building-an-emergency-corpus-using-insurance-plans

How Insurance Plans Can Support an Emergency Fund?

Learn how insurance plans can support an emergency corpus through payouts, riders and policy benefits, helping you manage sudden financial needs.

Written by : Knowledge Centre Team

2025-08-02

1186 Views

11 minutes read

Exit Pop Up

Live Life More Confidently

Get best insurance from our experts

Name is required Name should be Valid
Mobile Number is required Mobile Number should be Valid
DOB is required DOB should be Valid
Annual Income is required
Please tick to proceed further.

Thank you for your interest in our product. Our financial expert will connect with you shortly to help you choose the best plan.

It’s terrible when we fall into a drastic income cut due to unexpected situations like Covid-19 and do not have an emergency corpus to take care of our contingencies. Many people have had to face hardships on the money front in this pandemic. But as they say, it is never too late. People who have missed out on building an emergency corpus could create one in the months ahead through systematic planning.

An emergency corpus is critical in uncertain times and with an emergency corpus in place, you could live worry free. Many investors get carried away by the promise of higher returns on equity and end up never building an emergency corpus for themselves. An emergency fund can be in form - from sufficient deposits in a savings account, to a unit linked insurance plan that allows pre-withdrawals in times of emergency. Ensure whatever the source be, it is accessible in a day or two to help in any crisis, should you face a sudden dip in earnings from disruptions due to a market shutdown, natural calamity etc. Such emergency corpus can help pay for major expenses like children’s education, an equated monthly installment or even usual household expenses, if needed.

How much savings would you need?

Depending on your income and regular expenses, an emergency fund can be anything between three to six months of your monthly income. If you plan to start an emergency fund now, take account of the amount of money you need for your living expenses, money payable towards school fees, EMIs payable, and other unavoidable expenses. Also, it is advised you review these every few months to monitor and incorporate any increase in expenses. You may even choose to divide your emergency fund into 2 categories, and choose saving instruments accordingly.

  • Long-Term Emergency Funds- These are long term savings plans where you save a large chunk of investments for large-scale emergencies like a sudden medical exigency or a natural disaster. This fund should be invested in plans that offer wealth creation benefits and allow you to earn considerable interests, but may also be liquid to allow emergency withdrawal. For instance, ULIP plans like Promise4Growth Plus are a great tool that lets you invest in avenues depending on your risk appetite, ensuring guaranteed results along with partial withdrawal facilities.
  • Short-Term Emergency Funds- This is the fund you must rush to in cases of smaller emergencies that may arise. These funds should allow immediate accessibility, even if the rates of interest are low. Also, these are the funds that can suffice in case of extreme situations, till you gain access to your long-term emergency funds.

Start with Making the Right Investment

Health and term insurance are a must to ensure a secure financial future for your family. In addition, unit-linked insurance policies (ULIP) that promise to pay returns at the end of the tenure are also considerable options. Apart from financial security, insurance policies are also a smart way to build wealth. While investment options such as equity and mutual funds play an important role in long-term wealth creation, there are several plans that can help fulfill both cover and savings needs.

setting up emergency funds
  1. Unit Linked Insurance Plans: ULIPs combine life insurance with investment, as in the premium you pay is divided into insurance and the investment plan selected by you at the time of purchasing the policy. ULIPs let you choose from equity, debt and hybrid fund options according to your needs. Though the returns from the plan are market-linked, you have an option to switch between funds when required. Also, plans like the Promise4Growth Plus allows you to make partial withdrawal after a certain lock-in period.
  2. Endowment Plans: If you are a risk-averse, you might want to invest in endowment plans to build wealth. Endowment plans are long-term saving plans that come with life cover. The policy allows withdraw either as a lump sum amount or in monthly installments, on maturity. Also in case the insured survives the policy tenure, the lump sum amount from the policy can be used for financial objectives like children’s education, their marriage etc.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

Recent Blogs

Why Life Insurance for Women Is Crucial This International Women’s Day?
07 Mar '26
126 Views
7 minute read
On International Women’s Day 2026, understand why life insurance for women is essential to secure financial independence, protect families, and plan for long-term stability.
Read More
Life Insurance
What is the Principle of Contribution in Insurance?
05 Mar '26
1712 Views
7 minute read
Understand the principle of contribution in life insurance and how it applies to your policy. Explore insights from Canara HSBC Life Insurance to safeguard your financial future.
Read More
Life Insurance
5 Reasons Your Life Insurance Application May Be Rejected
27 Feb '26
2611 Views
7 minute read
Learn the top 5 reasons why a life insurance application may be declined, including medical history, incorrect details, financial risks, and underwriting concerns.
Read More
Life Insurance
Key Features and Benefits of Life Insurance in India
27 Feb '26
1417 Views
13 minute read
Understand the key features and benefits of life insurance in India, including financial protection, tax advantages, savings options, and long-term security.
Read More
Life Insurance
How Life Insurance Protects Families Facing Rare Health Conditions?
27 Feb '26
25 Views
8 minute read
Learn how life insurance helps families facing rare health conditions maintain financial stability through income protection and long-term planning support.
Read More
Life Insurance
Life Insurance Payout Process: How It Works in India?
26 Feb '26
897 Views
5 minute read
Understand how life insurance payouts work in India, including claim settlement process, payout options, timelines, and nominee payment methods.
Read More
Life Insurance
Buying Life Insurance for Someone With a Critical Illness
22 Feb '26
895 Views
7 minute read
Covers eligibility, underwriting considerations, and factors involved when purchasing life insurance for someone with a critical illness.
Read More
Life Insurance
How do I Surrender my Life Insurance Policy?
18 Feb '26
888 Views
6 minute read
Learn how to surrender your life insurance policy, reasons not to, required documents, and whether you can surrender your term plan with Canara HSBC Life Insurance.
Read More
Life Insurance
Where Life Insurance Companies Invest Your Premiums in India?
17 Feb '26
2425 Views
10 minute read
Discover how insurers invest policyholder premiums across bonds, equities and government securities to ensure stability and returns.
Read More
Life Insurance

Life Insurance - Top Selling Plans

We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.

Family Shield: Enhanced Protection

iSelect Smart360 Term Plan
  • 3 Plan options
  • Life cover till 99 years
  • Steady income benefit
  • Block your premium at inception

Start Young, Pay Less, Stay Secured

Young Term Plan
  • Life cover till 99 years
  • Coverage for spouse
  • Block your premium rate
  • Covers 40 critical illness

Fixed Returns, Zero Risks & Worries

iSelect Guaranteed Future Plus
  • 4 Plan options
  • Life cover + Guaranteed benefits
  • Accidental death benefit
  • Premium protection cover