Savings Plan
Saving schemes or plans are an important part of financial planning and long-term financial stability. Additionally, investing in the suitable saving plan is essential for medical emergencies, post-retire...Read More
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What is 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 emphasize 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. Saving & Investment 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.
Why Do You Need Savings Plan?
Most of us think of money as something that should be preserved for the future, and there is appropriate reasoning behind this thinking. Generally, the Indian population places a high value on security, which is why it makes sense that we begin saving money now to plan for financial stability and security in the future.
Furthermore, you may need a financial contingency plan more than the next person unless you work for the government. Since the job market today is volatile, the reassurance of a savings plan can make a significant difference in your financial planning.
Importance of buying a Saving Plan
While some of your objectives may depend on your abilities rather than financial resources, others need the support of sufficient funds. For example, the best savings plan can help you provide for your child’s higher education or marriage expenses.
Here are a few additional reasons why it's important to focus on savings scheme:
1. Systematic Savings
Aside from the substantial returns, one of the essential advantages of a savings plan is that it instils in a person the discipline of saving. The best saving scheme helps people to develop a habit of saving, specifically, a practice of systematic and disciplined saving.2. Flexibility
Everyone is unique and has their own set of goals and aspirations. As a result, while selecting the best savings scheme, you must consider the flexibility of a savings plan and select a tailored plan based on an individual's future goals and risk tolerance.3. Liquidity
In the event of an emergency, regardless of the premium-payment or policy duration, you can withdraw funds totally or partially from your savings scheme after the five-year lock-in period. This may depend on the specific policy terms and conditions, so remember to check it before purchasing a savings scheme.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 –
- Review and compare different plan features and benefits to choosing one that aligns with your future needs
- Check whether the savings plans offer flexibility to withdraw money in case of any emergency needs
- Look for different rider options to avail of additional benefits and maximize policy coverage
- Use a savings and income calculator to determine the ideal coverage and premium payable towards the savings plan
How to buy Savings Plan in India?
Investing your money in a savings scheme is only the first step toward a prosperous future. The second but equally important factor in determining the success of your investment and financial goals is proper savings planning. It can be difficult to choose the right long-term savings scheme.
However, if you know what you want, finding the best savings plan in India becomes easier:
1. Online Availability
Online savings schemes have simplified investments considerably, especially for the modern investor. It is time-saving, seamless and allows you to find the relevant information with just a few clicks. You can also manage your money better by keeping track of the savings scheme online.2. Tax Saving Opportunities
When it comes to long-term investments like saving schemes, your tax-saving position is also crucial, as tax responsibilities can eat into your return. In your long-term savings plan, you should aim for investments and maturity value that allows tax deductions or exemptions. Tax benefits are as per prevailing tax laws subject to change.3. Investment Terms
The investment terms of the savings scheme make it effective regardless of your income frequency. You should look for a favourable investment period and mode (monthly, quarterly, half-yearly or annually) to put your money in the best saving plan in India.Why Choose a Savings Plan by Max Life Insurance?
Max Life Insurance offers a variety of savings schemes with comprehensive protection and wealth-growth opportunities. Whether you are looking for the best savings plan in India to finance your long-term or short-term goals, you can find a policy suitable to your needs.
The plans are specifically designed to help you deal with life’s uncertainties by keeping a disciplined savings habit. Besides, you can plan for milestone events in life with the help of the best savings schemes while enjoying the life cover.
Most importantly, since each individual has unique financial needs, there are savings schemes with varying features which can suit individual needs more appropriately.
How Long Should You Invest in a Savings Plan?
The duration of your investment in a savings scheme would depend on the objective behind the investment – whether it is to fulfil long-term or short-term financial goals. Consider what you are investing for and how liquid or accessible you need your money before deciding on a short- or long-term investment.
Establishing a timeline can be useful in this process. For example, a savings scheme to fund your child’s higher education, a dream trip to another country, or simply save up for retirement.
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 benefits4
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
Saving Plans 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 suitable saving 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.
Tax benefits as pre prevailing tax laws subject to change.
Types of Savings plans
Different types of savings and income plans include:
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
(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 –
- Flexible-Premium Payment Tenure and Policy Term
- Partly guaranteed payment of the lump sum amount on the maturity
- Tax savings under Section 80C and Section 10(10D) (as per existing tax laws)
- Life insurance protection for your loved ones
2. Max Life Monthly Income Advantage Plan
(A Non-Linked Participating Individual Life Insurance Savings Plan, UIN: 104N091V06) 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 –
- Monthly income for up to 30 years after completion of premium payment tenure
- Accrued bonuses including Terminal Bonus on maturity
- Insurance cover payable to your family as a death benefit in case of your untimely demise
(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 –
- Life insurance coverage till 110 years of age
- Guaranteed payouts upon maturity with company bonuses
- Flexibility to withdraw money
4. 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 –
- Guaranteed lump sum benefit payout upon maturity
- Flexible Policy Term and Premium Payment Options
- Immediate payment of lumpsum death upon the demise of the life insured
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 benefits4 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
d. 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
Partial withdrawal is the feature offered in some savings schemes, where the investor can encash/withdraw any part of the fund during the policy term. This feature is available as policy terms and conditions.
Long-term investments allow you to expand your portfolio and achieve your objectives over several years. Short-term investments are intended for goals with shorter timelines, giving the investor access to the funds sooner. You can choose the savings scheme with a duration, depending on the timeline of expected returns.
If you are looking for savings scheme that can help you with immediate financial challenges, going for short-term plans can be helpful. Although, short-term savings schemes normally provide return over time, they are highly liquid investments that allow investors to make money rapidly if needed.
Some of the best saving schemes in India are the Personal Provident Fund(PPF), Senior Citizen Savings Scheme, National Savings Certificate, etc.
The above mentioned name of generic saving plans and saving life insurance plan are assumed examples.
ARN NO: PCP/1032022
www.nsiindia.gov.in/InternalPage.aspx?Id_Pk=89
www.nsiindia.gov.in/InternalPage.aspx?Id_Pk=55
www.indiapost.gov.in/Financial/pages/content/post-office-saving-schemes.aspx
www.nsiindia.gov.in/InternalPage.aspx?Id_Pk=134
www.incometaxindia.gov.in/Pages/tools/deduction-under-section-80c.aspx
www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11865&Mode=0
www.rbi.org.in/Scripts/FAQView.aspx?Id=79
Choose a Max Life Savings & Income Plan
Check out the different Online Insurance Plans from Max Life!
Customer Reviews
Savings and Income Plan
“I came across Max Life Savings Plan a few years ago when I was researching the market for savings options. I invested in the policy soon after. The plan suits my exact requirements in terms of meeting my savings goals, sufficient life coverage, and maturity benefits.”
Mr. Pal, 35 years
Savings and Income Plan
“My husband had invested in Max Life on the recommendation of his friend. Our family expenses were totally dependent on this insurance fund for several years after his death. I must say that this insurance provided a huge support to my family during the difficult times.”
Mrs. Kapoor, 38 years
4.2
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Read MoreWhy Choose Max Life
(Source : Max life annual audited financials FY 20-21)
(Source : As reported to IRDAI, FY 20-21)
In force (individual) (Source : Max Life Public disclosure, FY 20-21)
(Source : Max Life Public disclosure, FY 20-21)
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