There is never enough time to prepare for all of its ups and downs when it comes to life. People frequently set goals for themselves to reach certain milestones in their lives. However, such ambitions may necessitate a significant financial investment. It might encompass everything from a child's schooling to a marriage. If you prefer to plan ahead and have sufficient financial resources to meet your future demands, you should know about Guaranteed Savings Plan.
What are Guaranteed Savings Plans?
Guaranteed Savings plans are typically non-participating plans with a predetermined endowment assurance plan. You will be required to pay premiums for a set amount of time. You will get advantages whenever the plan reaches maturity. A savings plan provides you with assured returns after the plan's term, as well as additional benefits. A predetermined rate of interest is applied each year during the life of the savings plan. In addition to the set interest rate at the plan's start, the insurer also provides a maturity bonus, a lump-sum payment added to the total sum assured after the period.
The Advantages of a Guaranteed Savings Plan
The guaranteed savings plan comes with several advantages. These may differ somewhat from one insurance company to the next. The following are some of the essential characteristics and benefits of a savings plan.
- You have the option of paying premiums over time or all at once. These alternatives are given to make the policyholder's life easier.
- You might choose a suitable term of your savings plan if you anticipate you'll need your money soon. You can extend your insurance period further if you want to save for the long term.
- When you invest in a guaranteed savings plan, you can receive rewards when the plan matures. The benefits will be the same as the sum assured that was determined before the intended start date.
- Many financial institutions and service providers include a death benefit provision in their savings plans. If the policyholder dies unexpectedly, the beneficiary receives the benefit. In such circumstances, the plan's nominee is entitled to a sum assured.
- If a person is dissatisfied with any clause or term, or condition of the savings plan, they have 15 to 30 days from the start date to terminate the policy and return the paperwork.
- You can also borrow money against your savings plan. Once the insurance has a surrender value, you can use the borrowing option. The amount of loan that may be obtained through a savings plan varies by insurer and policy amounts.
What is Sum Assured?
The sum assured meaning refers to the predetermined amount payable to the policyholder or beneficiary on the occurrence of an insured event. The Maturity Sum Assured is the amount paid to the client by the insurance provider under the insurance policy in after occurrence of the insured event, such as a death. The amount of the Sum Assured varies from one policy to the other.
Choose the Right Sum Assured for a Safe Future
Understanding a policy when it comes to the notion of life insurance might be difficult. You don't have to get life insurance only to check off a box on your financial protection checklist, as many individuals do. You must understand the significance of picking a policy with sufficient sum assured. if you are the primary breadwinner, you must safeguard your family financially. As a result, you should consider several criteria while deciding on the appropriate sum assured.
Death, sickness, and disability are all covered by various life insurance plans. What matters most when purchasing a plan is that it meets your demands, offers an appropriate sum assured, and is within your budget. For example, you can get a comprehensive term insurance plan with a modest cost that provides considerable coverage.
Conclusion
In today's world, life insurance has become a necessary cost. With so many lifestyle illnesses afflicting humanity, having a backup in the form of a sufficient sum insured under a life insurance plan is critical. So, get the right policy with a sufficient sum assured and enjoy your life without stress!
Disclaimer:
Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.