Savings Plan
Savings Plan
Even as a child, our parents never stopped teaching us the value of having a long term savings plan. You may remember how, as a child, the best saving plan for you was to collect any spare change in the piggy bank.
Even while growing up, our parents would continuously emphasise on the merits of saving money for the rainy days. The underlying reason behind all these habits is the importance of having disciplined savings throughout life. Max Life Insurance Savings Plans can help you get onboard the savings train by building a corpus, create a stable source income, and secure the financial future of your loved ones, even in your absence.
What Are Saving Plans?
Savings and Income plans are mostly life insurance products that are designed to encourage disciplined savings while helping you earn guaranteed returns throughout the policy tenure.
Based on your needs and the selected saving plan, you can choose to avail of either monthly income or lump sum payouts from the plan.
Being a life insurance product, a saving plan also provides substantial benefits such as –
1. Tax deduction benefits under Section 80C of the Income Tax Act 1961
2. Financial Protection against terminal illnesses^
3. Comprehensive death benefits to your family (in case of your untimely demise)^
What Are Saving Plans?
Savings and Income plans are mostly life insurance products that are designed to encourage disciplined savings while helping you earn guaranteed returns throughout the policy tenure.
Based on your needs and the selected saving plan, you can choose to avail of either monthly income or lump sum payouts from the plan.
Being a life insurance product, a saving plan also provides substantial benefits such as –
1. Tax deduction benefits under Section 80C of the Income Tax Act 1961
2. Financial Protection against terminal illnesses^
3. Comprehensive death benefits to your family (in case of your untimely demise)^
By purchasing a savings plan that protects your family’s financial needs against contingencies, you can make sure that your loved ones continue to thrive throughout their lives, while you be worry-free.
By purchasing a savings plan that protects your family’s financial needs against contingencies, you can make sure that your loved ones continue to thrive throughout their lives, while you be worry-free.
Benefits of Savings Insurance Plan
Saving insurance plans in India offer the following benefits –
1. Long term wealth accumulation
2. Financial protection throughout the life
3. Guaranteed payouts to support your life goals
4. Tax saving benefits
5. Life insurance protection for family
Features of Saving insurance Plans
Saving plans offer a variety of features that can help you fulfil your goals. Here are some highlights of saving plans that you must consider before choosing the right savings plan for your family –
1. Entry Age and Policy Tenure
SavingPlans usually offer a wider entry age bracket while providing options to customise the investment tenure or policy term according to your needs. The entry age helps determine your risk appetite (as the policyholder), which in turn, will help you personalise the savings based on your risk profile.
Furthermore, you can modify the policy term and investment tenure as per plan options (between mid- to long-term investments) to allow accumulation of significant corpus throughout the policy tenure.
2. Life Cover and Rider Options
1. Entry Age and Policy Tenure
SavingPlans usually offer a wider entry age bracket while providing options to customise the investment tenure or policy term according to your needs. The entry age helps determine your risk appetite (as the policyholder), which in turn, will help you personalise the savings based on your risk profile.
Furthermore, you can modify the policy term and investment tenure as per plan options (between mid- to long-term investments) to allow accumulation of significant corpus throughout the policy tenure.
2. Life Cover and Rider Options
By choosing the suitablesaving plan for your family, you can leverage the dual benefits of guaranteed benefit and life insurance coverage or market linked return+ life Insurance coverage. You can add different riders or add-ons to avail of more comprehensive policy benefits.
These riders, along with the significant life cover help enhance the financial protection under the policy against accidental death, life-threatening ailments, and disability.
3. Tax Benefits
Saving plans also work as excellent tax saving instruments. The premium amount up to Rs. 1.5 lakh that you pay towards most life insurance savings plans is tax-deductible under Section 80C of the Indian Income Tax Act, 1961.
On the other hand, the maturity and death benefits offered under the savings plans are also tax-exempt under Section 10(10D) of the Indian Income Tax Act, 1961, thus, helping to maximise your tax savings.
Who Should Buy A Savings Insurance Plan?
