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5 Features of Savings Plans by Canara HSBC Oriental Bank of Commerce Life Insurance

dateKnowledge Centre Team dateSeptember 03, 2021 views214 Views
Savings Plan | Buy the Best Savings Plan in India | GuaranteedIncome4Life

India is a land of diversified culture and traditions. However, no matter from which part of the country you are, there is a common thread in our DNA. We all are programmed to save money for the future. Though we are not given financial education in school, every child, at some level, knows the importance of planting a tree today and enjoying the benefits in the future. The saving options may have changed over generations, but at the core, you need a savings option that secures the future of your loved ones.

What Are Savings Plans?

You save to achieve your short and long-term goals. Savings plans are life insurance plans that give you an option to create a huge corpus over time to meet your future needs. The savings plans are created to help you get into the savings habit.

These plans are designed to reward you for your commitment to saving regularly and for a long time. In addition, they also offer insurance coverage which gives you security in life.

Three Popular Savings Plans by Canara HSBC Oriental Bank of Commerce Life Insurance

The top three savings plans offered by Canara HSBC Oriental Bank of Commerce Life Insurance are:

Invest 4G ULIP Plan Guaranteed Savings Plan Guaranteed Income4Life
A Unit-Linked Insurance Plan to help your money work harder. A savings plan that offers you guaranteed benefits on maturity. The plan offers you guaranteed benefits and regular income.
Comes with equity and debt portfolio investment options. You can choose your investment and growth horizon. Is best for generating a reliable regular income post-retirement.
You can choose the type of funds you want to invest in, depending on your risk profile. Returns are not dependent on the capital markets. You can receive the regular income for 10 years or lifelong depending on the investment options you picked.

Five Features of Savings Plan by Canara HSBC Oriental Bank of Commerce Life Insurance

These three savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance, have a range of features you can use. These features allow you the necessary investment flexibility you need to meet your financial goals.

Here are five hidden features of the above three saving plans that you should know:

1. Goal Protection

Your goal is to protect your family financially under all circumstances. The goal of savings plans is the protection of your goals. If you pay your premiums on time, you receive a lump sum value on maturity that helps you complete your goals.

But, in case of your early demise, the investment in the goal may remain incomplete, affecting your family’s chance of meeting the goal. However, these three saving plans can help your family meet these goals even after an incomplete investment.

Here’s how:

Assuming you started investing Rs. 2 lakh a year in your child’s higher education goal. You will invest for the next 15 years and your goal is to build a corpus of Rs. 45 lakhs at the end of this tenure. However, unfortunately, you pass away in the fifth policy year, after investing only Rs. 5 lakhs in the plan.

The investment is far from sufficient to grow to Rs. 45 lakhs in the next 10 years. But, if you opted for a goal protection option within the plan, upon your death, the plan would pay the life cover sum assured to your family, i.e., they will receive Rs. 20 lakhs immediately.

Also, the plan will invest all the remaining premiums on your behalf, until normal maturity. Thus, giving your family the intended maturity value.

2. Tax-Free Maturity Valu

One important aspect to evaluate while doing any investing is taxation. If the income you earn from your investment is taxable, the taxes will eat a part of your returns on maturity. The savings plan is a long term plan, and you receive a decent size corpus on maturity.

In these savings plans, you don’t have to pay any tax on the maturity amount. You get to use the whole amount received for your goals.

The payment received from a life insurance plan is exempt from tax under section 10(10D) if the investments follow a simple rule:

“Annual premium investment in any policy year does not exceed 10% of the life cover sum assured in the policy”

So far as your investments into the saving plans follow this rule, your maturity value remains tax-free.

3. Limited Investment Period

With age, your responsibilities and so your expenses increase. To meet the multiple responsibilities, you would want to continue investing in the new goal every few years. The limited investment period option allows you to free up your investment from one goal and focus on another after a short period of investment.

For example, you can choose to invest for only five years towards your goal of purchasing a house. After that, you will redirect your savings to other goals, while your home buying corpus continues to grow.

The cost of your child's education will increase, and there will be other mandatory expenses that are unavoidable. One of the best features of Invest4G, Guaranteed Saving Plan, and Guaranteed Income 4 Life is that these plans let you choose your policy term.

