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The savings plan offers various features that help to meet the specific financial need of the individual by making the investment as per one’s own suitability and risk appetite.
Along with the benefit of wealth accumulation, the savings plan also offers the advantage of insurance coverage. Under the savings plan, a death benefit is paid to the beneficiary of the policy in case of an unfortunate demise of the insured during the policy tenure.
Savings plans are introduced by the Indian Government or the public sector banks or financial institutions. The main advantage of the savings schemes is that they’re backed by the Government, thereby catering to the complete security and safety of the interested capital. Moreover, they are low-risk financial instruments and, at the same time, offer good returns.
◼️ Key Features of Savings Plan
Here are the main highlights of savings plans and why one should consider buying them over any other plan in the market.
1. Flexible Premium Returns
Premiums under the savings plan can be paid annually, semi-annually, quarterly, or monthly as per the convenience of the policy holder.
2. Maturity Benefit
Under the savings plan, maturity benefits are guaranteed that offer certain fixed savings to the policyholder. Additional maturity benefits are also available in some savings plans that help the policyholder achieve the desired financial corpus.
3. Life Cover
A savings plan is also known as a life cover plan. It offers life coverage and financial security to the family even after the untimely demise of the policyholder.
4. Guaranteed Returns
The returns under the savings plan are risk-free as they are guaranteed. It means that the policyholder will be provided with the amount promised during the policy inception only if all the premiums are paid till date.
◼️ What is Term Insurance?
If you are wondering about what is term insurance, we are here to help you. Simply put, term life insurance meaning can be regarded as an agreement between the policyholder (insured) and the insurance company, where in case of the policyholder’s untimely demise, a specific sum is paid to the insured person’s family by the insurance company. You will find that term plans are significant when it comes to long-term financial planning.
When understanding what is term insurance, it is important to also know – term insurance is the purest form of life insurance policy that offers comprehensive financial protection to your family members against life’s uncertainties.
Based on the term insurance plan you buy, your family will get life cover or sum assured in case of your untimely demise within the policy period. Let us know more about what is term insurance and the many features and benefits it offers.
◼️ What are the Key Features of Term Insurance?
Now that you are aware of what is term life insurance plan, you should thoroughly understand the term plan meaning for your loved ones by checking the features and benefits of term insurance plans. Following are some of the primary term insurance benefits and features:
◼️ Cover Against Eventualities
If you are the sole breadwinner of your family, you can help secure your loved ones against any financial setback by understanding what is term plan early in life to support a worry-free financial future for your family. You can easily take a significant life cover for a relatively small premium payable under these term insurance plans.
- Provides Add-on Riders
- Provides Cover for Critical Illnesses
- Cover for Accidental Death or Disability
- Offers Tax Benefits
◼️ Start Planning for Your Child’s Education
As a parent, your kids are the most important part of your lives. Smallest of your happy moments depend on them. While trying to maintain a balance between emotions & practical life, managing spending and savings often becomes a tricky task.
You would do anything to make your children happy and to secure their life & future. Max Life Child Insurance Plans have been specially customized to address your child’s future needs, even in your absence.
◼️ What is a Child Insurance Plan?
A child insurance plan is a combination of insurance and investment that ensure a secure future for your child. Life cover is available as a lumpsum payment at the end of policy term. Not just this, these plans also provide flexible payouts at important milestones of your child’s education. While one may not want to think about unfortunate situations like death or serious medical illness, it’s important that you shield your child’s future against such incidents. Max Life Child Insurance Plans ensure that your child’s future financial needs are taken care of even in your absence.
◼️ Why Buy a Child Plan?
Simple monthly savings might not suffice the growing higher education costs. For your child to shine in the competitive environment, education fees should be the last constraint. Child insurance plans provide you the flexibility to invest based on your child’s education needs, your current financial status, and other monetary goals. Typically, child insurance plans provide a life cover of around 10 times the annual premium. Additionally, these plans also provide partial withdrawal facility as needed. Along with this, you can also avail tax benefits for premium paid.
◼️ How a child insurance plan secure your child’s future?
