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3 Special Scenarios When Guaranteed Savings is Your Only Option

dateKnowledge Centre Team dateJune 15, 2021 views292 Views
Retirement Planning | Buy the Best Saving Plan | Retirement and Pension Plan

Guaranteed is a very comforting word, especially when it comes from a credible source. You may have heard this word often in routine conversations, or at the neighbourhood store when the salesman tried selling you an appliance or a gadget. When these verbal assurances are backed by a document issued by a legitimate, reputed authority, it gives you peace of mind that the Guarantor will step in if things go wrong. Simialrly, returns are guaranteed in some of the life insurance plans, and hence, they are known as Guaranteed Savings Plan. Let us understand about the plan in details.

What are Guaranteed Savings Plan?

Guaranteed saving plans are long-term safe investment plans with guaranteed returns. These plans not just offer a guarantee on the maturity value but can also offer protection of your financial goals in case of a mishap.

So, if your life continues without hiccups and you continue to invest your family is assured a specific maturity value. However, even if you cannot be there to continue investing due to early demise, the plan will continue to receive investments. Thus, giving your family the maturity value, you intended even after your death.

Guaranteed Savings Plan and Guaranteed Income4Life from Canara HSBC Oriental Bank of Commerce Life Insurance are two such plans. In this plan, you can choose the premium protection option, which enables the insurer to invest on your behalf if anything happens to you.

When is a Guaranteed Plan your Only Choice?

What do you think of when you visualize your future though? The future is unpredictable despite all the plans you make and dreams you cherish. You aspire to take care of your ageing parents, dream of sending your child to the west and hope to lead a comfortable life with your spouse before and after retirement. Well-wishers advise you to invest in stocks and real estate.

But you hesitate because you do not have the expertise. Also, the returns are unpredictable. You have loads of financial commitments and would like to refrain from taking chances. Any wrong moves can affect your dependent parents, your homemaker spouse, and your little kid.

Here are three such financial goals where you would like all guarantees, especially when it comes to financial matters:

1. Child’s Higher Education Goal

You want your child’s education to continue without any hiccups and interruptions for want of money. Child insurance plans can help you ensure this continuity. A child policy has single purpose-to help your child achieve the goal even if you cannot be there to ensure the same.

If you want to stay away from the stock market, you must invest in endowment plans that offer a guaranteed maturity value. This assures you of the amount you will receive at the end of the term. These policies have a limited premium paying term so that you do not have to keep investing throughout the policy tenure.

For example, if your child is 5 years old, and you buy a child plan of 15 years term, you can opt to pay premiums for, say, 10 policy years, i.e., when your child turns 15. From the age of 18 years, s/he can receive annual pay outs that can help finance undergraduate education.

Also, on maturity, you will get the guaranteed Sum Assured + accrued bonuses, if any. You may use this amount for post-graduate education or marriage.

2. Financial Safety of Spouse

Guaranteed Savings Plan is a comprehensive instrument designed to meet multiple objectives such as wealth creation, insurance cover, and tax benefits. All investments in Guaranteed Savings Plan are deductible, under section 80C, from taxable income. In case of untimely demise, the family gets higher of the following as a lumpsum amount.

a. 11 times the annual premium

b. 105% of premiums paid until the death

c. Sum Assured

This assurance will help you remain stress-free and ensure that your spouse gets a lumpsum amount that should financially secure future expenses.

3. Financial Support for Parents

With increasing uncertainties in health due to unpredictable illnesses worldwide, it is natural to be concerned if you are the sole breadwinner in the family. Your aged parents may also be dependent on you for financial support. The Guaranteed Income for Life is the best monthly income scheme in India if you are looking for an income stream to match a future expense, such as post-retirement. You can choose to invest for a specific period (say 10 years) and defer the pay outs by another 5 years. You can also opt to receive the future regular income pay-outs as a lump sum calculated as the current value of the amount.

The policy also offers some valuable additional features under the premium protection option. Premium protection will financially secure the goal in case of your death or disability within the policy tenure. Some key highlights of this plan:

  • Future premiums are waived off in case of untimely demise or permanent disability
  • In case of untimely demise, the family will receive the sum assured immediately. The family will receive the fund value at the time of maturity-either in regular income streams or as a lump sum

Guaranteed savings plans are ideal if you are a risk-averse investor looking at a sustainable income flow to support your dependants and achieve your life goals. The best savings policy issued by life insurance companies such as Canara HSBC Oriental Bank of Commerce Life Insurance is reliable because of the brand trust, legacy of operations, and excellent track record.

12 Ways a risk-averse investor gets guaranteed savings.

As you cannot compromise on your financial goals, exploring Guaranteed Savings Plans is the best way forward. Savings plans offered by Canara HSBC Oriental Bank of Commerce Life Insurance are one of the best investment plans in India that give Guaranteed Savings + Insurance Cover + Other Benefits.