So, you have the flexibility to decide for how many years you want to pay your premiums and will not be tied up until maturity.

4. Lifetime Plan

You can use any of these plans for lifetime coverage and even plan to leave a legacy for your family after your natural demise. The Invest 4G and Guaranteed Income4Life savings plans have the option for coverage till the age of 99. Here’s how lifetime coverage will work for you in the two plans:

a. While the ULIP plan can continue to grow your invested corpus, you can:

  • Stop paying the premium once there is an adequate corpus
  • Start withdrawing systematically to create a post-retirement pension
  • Continue investing in the plan to build a large corpus for family legacy to the next generation

b. Guaranteed Income4Life plan continues to provide regular income to you until your natural demise. If you held the plan jointly with your spouse, your spouse would continue to receive the income after your death.

5. Loan Against Policy

You invest in savings plans for your long-term goals, mostly. However, you may require funds to meet your short-term needs. These saving plans acquire cash value which increases over time. While you will receive the maturity value at the time of maturity, what can you do if you need the money a few years before that?

For such situations, you can borrow money at a low rate of interest against the policy and fulfil your need. The policy will continue in the meanwhile, and you can either repay the entire loan before maturity or the amount is deducted from the maturity value with interest.

Thus, the savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance can help you look after multiple financial needs. All you need to do is to know your savings plan well and use the right features.

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Frequently Asked Questions

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 you invest in this savings plan. If capital protection is your aim, then traditional insurance plans such as Guaranteed Money Saving Plan should be suitable for you.

Who should invest in a Savings Plan?

If you are looking for a guaranteed income plan, then saving plans should be on your list of investments that you are planning to make. 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. Saving plans are also ideal for people who are risk-averse and want to accumulate funds through relatively safer mediums. These saving plans inculcate financial discipline in policyholders which make them crucial for every portfolio.

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. Choose an income plan based on your financial circumstances to stay afloat.

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What is the difference between saving and investing?

Saving is the money that you keep aside for emergencies or for buying any big-ticket item. Investing means growing or multiplying the wealth that you have by buying savings plan, or any other assets. Buying a savings plan will help you in achieving your investment goals such as retirement, your child’s higher education or marriage, or for buying a new house.

Which savings plan is best 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. Also, Guaranteed Income4Life is also another savings plan that you can consider for building your retirement corpus as it acts as a guaranteed income plan that will provide you maturity benefits to manage your post-retirement expenses.

Which savings plan is best for long-term goals?

Smart Goals Plan is a savings 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. Canara HSBC Oriental Bank of Commerce Life Insurance offers a wide variety of saving plans that you can invest in as per your risk appetite and investment goal.

Which savings plan is suitable 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. Monthly Income Advantage Plans are also a good option if you are planning to invest in a savings plan for your girl child.

Where should I invest my money?

You should spread your investments across financial instruments. However, having the best savings cum guaranteed income plan in your portfolio is extremely important. Savings plan ensures financial stability and also helps in fulfilling short, medium and long-term monetary goals.

What is a monthly income advantage plan?

A monthly income advantage plan ensures that you lead a stress-free life with your loved ones as it provides a life cover along with giving you guaranteed monthly income. In short, it is a life insurance and income plan that will financially secure commitments made to your loved ones. Canara HSBC Oriental Bank of Commerce Life Insurance Guaranteed Income Advantage Plan is a monthly income advantage plan that provides life cover for the entire term while you pay premium only for a limited period.

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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 in a savings plan. Invest in an income plan as early as possible to build a significant corpus that will later help you in life. Ensure that you buy the best saving plan in India that can be aligned with your investment goals.

Should you use a savings plan for retirement planning?

Yes. Retirement planning is one of the most important financial decisions of our lives. The best saving plan offers 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. Buy a monthly income advantage plan that will generate a steady source of income for you to take care of both long-term and short-term financial goals.

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 an income plan, it always pays well to start early. The earlier you start investing in a savings plan, the better. When you start investing early, the appreciation in capital is significant. Even a small amount invested in the best saving scheme for a long time can give substantial returns due to compounding. Buy the best savings plan as soon as you start earning to achieve all your milestones on time.

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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. Buy 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. Consider investing in a monthly income advantage plan to assist you in fulfilling your financial goals.

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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, which makes them a good investment choice for investors looking for income plans.

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