- Provides financial security during the most crucial years of your child’s life
- Offers a perfect blend of investment and savings in a single plan
- Safeguards child’s future, even after demise of the parent
- Favours disciplined, long term savings, which usually becomes a challenge
◼️ Plan for Your Child’s Education with Child Insurance Plans
A child insurance plan offers a mix of insurance and investment. The life insurance component guarantees that your child enjoys financial protection even if something were to happen to you. The investment aspect allows you to grow your funds to secure your child’s future. You can use the corpus you build up to finance your child’s higher education and career goals. Since the investment allows you to grow your money, it is a better option than saving, which cannot counter the effects of inflation.
◼️ Why Do You Need a Child Education Plan?
- Let’s look at how a child education plan can benefit you:
- The plan provides life insurance and an opportunity to grow your wealth through investments to secure your child’s financial future.
- The plan helps ensure that your child receives the education they want with a lump-sum payout at maturity.
- Child plans ensure you develop a habit of saving and investing for your child’s future, which enables you to combat the effects of inflation.
- The plan acts as a safety net, providing financial support to your child in the unfortunate event that something happens to you.
◼️ Types of Child Plans
To protect your child’s financial future, you can choose from the following types of child plans:
1. Child Unit-Linked Insurance Plans (ULIPs)
A ULIP offers both insurance and investment opportunities. The amount you pay to keep your plan going each year gets divided into two. One part is used as a life insurance premium while the rest gets invested in a mix of funds. Since you can invest in equities, there is some concern about how a volatile market may impact your wealth growth.
2. Child Savings Plans
Child savings plans allow you to invest but they are not linked with market returns and risks. These plans provide life cover, maturity benefits and tax savings, making them a good and safe option.
Money back plans are one of the most popular life insurance plans in India. Under these plans, the policyholders receive frequent payouts as the death benefit, in case the policyholder survives. These packages include both insurance and investment plans
A money back plan is ideal for people who want a guaranteed return on their investments and are looking for regular payouts at the same time in addition to an insurance cover for themselves for the same money they are putting in as premium. Unlike a standard life insurance policy that only pays an amount after the maturity of the policy, the money back plan starts to pay an amount that is called a ‘survival benefit’ over the lifetime of the policy. This survival benefit is given after a few years from the start of the money back plan and continues until the maturity of the money back policy. The survival benefit, as the name suggests, is a reward from the company to the insured individual for surviving. This benefit is only payable if the insured is alive. In case of occurrence of an unfortunate event that results in the death of the insured party, these survival benefits do not accrue any more. In such cases, the nominee(s) receive the whole of the maturity amount, irrespective of how much survival benefits have been paid along with any bonus that may have accrued. Thus, the money back plan offers regular income along with a maturity benefit just like standard life insurance policies.
◼️ Features of a Money Back Policy
- Guaranteed Returns from a Money Back Plan
- Income During the Lifetime of the Money Back Plan
- Income on Maturity of the Money Back Plan
- Income on the Death of the Insured Person in a Money Back Plan
- Bonus Amounts Help Increase Payout in a Money Back Policy
- Add on Riders Available for the Insured to Increase Their Cover
◼️ Advantages of a Money Back Policy
- Returns Accrue Only After a Few Years
- Value of Money Higher with a Money Back Policy
- Insured Receives the Full Sum Assured on Maturity
- Insurance Cover at the Same Time as Investment Returns
- Bonus at Maturity Significantly Increases the Overall Payout
- Counters Vitality of Market-Linked Investments
- Secure Investments with a Money Back Plan
- Tax Savings with a Money Back Plan
◼️ Benefits & Components of a Money Back Policy
- Survival Benefits
- Death Benefits
- Maturity Benefits
- The sum assured
- The remaining survival benefits
- The bonus
- Sum Assured
- Bonus Amount
- Reversionary Bonus
- Terminal Bonus
◼️ What are retirement plans?
These are specially designed investment plans that let you save money, until you retire; to reap the fruits you had sown. From the day you buy a retirement plan, you contribute a certain amount to it on a regular basis. When your income stops on retirement, you start getting a steady income at regular intervals from your retirement plan. Very often, these plans also provide life insurance cover. Thus, along with wealth accumulation you also get life insurance cover.
◼️ How are retirement plans paid?
Retirement plans can be paid by single premium or systematically at regular intervals. Every retirement plan comes with its own benefits and payment modes. Before buying any plan please read the sales brochure carefully.
◼️ Key terms
As you review retirement option plans, you are likely to hear these three common terms:
- Accumulation phase: The period you are paying premium to build a retirement corpus. These are your working years when you earn a steady income.
