Right from the very beginning, we all have been advised by our elders to practise savings. The habit of saving money creates a continuous habit of keeping an eye on the expenses in order to create a fund which is termed savings.
The importance of savings is actually understood when the money saved is helpful during needy situations. The money saved helps in facing times of adversities and unforeseen situations with ease. In the same way, the concept of a savings fund or a savings plan is gradually pacing up. As life and situations are not in our hands, it is essential for us to plan our finances well. Appropriate financial planning helps one to save for the future as well as aids in meeting all the upcoming expenses. So, let us understand saving benefits in the form of a saving policy. But, before that, let us know about savings plans in India.
What is a Savings Plan?
A savings plan is a type of life insurance which helps the policyholder in saving his/her money over a particular time period and thereafter creates a guaranteed financial pool or fund that can be utilised to meet future goals, expenditures, necessary commitments, etc. Moreover, a good savings plan can also be considered as a secondary income source (depending on the policy) to meet future requirements.
There are different types of savings plans that one can consider depending on their requirements. They are money-back plans, guaranteed return plans, regular income plans and monthly income plans.
There are several insurers that provide different types of savings plans. For example, One can check varied savings plans such as Tata AIA Life insurance plans and many others and buy a savings plan as per one’s requirement.
Importance of Savings Funds for the Future
The key features of the Savings funds make them a reliable investment avenue for securing the future. As the future is unpredictable, it is best to start today by investing money in a savings fund or a savings plan or savings policy.
- Helps during bad days
We cannot predict the future as much as we plan. It is possible that you may need an emergency fund. Savings plans should take this into account. Different plans will allow you to withdraw partial amounts after maturation. It could be any kind of emergency- a sudden expense, a necessary repair, expensive medical bills, or even the loss of a job.
- Instils peace of mind
An account full of savings does impart a sense of relaxation and calm. Similarly, a savings fund helps the policyholder in leading a stress-free life free from the tensions of arranging money to meet future expenditures and requirements.
- Helps fund the education of children
Education is one such area which cannot be compromised. With a savings fund, the policyholder can easily pay off expenses related to the education of his/her children.
- Promises a secured future
The policyholder, with the help of a savings fund, can meet the future necessary expenditures, namely, retirement planning, children’s education, home loans, buying a property, spouse expenses, etc.
- Helps in planning short-term goals
Savings funds are not just confined in meeting long-term goals rather, they can also help in fulfilling short-term goals as well.
- Aids and supports the family during adversities:
Savings funds act as a cushion and support for family members during unforeseen circumstances. This will help them in overcoming hurdles and in leading life without depending on others.
Now that the importance of Savings funds from a future perspective is well understood, one can check out different savings funds and invest accordingly.