In the simplest term, a savings plan is a financial backup that we create by saving or investing a part of our income. When it comes to life insurance savings plans, it means much the same; the only difference is that instead of saving this money in the bank, you save it through an insurance policy that will help you accumulate a fixed corpus over a period of time.
Why is it Important to Have a Savings Plan?
- Emergency expenses
It is always better to have an emergency fund at hand when untold expenses come our way. In most cases, the emergency happens to be a medical one. So that you do not have to be worried for the safety and security of your family, you could choose from different life insurance plans that will ensure financial protection for you as well as your loved ones.
- Encourages Financial Discipline
We all are aware of the benefits of financial savings, but practically implementing those changes in real life and making it a regular habit to make financial savings is a different thing.
One of the biggest advantages of investing in a savings life insurance plan is that it teaches you financial discipline and inculcates in you strong financial habits early in your life. You will feel more responsible for your expenses and try to save more on your earnings.
- Precautionary Motive
Some people also opt for a savings plan so that it can be used as a precautionary backup in case of any unfortunate event in life. There can be a medical emergency which would demand a considerable sum of funds.
You can either opt to use the money from your savings plan, or you can use riders on your whole life policy which can cover you in cases of accidental death, critical illness, etc. Such riders help you to enhance the coverage of your life insurance policy.
- Children’s Education
For every parent, one of the most important things is to provide the best education for their children. A savings plan can assist you in securing the finances for your child’s education.
Your child may also be later interested in multiple hobbies and funding their dreams can become easier when you have the support of a savings plan.
- Self Reliance
If you grow old with a savings plan to support you, it gives you a sense of self-reliance and the freedom to lead your own life peacefully. A Savings Plan provides you with the much-needed independence to spend money on something which you like in your twilight years.
There are many life insurance plans with return savings options which can offer you a whole life income at the end of your policy term.
- Family’s Security
Last but not least, having a savings plan provides your family with the much-needed financial cover in your absence. If you are the sole breadwinner in the family, it is highly advisable for you to opt for a savings plan, so that your family does not have to deal with any financial burden in case of your untimely demise.
To ensure the monetary security of your loved ones, a life insurance guaranteed return plan that promises to provide a life cover for the financial protection of your family would be beneficial.
While at first glance, a savings plan may appear to be a regular life insurance with returns, it is much more than that. It is a complete financial cover that ensures that you lead a comfortable life and also takes care of your family’s financial needs when you are not around.