A saving plan is the ideal instrument if you are looking for –
a) Steady income through disciplined savings
b) Wealth accumulation to help take care of your loved ones’ future
c) Comprehensive life insurance coverage
Thus, purchasing a savings Insurance plan is the right decision for you if you are a –
1) Young investor
2) Recently married
3) Young parents with children
4) Nearing retirement
How to Choose the Best Saving Plan?
To choose one of the best saving insurance plans in India, it is advisable that you first identify your goals – both short and long-term, while keeping in mind your current liabilities, savings, and family’s financial requirements.
Here are a few things that will help you compare and choose the best saving plan for your loved ones –
1) Review and compare different plan features and benefits to choosing one that aligns with your future needs
2) Check whether the savings plans offer flexibility to withdraw money in case of any emergency needs
3) Look for different rider Options to avail of additional benefits and maximise policy coverage
4) Use a savings and income calculator to determine the ideal coverage and premium payable towards the savings plan
Types of Savings plans
Monthly Income Plans
Money-Back Plans
Endowment Plans
Unit Linked Insurance Plan (ULIPs)
National Savings Certificate (NSC)
National Savings Scheme (NSS)
Public Provident Fund (PPF)
Post Office Savings Scheme
Senior Citizen Savings Scheme (SCSS)
Sukanya Samriddhi Yojana (SSY)
Atal Pension Yojana
Employee Provident Fund (EPF)
National Pension System (NPS)
Kisan Vikas Patra
Which Max Life Savings Insurance Plans Might Suit You?
At Max Life Insurance, you can choose from the following savings and income insurance plans –
1. Max Life Savings Advantage Plan
Max Life Savings Advantage Plan (A Non-Linked Participating Individual Life Insurance Savings Plan, UIN: 104N111V02) helps accelerate the growth of disciplined savings so that you can build a substantial corpus to support your life goals. At the same time, the plan provides life insurance protection to your loved ones against all contingencies.
Max Life Savings Advantage Plan offers the following features and benefits –
a) Flexible-Premium Payment Tenure and Policy Term
b) Partly guaranteed payment of the lump sum amount on the maturity
c) Tax savings under Section 80C and Section 10(10D) (as per existing tax laws)
d) Life insurance protection for your loved ones
2. Max Life Monthly Income Advantage Plan
Max Life Monthly Income Advantage Plan (A Non-Linked Participating Individual Life Insurance Savings Plan, UIN: 104N091V05) helps keep your family financially secure in the wake of life’s uncertainties. This way, you are not hard-pressed to worry about meeting commitments towards your loved ones.
Max Life Monthly Income Advantage Plan offers the following features and benefits –
a) Monthly income for up to 10 years after completion of premium payment tenure
b) Accrued bonuses including Terminal Bonus on maturity
c) Insurance cover payable to your family as a death benefit in case of your untimely demise
3. Max Life Guaranteed Income Plan
Max Life Guaranteed Income Plan (A Non-Linked Non-Participating Individual Life Insurance Savings Plan, UIN: 104N085V04) is essentially a savings plan that provides both life cover benefits and guaranteed payouts in the form of monthly income.
The payouts are made over a ‘Payout Period’ of 10 years, and in case of any immediate financial need, you can choose to receive a lump sum amount instead of monthly income as payouts.
Max Life Guaranteed Income Plan offers the following features and benefits –
a) Guaranteed income for ten years that doubles after five years
b) Immediate payouts upon maturity with no waiting period
c) Guaranteed death benefit with flexible payout options - lump sum or monthly income
4. Max Life Whole Life Super
Max Life Whole Life Super (A Non-Linked Participating Individual Life Insurance Savings Plan. UIN - 104N080V04) is the best saving plan to help you build a corpus through systematic investments. You can avail of a life cover under this plan while benefiting from additional company bonuses till you are 100 years old.
Max Life Guaranteed Income Plan offers the following features and benefits –
a) Life insurance coverage till 110 years of age
b) Guaranteed payouts upon maturity with company bonuses
c) Flexibility to withdraw money
5. Max Life Assured Wealth Plan
Max Life Assured Wealth Plan (A Non-Linked Non Participating Individual Life Insurance Savings Plan UIN: 104N096V04) is a savings and income plan that can help you support your life goals financially. Be it retirement, or supporting your child’s higher education, the plan will provide guaranteed assurance.
