Saving is the most important habit that a person is taught from an early age. Saving helps in achieving goals and securing the future. There are savings plans that you invest in after growing up that will help you save a small part of your earnings to secure your future and the future of your loved ones. There are various saving plan options in India that you can opt for to save for your future, but there are some factors that you need to consider.
Things to consider before investing in a savings plan:
Before choosing the best savings plan for yourself, you need to understand the level of risk you are willing to take. Typically, there are two types of savings plans – Guaranteed Savings Plans and Non-Guaranteed Savings Plans. Guaranteed plans offer 100% guaranteed policy benefits. Non-guaranteed plans allow the policyholder to participate in overall company’s returns and thus able to avail non-guaranteed benefits mostly known as ‘bonus’ along with a portion of guaranteed returns too. Mostly the overall returns of non-guaranteed returns are higher than guaranteed plans as there is higher risk associated with the latter.
The goals that you have:
Another factor that you should consider before investing in the savings plan is your primary goal. You should know the purpose of choosing the savings plan so that you can easily achieve it. It will help you plan future investments accordingly and save considerable money. For example: depending on your requirement, you may want to choose between an endowment plan (which gives you a lump sum at Maturity) or an income plan (which gives you a regular at intervals that you can choose).
Before investing in the savings plan, you also need to know the duration for which the amount will be invested. There are various types of plans, from medium-term to long-term investments, and you can choose according to your needs. If you want to start with something other than big investments, then you can go for small investments and build them over time.Having said, it is important that you continue the plan and realize your goal that you planned for.
The flexibility in the savings plan:
To fulfill your goals, you need to choose a plan that is flexible for you. The plans typically offer various combinations of years for which you need to make the premium payments for and the years for which the policy will continue. Choose the option which suits you best. Make sure that the plan offers you flexibility in terms of withdrawing or surrendering the policy in case of exigency, although surrendering a policy is not recommended as you tend to lose a large portion of your savings in doing so. There are other flexibilities which plans can offer you like income options, rider options,
Prices of the savings plan:
One of the essential facts that you need to keep in mind is the charges and prices that are there for the savings plan that you are choosing. Choose a plan that that will offeryou the maximum returnson your savings along with the other benefits.
Saving is the most important habit that everyone should develop because you never know when you will need money. Unexpected events may occur, and this is where the savings plan comes into play. It assists you in securing your future and the future of your loved ones. So, select a plan that will provide you with higher returns while also allowing you to meet your objectives.