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Life is a journey. While most of the times its fun there might be some rainy days as well and it is important we deal with this situation with proper financial resources. However, this is all possible if we have an approach towards savings. And for this you need to build a sound and effective savings plan.
Although there are various investment tools available in markets such as gold, silver, mutual funds, bonds and securities, equities, fixed deposits etc. savings insurance plan are one of the best modern day tool for savings. Savings plan offer you an insurance cover on your life and additionally help you grow and develop a body of wealth through market linked investments. These plans help you meet all your unforeseen needs without any hassle. This way you will never have to worry about sudden financial shortage and can continue earning money through these market linked investment funds on your plan. These plans provide cover for specific period as well as you're eligible for sum assured or bonuses as decided by your policy.
One-size-fits-all is not how insurance companies work for plans. Elements like income sources, number of dependents, there requirements, short or long term goals, future projections, inflation are few of the things to be considered for building your savings plan. Every plan is unique. Though each plan is unique, certain important factors that one must keep in mind while selecting the best savings plan are as follows:
Requirements:
You need to determine the timeframe till when you require the plan. Taking into consideration the inflation costs, family future needs, existing debts and asset in hand you have to work upon a plan that way. Once you work properly you can expect good returns and use it for meeting your goals and desires.
Charges
It is important you keep a tab on charges applicable on plan. Administrative, fund switching, processing, surrendering are some of the charges applicable. Charges in savings plan are flexible in terms of cash withdrawal, bonus receipt and term of the policy.
Plan features
All plans have different characteristics and every plan has a unique element that sets them apart. In your best saving plans, you can make partial withdrawals by surrendering only a certain portion of the policy while retaining the benefits. You're eligible for bonuses as decided by the insurance companies. Some plans cover you for entire life while some for a specific period. On a comprehensive cover and flexible options you can save with complete protection and enjoy compounding growth in your savings.
Flexibility
While planning for a long term goals, trust savings plans as they will help you take care of your unexpected small term needs. You have the flexibility of fund switching and surrendering your policy as and when the situation demands which can help you produce requisite result.
Risk Appetite
Know your risk appetite well. Understand your income sources, asset in hand. If you're comfortable with equity funds move ahead, build your earning and sideline them into debt funds to produce steady and long term returns. If you don't believe in risking then invest in debt funds, however, they fetch low returns right from the start. Ideally speaking when you're young go for long-term plans with equity funds as you can counter any losses and manage to build average returns out of your premium paid in your best savings plan.
By ankita gore
