at regular intervals of time that will eventually accumulate into a larger sum with the help of a savings plan. This will help you even after your retirement.
Financial protection benefit
During the tenure of the policy, the policyholder, as well as their dependents, are offered financial protection benefits. In case of an untimely death of the policyholder during the tenure period, this savings plan will take care of the financial burden, which will lead to a financially independent life for the family members.
If you decide to opt for the long-term goal but need to take care of a short-term goal, then you are free to surrender the policy. Though it is not recommended, you can still opt for the same. However, it would be the best option for you not to let go of the tax-saving plan for the long term. They will offer better returns if you stick with the tax-saving plan.