A savings policy, also known as an endowment insurance policy, is a financial product that combines life insurance coverage with disciplined savings. It helps individuals accumulate wealth over time while providing financial security to their families in case of unforeseen circumstances. These policies ensure a guaranteed payout on maturity or to the nominee in case of the policyholder’s demise.
A savings policy is particularly beneficial for salaried individuals, small business owners, and professionals such as doctors and lawyers who seek low-risk investment options with guaranteed returns. It is an ideal choice for those looking for long-term financial stability without market volatility concerns.
A savings insurance policy works on the principle of regular premium payments that accumulate into a corpus over time. Here’s how it functions:
Unlike market-linked investment plans, savings policies offer assured maturity benefits, making them a safe investment option.
The policy ensures financial protection for dependents through life insurance coverage, helping them in case of the insured’s demise.
A savings insurance plan encourages a habit of systematic savings, ensuring financial stability in the long run.
Unlike mutual funds or stocks, savings insurance policies are low-risk investments, making them ideal for conservative investors.
Depending on the policy, you can choose lump sum payments, regular income, or periodic payouts.
Many savings plans offer reversionary bonuses and terminal bonuses, enhancing the total payout amount.
These plans offer a lump sum payout on maturity or to the nominee in case of the policyholder’s demise.
Provide periodic payouts at predefined intervals, ensuring liquidity throughout the policy tenure.
These policies provide fixed income at regular intervals after a certain period, making them ideal for post-retirement planning.
Designed to secure a child’s future, these plans ensure education funding and financial stability in case of the parent's demise.
A combination of investment and insurance, offering market-linked returns with life coverage.
Determine whether you need a policy for education, retirement, wealth accumulation, or financial security.
Evaluate policies based on sum assured, policy tenure, premium amount, and benefits.
Opt for plans that offer reversionary and terminal bonuses to maximize returns.
Choose a policy that provides options for monthly, quarterly, or annual premium payments.
Ensure the policy qualifies for tax deductions under Section 80C and tax-free maturity under Section 10(10D).
Check the insurer’s claim settlement ratio (CSR) to ensure hassle-free claims in the future.
Identify your financial needs and the purpose of the policy.
Use comparison tools to analyze features, returns, and benefits of different savings plans.
Select an insurer with a strong financial background and high claim settlement ratio.
Pick a tenure that aligns with your financial goals and choose a premium amount that fits your budget.
Understand the policy exclusions, surrender value, and loan options before purchasing.
After finalizing the plan, pay your first premium online or offline to activate the policy.
