Written by : Knowledge Centre Team
2025-08-02
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8 minutes read
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What is a Savings Plan? | Canara HSBC Life
The year 2021 had started with much hope and enthusiasm, like any other year. However, everything came to a standstill quickly with the second wave of COVID-19 occurring out of nowhere, followed by the lockdown and an unexpected economic slowdown.
These are the times that actually make you feel proud of the safe investments you made, and which have continued to growth and yield benefits in times like these. If you haven’t already, this is your time to realize the importance of saving plans and make smart investments now!
The best of the savings plan offers much more than just the steady growth of the investment
1. Tax Savings
Tax saving is one of the most important and unique features of these saving plans. The best plans will offer tax saving in all the following situations:
- Investment amount deductible from taxable income under section 80C
- Tax-free maturity value/ death benefit
- Invest any amount without losing the tax-free status of maturity amount
One factor you will need to keep in mind, though, is that your annual investment in the plan should not exceed 10% of the life cover in the plan.
For example, if you want to accumulate Rs. 50 lakhs, the guaranteed saving plan will accept Rs. 50 lakhs as the base life cover and decide your premium. All you need to do is to make sure that the annual premium in any financial year is not more than Rs. 5 lakhs.
Also, you cannot voluntarily invest more than Rs. 5 lakhs in the plan in any financial year. If you do so, the maturity value of your investment will become taxable.
2. Guaranteed Returns
The best saving plans in the market offer guaranteed returns. Meaning, you know the minimum amount you will get upon maturity at the inception of investment. This makes it very easy to plan for important life goals using these plans.
For example, you want to accumulate Rs. 50 lakhs for your child’s higher education in 20 years. You can invest about Rs. 13,000 per month for the next 10 years, to receive Rs. 50 lakhs in 20 years.
Since the returns are guaranteed, all you need to worry about is completing your investments for the next 10 years. Also, since you also have a similar amount of life cover in the plan, your family will receive the money even in case of your premature demise.
Understand the difference between guaranteed returns and assured returns.
3. Wealth Boosters
The guaranteed sum is only the minimum assured return. Wealth boosters, as the name suggests, add to your portfolio value over time. These are regular bonuses which add to your plan as long as you stay invested. Longer-term investments naturally accumulate higher bonuses.
Guaranteed Saving Plan and Promise4Growth Plus from Canara HSBC Life Insurance add bonuses to your investment plan, boosting your overall maturity value. The plan offers two bonuses to all investors:
- Guaranteed yearly additions (annual bonuses)
- Guaranteed loyalty additions (based on policy term, larger bonus for the longer term)
Thus, not only you can be sure to receive the minimum sum at maturity of the plan, chances are you will receive a lot more than the guaranteed sum.
So, as we wanted to accumulate Rs. 50 lakhs in our previous example and we had to invest Rs. 13,000 per month for 10 years. With wealth boosters, your monthly investments will drop to about Rs 5,500 per month.
4. Goal Protection
Goal protection or premium protection is another unique feature of the guaranteed saving plan. This feature means that even if you meet the ultimate fate before completing your investment into the plan, your family will meet the goal.
To understand this unique benefit, consider this example:
In the previous example, we had a goal of funding a child’s higher education with Rs. 50 lakhs in 20 years..
Now, if you opt for goal protection option, the insurer will cover your premium payments as well as the normal life cover. Without this option, in case of your demise in the 5th policy year, your family would receive Rs. 50 lakhs plus any bonuses and the policy will discontinue.
However, with goal protection option, the insurer will deposit the remaining five years’ premium on your behalf, after paying the death claim of Rs. 50 lakhs. The plan continues even after the death claim and the family will receive the maturity value with all the accumulated bonuses at 20 years’ maturity.
5. Investment Flexibility
Investment flexibility allows you to invest in a way most convenient for you. For example, if you are salaried, you would like to invest every month, while business professionals may prefer quarterly or annual mode of investment.
Also, you have multiple goals in life, and if possible, you would like to invest in different goals at different times. Limited pay option of the guaranteed saving plan gives you this flexibility of investing in the plan for a limited period.
This is also useful since the plan will accept only a level premium, and as your income grows, you will be better off investing a larger sum every month.
With these many features, selecting the best savings plan should not be a difficult choice. So, start investing and stop worrying about the turbulent times.
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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.
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Savings and Investment Plans from Canara HSBC Life Insurance
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.
Fixed Returns, Zero Risks & Worries
iSelect Guaranteed Future Plus
- 4 Plan Options
- Life cover + Guaranteed benefits
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Save, Dream, Plan. Live Peacefully
iSelect Guaranteed Future Plan
- 4 plan options
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