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Frequently Asked Questions

How Savings Plans by Canara Help You?

Every person has a unique reason to save and invest. With ULIP savings schemes, the company caters to people seeking wealth creation through capital appreciation. Contrarily, the traditional plans can help you save for important life goals without worrying about the fluctuation in fund value. All major savings plan offers partial withdrawal facility that can help you take care of unplanned contingencies. With savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance, you get adequate flexibility while investing and receiving the savings benefits.

Who should invest in a Savings Plan?

Savings plan require you to invest a pre-decided amount on a regular basis. People with a regular stream of income who require a lump-sum amount after a period should opt for a savings plan. Working professionals, self-employed people and businessmen should consider a savings plan to meet their long-term financial obligations. Savings plans are also ideal for people who are risk-averse and want to accumulate funds through relatively safer mediums. These plans inculcate financial discipline in policyholders which make them crucial for every portfolio.

What is saving plan?

A savings plan is likely to be different for everyone depending on the financial goal, risk profile, returns, and investment horizon. If you are young and want to save for your retirement, ULIPs like Invest 4G or Titanium Plus plan would be the best option. You are likely to create a large corpus by your retirement through market-linked returns. If capital protection is your aim, then traditional insurance plans such as Guaranteed Money Saving Plan should be suitable for you.

How much money should you put in savings each month?

The amount that should be invested in a savings plan each month depends on the income, existing financial obligations and the long-term financial goal. If you have a steady income, you should save at least 20% of your monthly income. It is not necessary to invest your entire money into a savings scheme as investments should be diversified. Ideally, you should aim to have a financial buffer of over 10 times of your annual income.

Read More
Saving plan for retirement

The Invest 4G plan with its multiple investment options and various portfolio management strategies for capital protection is an ideal saving plan for retirement.

Saving plan for future

The Smart Goals plan with its unique features such as modification of the sum assured partial withdrawal and fund switch can help you plan for your long-term financial goals.

Saving plan for girl child

The Future Smart unit-linked plan from Canara HSBC Oriental Bank of Commerce Life Insurance is the ideal savings plan for the girl child.

Where should I invest my money?

You should spread your investments across financial instruments. However, having a suitable savings plan in your portfolio is extremely important. It ensures financial stability and also helps in fulfilling short, medium and long-term monetary goals.

What is a good age to start saving money?

When you plan to invest in a financial product, it always pays well to start early. The earlier you start saving and investing, the better. When you start investing early, the capital gets adequate time multiply. Even a small amount invested for a long time can give substantial returns due to compounding.

Tax Saving Investment for retired mother

Savings plans are tax-efficient investment instruments. Samridh Bhavishya traditional savings scheme designed to ensure regular income after retirement is the best savings plan for retired mothers.

Should you use a savings plan for retirement planning?

Yes. Retirement planning is one of the most important financial decisions of our lives. Saving plans offer a host of features that may help you build your retirement corpus. Some of the saving plans like Guaranteed Income4Life offer guaranteed returns at policy maturity. Such returns can act as a regular income stream even after your retirement to help you stay financially stable.

Are saving plans beneficial for managing unexpected expenses?

Yes. Best saving plans in India offer partial withdrawal system that can be utilized during your rainy days. Being financially prepared to tackle such odds will help you manage any unforeseen expenses in a smooth manner.

How to save tax by using savings plan?

Saving plans are known for helping us achieve our financial goals. Best saving plans allow you to grow your wealth while providing life cover. Saving and investment plans are also beneficial for tax planning. Premiums of savings cum protection plans come with tax benefit under Section 80C of the Income Tax Act. Moreover, proceeds received upon the death of the policyholder or upon the maturity of the policy are tax free under Section 10 10(D).

What is the right age to start saving money?

When you plan to invest in a financial product, it always pays well to start early. The earlier you start saving and investing, the better. When you start investing early, the appreciation in capital is significant. Even a small amount invested for a long time can give substantial returns due to compounding.

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How a savings plan can help in building your child’s education fund?

Saving plans help in building wealth over time against the investments that you make. Choose the best savings plan to build an education fund for your child. The best saving plan for kids offered by Canara HSBC Oriental Bank of Commerce Life Insurance eases the stress of planning your child's future by providing a lump-sum payout on the investment.

Read More
How Savings Plans by Canara HSBC Oriental Bank of Commerce Life Insurance can help you?

Every person has a unique reason to save and invest. With ULIP savings schemes, the company caters to people seeking wealth creation through capital appreciation. Contrarily, the traditional plans can help you save for important life goals without worrying about the fluctuation in fund value. All major savings plan offers partial withdrawal facility that can help you take care of unplanned contingencies. With savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance, you get adequate flexibility while investing and receiving the savings benefits.

Read More
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