Max Life Assured Wealth Plan offers the following features and benefits –
a) Guaranteed lump sum benefit payout upon maturity
b) Flexible Policy Term and Premium Payment Options
c) Immediate payment of lumpsum death upon the demise of the life insured
6. Max Life POS Guaranteed Benefit Plan
Max Life POS Guaranteed Benefit Plan (A Non-Linked Non-Participating Individual Life Insurance Savings Plan (UIN - 104N097V04) is one of the best savings plans that can help you fulfil your dreams. The plan comes with an easy-to-comprehend policy structure, hassle-free purchase, and guaranteed insurance benefits.
Max Life POS Guaranteed Benefit Plan offers the following features and benefits –
a) Guaranteed Financial Protection Throughout the Policy Tenure
b) Fixed policy Tenure and Premium Payment Term
c) Easy to understand policy structure and claims process
Sources –
[1]https://www.cnbc.com/2017/02/22/heres-how-much-money-you-should-have-saved-at-every-age.html
Savings Plan – FAQs
Savings Plan – FAQs
By the age of 25 years, you must try to save up to 25% per cent [1] of your gross income (before taxes and deductions). For example, if you are earning Rs. 5 lakh per annum by the age of 25, you must save up to Rs. 1.25 lakh in savings each year, which can be used to invest in different savings plans based on your preferences and requirements.
Ideally, an average person must try to save as much as their age. In other words, individuals must save the same percentage of their gross annual income as their age – a 25-year-old working professional must save at least 25% of his or her yearly salary, while a 40-year-old must save at least 40% of his or her income.
As your age increases, you must work towards increasing your savings, so that you have adequate financial backup to support your life goals and suffice your life after retirement.
As a working professional, it is crucial that you balance your savings and investments. At the same time, you may choose to invest in a savings plan that offers both insurance cover and market-linked returns on investments or guaranteed return. At the same time, you must have enough savings to manage any emergencies and pay for short-term goals.
Ideally, you must have between three to 12 months of income as savings before you venture out to invest in higher-risk financial instruments.
You can choose from the different savings Insurance plans available by comparing their features, benefits, year-on-year returns, and your financial risk appetite. Accordingly, you can select the best savings plan that aligns with your goals and premium payment capabilities.
You must keep the following points in mind while choosing the best saving plan for your family –
a) Segregate your goals into short-term and long-term
b) Determine your total spending and savings (after considering all exiting expenses and debts)
c) Review and compare different savings plans available online
d) Choose a savings plan that offers maximal life insurance protection in term of lumpsum Sum Assured
e) Review the year-on-year performance of the savings plan to determine how returns are accrued on the same
Savings plans are mostly financial instruments that help you secure your long-term and short-term goals financially. You invest a certain amount towards a savings plan, which is then allocated into different money-market instruments to earn returns and grow your savings corpus.
Savings and income insurance plans from Max Life Insurance are life insurance products that provide opportunities to grow your savings through market-linked returns while protecting your loved ones against life’s uncertainties with insurance protection.
Savings and income plans offer significant tax saving benefits under Section 80C of the Income Tax Act 1961. Accordingly, the premium amount that you pay towards the saving plan is eligible for deduction from your total taxable income, up to Rs. 1.5 lakh.
In other words, you can reduce your total taxable salary by up to Rs 1.5 lakh that you invest as premium towards a savings plan.
Purchasing a savings plan is the right decision for you if you are a –
a) Young investor
b) Recently married
c) Young parent with children
Nearing retirement
Here is how you can start on your journey of long term financial security with a savings plan -
a) Review and compare the features and benefits of different savings Insurance plans available online
b) Opt for the maximum policy tenure and policy benefits based on your requirements
c) Set up automatic premium payments using the ECS (Electronic Clearing Service)
d) Establish savings buckets depending upon your goals and investment tenures
