Are you looking for an investment that ticks all the boxes? These may include future financial security and reliable income, along with abundant funds for your family, should anything happen to you in the interim. Of course, there are the added aspects of getting stable returns that are not impacted by market fluctuations if you’re risk-averse and mopping up some tax savings in the bargain. Well, while not every investment ticks all these boxes, there’s one plan that does it efficiently. We’re talking about a guaranteed savings plan, which is one of the most effective options for your financial portfolio. Let us read more about them below.
What a Guaranteed Savings Plan Offers
Once you opt for a guaranteed savings plan, you will get several benefits/features. These include:
- Life Coverage (Varies by Plan) – One of the key advantages of guaranteed savings plans is that they offer life insurance coverage. However, the extent of coverage depends on the specific plan chosen. Some plans provide a minimum sum assured, while others may offer a higher cover to help your family meet vital and future costs in case you pass away within the investment period. It gives you mental peace in your working years, knowing that you’ve secured the basic family finances above everything else.
- Stable & Guaranteed Returns – Guaranteed income/return/savings plans, as they are often known, offer returns that are stable and not linked to market fluctuations. However, while non-participating plans guarantee returns upfront, some participating plans include bonuses that vary based on the insurer’s financial performance. You will get to see the guaranteed return amount in advance while buying the policy (for non-participating plans) and can thus plan to meet future financial goals accordingly. You can also compare this return amount before choosing any particular plan.
- High Flexibility – There are several ways to customise your guaranteed savings plan, including choosing the life coverage amount and nominees (and/or modifying them), along with the premium payment flexibility and duration. You can also choose to get income for a certain period, and, in some cases, for your lifetime, depending on the policy type and structure. Then, there’s the option to integrate riders with your policy, such as critical illness, waiver of premium, accidental disability or death, etc. This helps widen your coverage. But the additional premium cost for riders may vary.
- Tax Benefits – Premium payments are eligible for tax deductions under Section 80C of the Income Tax Act, subject to the ₹1.5 lakh annual limit. Additionally, to qualify for full deductions, the sum assured must be at least 10 times the annual premium. Otherwise, deductions may be partially or fully disallowed.
Conclusion
As you can see, a guaranteed savings plan is one of the best options for your investment and financial portfolio. It will help you save money on taxes while getting risk-free returns that you can depend on in your sunset years. At the same time, it also ensures ample life coverage that financially safeguards your family in untoward situations. Hence, without further delays, you should select the right plan as soon as possible to ensure a future that is free from stress.