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Buying an affordable savings plan with good cover

dateKnowledge Centre Team dateJanuary 18, 2021 views245 Views
Buying an affordable savings plan with good cover

Have you been thinking about saving and securing your future, but are confused about what to do? Most millenials and even those who've been earning for quite some time now face difficulties in choosing an affordable investment option to secure their financial goals. Apart from achieving milestones, your investments and savings should save your family and you from any financial troubles in a grievous emergency. Thankfully, there's a solution that provides you with all this and more.

Understanding the Savings Plan

A Savings plan comes under the class of life insurance plans, and it helps you save periodically, without worrying about your continual expenses. For those who find it hard to budget and ration their expenditures, this is a good option because a guaranteed savings plan ensures steady returns through its term.

Savings plans not only give you regular returns on your investment but also help set money aside for undesired and unexpected future events. When it's you or your loved ones on the line, having a guaranteed savings plan on your side can mean the world. Imagine - just a little bit of system when it comes to your savings, and voila! You can create a large total sum for future requirements.

Different schemes are built, keeping in mind the varying expectations, goals, and budgets of people.

Buying an affordable savings plan with good cover

Choosing a savings plan can seem intimidating for many reasons. One may not have enough financial knowledge to make a sound decision independently, one may not know of all the options available, or one may need some guidance.

Before choosing an affordable savings plan, you must analyse certain factors and choose based on those factors:-

  • Needs - It is a good habit to make a checklist of all your financial goals and needs for now, and the future. Use the particular savings plan calculating feature online to determine the actual value of your savings plan investments in the future. You can also calculate the actual value of your financial goals, keeping inflation in mind. Doing so will help you analyse the deficit between your goals and what the investment plans can offer. To calculate via the calculator, you'll need to know the down-payment you'll initially make, the monthly contribution to your plan, the average annual interest rate, the entire tenure of your chosen investment and other factors like inflation.
  • Life Stage - Understanding what life stage you are at, and what life stage you'll be when the tenure ends - both are equally important. Your current life stage determines your affordability and current financial goals, and your later life stage may determine your financial needs. Planning for the different stages of your life helps you achieve your dreams and keep yourself and your loved ones financially secure.
  • Taking risks - You should keep in mind the risk you are willing to take, and the kind of rewards you are expecting. There should be a balance between the risks and the rewards of a guaranteed savings plan. The Unit-Linked Insurance Plan is a popular choice among those looking for savings, investment opportunities and insurance under one savings plan. A ULIP gives great returns and comes with a good cover. However, whether you choose a ULIP or some other plan, you must analyse your risk appetite. Knowing this can help you figure out where to invest and how.
  • Amount of the cover - An affordable savings plan with a good cover is the best option. Deciding on a life cover requires you to understand your liabilities. You must take into account the number of dependents, your current assets, your future income, your current income, and any ongoing life cover. It is recommended to have a life cover that's at least 10 times your annual income. Doing so shall help you stay on the safe side of your investment.

  • Liquidity - Liquidity is a crucial aspect of any investment or savings opportunity. Even with a guaranteed savings plan, you must consider the liquidity of the plan and whether it meets your expectations and requirements. Check the ceiling for withdrawal from the plan's commencement date, whether you plan on making partial withdrawals, how the liquid is the plan for emergencies and so on. In the case of a dire situation, liquidity could mean the difference between being safe and unsafe. Ensure that whichever savings plan you choose has adequate liquidity.
  • Consider all options - There are a bunch of savings and investment options out there. The key to making a sound financial decision is knowing your options and what works best for you. Diversity in your savings or investment product can help save you from a fluctuating environment and reduce the risk associated with that investment product.
  • Performance - Your work doesn't stop after picking a savings plan. Please keep coming back to your portfolio, and review it regularly. Needs may change with life stages, or unprecedented requirements may arise. Keep reviewing and making changes whenever necessary to stay updated and on top of things. Instead, you can even maximise the benefits of a guaranteed savings plan by making the right changes at the right time.
  • Ask questions - Grasping financial information can be tricky for many people. Don't be afraid to keep asking questions till you know everything you wish to know, and comprehend it fully. Make as many queries as required before choosing a plan, and make updated queries when you review your portfolio. Ensure that you ask about the terms and conditions associated with your savings plan. Only make a down-payment when you're a 100 % sure that this is what you want.

  • Terms duration: Choosing a longer term for your plan may mean that your invested amount grows via compounding. You might avail greater returns and benefits. Understanding the term duration is another aspect of choosing a savings plan.

  • Servicing- Choosing a savings plan is only the first step towards a safe and secure financial life. What happens when you need help, or you need to avail services? Pick a company that offers prompt servicing, and has several touchpoints and branches to approach. If they offer services through digital platforms as well, that should be an advantage.

Benefits of a guaranteed savings plan with a good cover

"A penny saved is a penny earned", and a savings plan with a good cover is undoubtedly a step towards a worry-free and hassle-free future. Indians are known to maintain a reasonable savings rate, with more and more households becoming aware of the benefits of a guaranteed savings plan.

Some of these benefits include:-

  • Coverage and Payouts - A savings plan offers you the opportunity to cover your family if the need arises financially. Apart from receiving steady payouts as part of a savings plan, the coverage offered is also a much-needed benefit.
  • Works for everybody - Even if you aren't a wiz at managing your finances, or diversifying your investments, a guaranteed savings plan saves you from doing the work yourself. You can rely on a good savings plan to secure your investment opportunities.
  • Discipline and order - Saving is not an easy task. It requires discipline, commitment and future planning. Not only do you have to be mindful of your expenses, but also considerate of your future needs. Having a savings plan means some money is set-aside regularly. It brings discipline and order in your life when it comes to savings.
  • Tax benefits - Saving plans come with tax benefits, just like other insurance plans.
  • An abundance of choices - There is an abundance of choices in India when it comes to saving plans. You can pick the one that is tailored for your requirements.
  • Helps achieve goals - Saving plans can have a specific target or purpose. They could be for a specific goal in your life or a big event, such as going to a prestigious college.
  • Flexible options - Banks and companies understand that we, as individuals, vary on many accounts. Our aspirations, requirements, capabilities and shortcomings are different. Our dreams and goals may vary from each other, so may our fears and risk-appetites. That's why saving plans often come with a wide array of features that are often customisable.

A good savings plan combines the discipline of savings and the safety of insurance. India has a wide variety of options to choose from, with different prices and rates. Despite wanting to choose the cheapest one, make sure to rethink your choice.

Sometimes the cheapest one might not be the best option. That's why you should pick an affordable savings plan, with diversity, and adequate liquidity. Making the right investment and choosing the right savings plan can give a head start to a safe life for you, with ample opportunities fulfilling your financial goals. Whether it be buying a house, saving for your marriage or your next car, no significant expenditure is successful without proper planning.

Even when choosing a savings plan, do some market research and consult the right people and say hello to a financially stable life!

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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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