A savings plan is a life insurance investment plan that offers various prospects and is not limited to just saving money. It also helps in investing and multiplying your money efficiently and systematically. The investment will empower an individual to meet the financial needs of their family and fulfill their financial goals. This is because the savings-investment plan comes with numerous features to help individuals fulfill their financial goals.
There are particularly some saving plans that are preferred over others. For example, ULIPs are preferred due to the dual benefit of a life insurance cover and market-linked savings returns they offer. Also, ULIPs have an option of adding specific riders. These riders benefit from enhancing the financial protection of the policyholder and his family in case of any disability, illness, or accidental death.

Five Ways to Choose the Right Guaranteed Savings Plan
The market is full of several saving and investment plans, and every plan has its circumstances corresponding to it. It is essential not to invest in a wrong savings plan without thoroughly researching the fund and plan's assets allocation. One way of collecting information is by doing a proper background check about the features of saving plans. Many people decide to buy a savings plan online as it is a better way to avoid any brokerage or excessive and arbitrary charges. However, it is paramount to indulge in some self-study on the savings plan best suited for you.
To meet any unforeseen financial commitments, people save ample money and build a vast corpus. However, you need a certain plan to think smartly and always look ahead at the big picture. Let us explain what things should be kept in mind while doing so are.
1. Clarity of Financial Goals
Primarily, you have to make a checklist of the financial goals which you wish to achieve in life. It should be a structured goal for every step of your life, such as house buying, marriage expenses, child care, and early retirement. With this checklist, you will have a brief idea of how much money to set aside every month. If you are planning to invest in savings, preparing a checklist is crucial once you start earning.
2. Choice of Investment
Since you have many profitable options to save your money, you can benefit from it. Presently, ULIP is the best saving plan as it offers dual benefits of insurance and investment. Based on your risk profile, the premium amount is invested in equity, debt, or a combination of both of them based on your risk profile. It will thus give you a good return and secure your family financially during an unforeseen event.
3. Automatic Transfers
You have to set your salary account so that the money is automatically transferred to the investment account. Thus, a direct debit will not tempt you to hold back the money, since the transfers are done automatically on a specific date. However, if you have opted for manual transfers, you might skip saving for a few months.
4. Contingency Fund
Life is unpredictable, and thus you should always plan for contingencies or emergencies you might come across when you expect it the least. It is always better to set aside at least some percentage of your monthly salary for a contingency fund. Thus it will help you meet the unfortunate expenses with confidence. For this, you must choose highly liquid investment choices such as bank deposits because there might be a requirement for quick cash.
5. Wise and Planned Expenditure
To start saving regularly, you should cut down all of your unnecessary expenses. Always try avoiding the usage of credit cards as the interest rates on them are relatively high. It is advisable to use cash or your debit card while shopping. This helps you keep track of how much money you're spending, thus instilling a sense of financial discipline.
A good savings plan should also be instrumental in saving tax. According to the 80c of the Indian Income Tax Act, 1961, the premiums of most life insurance savings plans can be deducted from taxable income up to Rs. 1 Lakh. Besides, under section 10D of the Indian Income Tax Act, 1961, the benefits of maturity and death are also subject to tax exemption. Thus, the savings plan is the most preferred tax saving instrument.
With saving plans, people usually get a broader entry age with versatile investment tenure. The determination of the risk appetite of the policyholder is done by the entry age. Thus, a saving plan is planned out based on the risk profile of the policyholder. Since people in their 20s and 30s take higher risks to receive profitable returns, unit-linked insurance plans (ULIPs) will be suitable. Contrarily, the people who are reluctant to take risks are more suited for money back plans, thus keeping their money safe despite low returns.
Additionally, the mid-to-long term investment tenure allows depositing a significant corpus during the period.