- Vesting age: The age you choose to start receiving pension/income. Ashish proposes to retire at 58. So that would be his vesting age.
- Annuity phase: The period after your retirement when you receive the pension/income.
◼️ Types of retirement plans
- Deferred and Immediate Annuity
- Benefits of retirement policy
An endowment policy is a life insurance plan designed to pay a lumpsum amount to you on completion of a predetermined term or to your beneficiaries on death. So it provides life cover and gives returns on your investment on policy maturity. It is a kind of forced savings and especially attractive for those who want some returns on premiums.
This plan has triple benefits – savings, wealth creation and insurance coverage. It is the right one for any age and income group.
◼️ Why do you need it?
- It is low risk.
- Helps you invest systematically and save regularly.
- It is not mere insurance but gives additional plan advantages like double endowment, education endowment and marriage endowment.
- Provides financial security for the family in case of your unexpected death.
- You can add riders to it, like critical illness, etc.
- You can avail of tax benefits on premium under Section 80C and on maturity benefits, death claim and surrender value under Section 10 (10D).
◼️ What are Guaranteed Returns Plans?
Guaranteed Returns Plans are non-participating monthly income schemes provided by financial institutions. In these plans, the policyholder will pay a yearly premium for the plan’s tenure. The insurer will decide the tenure as per their age and financial situation. Once the policy reaches maturity, the policyholder will start receiving guaranteed payouts similar to the monthly income earned by the policyholder. The payout amount will depend on the insurance coverage that the policyholder chooses, the premium amount they pay and the sum assured on the plan. Therefore, the policy term includes the period for which the policyholder must pay the premium and the period for which the policyholder gets the payout.
These plans work quite well for individuals looking for assured returns in their golden years. Some of the features of these plans are listed below.
◼️ Features of Guaranteed Returns Plans:
- Tax-free monthly payouts
- Twice the guaranteed income
- Assured protection
- Immediate payout
- Flexible payout options
◼️ Benefits of Guaranteed Returns Plans:
- Second income source
- Maturity benefit
- Tax benefits
- Family security
The full form of ULIP is Unit Linked Insurance Plan. A ULIP is an insurance plan that offers the dual benefit of investment to fulfil your long-term goals, and a life cover to financially protect your family in case of an unfortunate event. The premium paid towards a ULIP is divided into two parts. A part of it is contributed to your life cover, and the remaining is invested in the fund of your choice. You can choose to invest in equity, debt, or a combination of both funds as per your risk appetite and goals. This makes ULIPs an ideal investment option for you and your family’s long-term goals.
◼️ 5 Benefits of investing in ULIPs
- Freedom to choose your Life Cover
- Freedom to choose your investment type
- Liquidity
- Goal based planning
- Tax benefits
◼️ How does a ULIP work?
ULIPs are a category of life insurance plans that provide you with the benefit of growth of your money along with a life cover. They do this by investing a part of your premium towards a life cover for you, and the rest in funds of your choice. Most ULIPs give you the option to choose from multiple equity and debt funds. You can also invest in a mix of both types of funds as per your risk appetite. The returns from your plan will depend on the performance of the fund chosen by you.
◼️ All about NRI Investment in India
A number of non-resident Indians who wish to invest in the country may have many questions on their mind, such as the investment options available to them and the process involved in investing.
◼️ To begin with, NRIs can invest in the following products in India:
- IPO
- Mutual funds
- Secondary market transaction: Trades in SEBI registered stock exchanges in India
- Portfolio management services (PMS)
- Derivative trading: Futures and Options
- Bonds
- Alternative Investment Funds (AIF)
NRIs must have a saving bank account before they start to invest. There are two types of bank accounts NRIs can operate depending upon their income:
- Income from India: Non-Resident Ordinary (NRO) Bank Account
- Income out of India: Non-Resident External (NRE) Bank Account
Both the accounts are savings accounts maintained in Indian Rupees. You can remit your foreign income earned outside India in NRE bank account, which is fully repatriable. Income in India is parked in NRO bank account, which is partially repatriable.
To make direct equity investment by trading on recognised stock exchanges in India, NRIs need to open PIS bank account – a type of saving bank account that will only have secondary market transaction and charges, and TDS applicable.
