Just earning in today’s time is not enough. Keeping in mind the soaring inflation rates, saving on a regular basis does help us in the long run. It gives us peace of mind and provides financial security if our loved ones or we ever encounter an unforeseen and unfortunate event. This helps us fight all situations without giving up on our goals and dreams, even when we retire.
What is a Savings Plan?
A savings plan is a legal contract between the policyholder and an insurance provider where the policyholder pays premiums to the latter and, in return, gets the policy’s benefits. A savings plan ensures that it offers dual benefits of both investments as well as insurance. So, not only does it provide financial security, but it is also a means of wealth creation in future.
Investing in a savings plan has various long-term benefits. This article tells you all about how does investing in savings plan benefits in the long run. Let us see how.
How Does Investing in Savings Plan Benefit in The Long Run
- Helps Us Develop a Habit of Saving
One of the key features of investing in a savings plan is that it helps us develop a habit of saving, which is beneficial in the long run.
- Tax Benefits
Another key reason to invest in a savings plan is the benefit of tax benefits. The premiums paid by the policyholder for the tax savings plan are eligible for tax benefits under Section 10D of the Income Tax Act, 1961. The policyholder can claim up to Rs. 1.5 lakhs of tax benefits in one financial year. However, tax laws are subject to change from time to time.
- Additional Rider Benefits
The savings plan also offers the provision to choose additional rider benefits. The policyholder does not have to invest in multiple plans to avail additional benefits and large cover with this provision. The policyholder can choose from multiple additional rider options, such as accidental disability rider benefits, accidental death rider benefits, waiver of premium rider benefits, etc. Please note that riders are not mandatory and are available at an additional cost.
- Financial Security
A savings plan acts as a financial safety net and provides our family and us with financial security. It ensures that even in the worst-case scenarios where we meet an accident that leads to disability or if we are not there to provide for our family, they are financially secure and are able to live their lives without any financial constraints.
- Dual Benefit of Investment and Insurance
Some savings plans offer the dual benefits of investment and insurance. In other words, not only can you provide a financial safety net to you and your family, but you can also invest your money in market-related options, such as stocks, shares, bonds, equity, etc., for wealth creation. You can invest in market-related options depending upon how much risk can you afford to take.
- Peace of Mind
A savings plan ensures that you have peace of mind and you and your loved ones live a seamless life. Moreover, it also ensures that when you retire, you are able to achieve all your dreams and do not face any financial constraints.
Today, multiple savings plans are available to us to choose from. Therefore, it is necessary for us to choose the savings plan that matches our and our family’s financial requirements. Besides investing in the best savings plans, you should also go for a leading and reliable life insurance provider.
