Saving money is a crucial habit. From collecting pennies in a piggy bank to receiving the text of salary being credited to the bank account, you might have done savings unknowingly in the hope of a financially secure future.

Life is completely unprecedented and nobody knows when an unexpected incident occurs. In such circumstances, savings tend to be a way out.

However, in case you’ve never done investing before and have no idea about it, you’ve already found a sweet spot because, by the end of this article, you’ll have sound knowledge about what a savings plan is.

Being financially sound might not be the easiest job, but through proper research and thoughtful investment, you can ensure that you safeguard a stable financial future for your loved ones, even at the cost of your absence.

For a reliable and result-oriented wealth generation, guaranteed savings plans are your best bet. These plans are perfect for people looking for the great security of their principal fund. It is one of the most unique investment plans available in India.

What are Guaranteed Savings Plans?

A guaranteed savings plan is a non-participating, individual, and non-linked insurance policy, which allows you to secure a financially stable lifestyle for your family in the event of your unfortunate demise. The policy offers a lump sum amount of money to your selected nominee.

There are also several loyalty add-ons and maturity benefits that come hand-in-hand with this plan and provide you greater returns on your cumulative premiums. With these exciting benefits, your savings corpus is supercharged to help you achieve all your desired goals in life.

Whether you’re looking to save money for your child’s higher education or start a business, these financially draining priorities can be easily covered through a good guaranteed savings plan. Every need that requires monetary resources calls for the need for regular and consistent savings.

The guaranteed savings plan requires you to save a small fraction of your income for a specified timeframe, and gain a secure cover for your future. Additionally, it also provides various other benefits like death benefit, tax benefit, maturity benefit, and so on.

All this is made available to you without compromising on the quality of your current lifestyle. With a guaranteed savings plan, you can make long-term savings for various life goals such as your child’s marriage. This plan ensures that you can fulfill all your aspirations in life.

These plans usually offer a wide range of policy terms for additional personalization, and it also acts as collateral in banks for availing loan facilities in the event of any financial problem in your household. Once you finish paying premiums for a particular time, you can gain all these benefits.

How Guaranteed Savings Plans are Different from The Rest?

While guaranteed savings plans are a subset of life insurance policies, certain aspects make them different from the other life insurance variants like ULIP and Retirement plans. Several features make guaranteed savings plans unique from the rest.

With this policy, you are eligible to gain a cover for the entire policy term, even when your premiums are still being paid for a certain time. Moreover, it also allows you to choose your desired payment term as per your financial capabilities and requirements.

To make it even better, the plan also assures guaranteed regular add-ons, depending on the frequency of your premium payments, through the premium booster facility available exclusively for guaranteed savings plans.

In simple terms, the higher premium you pay, the more the guaranteed add-ons you gain. With that said, these plans provide you peace of mind by providing you complete security of your funds, unlike other plans that require reconsideration every once in a while.

The plan also assures guaranteed returns, regardless of how volatile or downgraded the market is. Therefore, your funds are always safe from the harsh conditions of the market, and your principal amount is completely resistant to any kind of circumstances.

Once you finish paying all the premiums required for this plan, you will surely gain maturity benefit as well, which is sometimes not available in many other insurance plans available in the market. What’s even better, the benefit is given right on the date of the maturity of your policy.

To be eligible for investing in these plans, you don’t even need to undergo any kind of medical tests, and the plan also provides benefits to your family in the event of your unfortunate death during the tenure of your policy.

Unlike other plans, the maturity benefits of a guaranteed savings plan are a lot more promising and include a total sum worth all your premiums paid, along with the guaranteed regular additions and the principal amount.

There are also several tax benefits associated with this plan as per the section 6C and D of the Income Tax Act of India, and the maturity benefits, as well as the policy, are completely free from taxes. The plan also allows you to start investing earlier through a minimum age bar of 18 years.

Bottom Line

If you have recently started making money and have received only your first salary so far, you may not think about a savings plan as a necessity. However, the earlier you start, the more benefits you can reap from these plans.

With guaranteed savings plans, you can save money for any unforeseen events that might take place shortly. These savings plans also help you safeguard a financially secure future for your family and loved ones in the event of your unfortunate death as well. Therefore, make sure you consider investing in guaranteed savings plans.