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What Are Guaranteed Saving Plans, And How Does It Work?

dateKnowledge Centre Team dateDecember 06, 2020 views157 Views
What Are Guaranteed Saving Plans, And How Does It Work?

Guaranteed Savings Plan is a life insurance cum savings plan that allows you to secure your life goals with the security of a life cover and guaranteed returns. Buying the best savings plan is an assurance that even if something goes wrong, your family can continue living their financial life the way they were when you were around. Not only that, savings plan also help you in planning for other life goals such as your child’s higher education, retirement planning, or buying your dream house during retirement. Guaranteed Savings Plan by Canara HSBC Oriental Bank of Commerce Life Insurance offers lump sum benefit at maturity that can take care of your post-retirement expenses.

Let us understand about this savings plan in detail:

How Guaranteed Savings Plan Work?

The savings plan offers a lump sum benefit to the policyholder at maturity. You can choose to pay the premium for limited years only or you can choose the premium payment frequency as per your financial circumstances.

There are three types of policies available:

a) Guaranteed saving option

b) Guaranteed Saving with double protection option

c) Guaranteed saving with premium protection option

When the policy matures, you will get:

a) Guaranteed Sum Assured

b) Guaranteed Yearly Additions

c) Guaranteed Loyalty Additions

Five Benefits of Guaranteed Saving Plans

1. Benefit on the maturity amount is maintained through Guaranteed Sum Assured

2. Bank provides complete security on the amount with Premium Protection choice

3. Upgraded Protection with Double Protection choice is handed out to the customers with Double Sum Assured on unforeseen circumstances

4. Credit Facility to meet impromptu monetary necessities

5. Tax benefits are provided to customers under Section 80C and Section 10 (10D), of Income Tax Act, 1961



Three Reasons to Invest in Guaranteed Savings Plan

Everyone has a distinct financial goal, a varied life experience, and a different perspective on risk and investments. Guaranteed saving plans may be the perfect savings plan for you if you are risk averse and want a steady, predictable, and long-term income from your assets.

Here are 3 reasons you should buy a Guaranteed Savings Plan:

1. Builds a Safety Net

If the policyholder passes away during the term of the policy, the death benefit will be paid to the nominee or beneficiaries. They will receive sum assured on death along with cumulative guaranteed yearly additions. If opted for Guaranteed Savings Plan with Double Protection Option and the reason of death of the policyholder is accident, then an additional amount equal to Accidental Death Benefit Sum Assured will be paid to the nominee. The amount received can be used for a variety of purposes. In case of the policyholder’s early or sudden demise, this savings plan will act as a financial safety net for the family.

2. Wealth Creation and Legacy Building

Build a legacy for your children and boost your wealth creation strategy with the best savings plan. Due to the effect of compounding, you can expect the invested amount to grow significantly with time. The wealth, thus created can be used to take care of the regular expenses of your family when you are not around. The maturity benefits can be also used for meeting your retirement goals. Any surplus can be passed on to the next generation of your family members.

3. Life Cover

As these are life insurance cum saving plans, you get a life cover. The maturity benefits will help your family in case of your demise. It caters to your financial needs when you retire. With a Guaranteed Savings Plan, you are also eligible for tax deductions under Section 80C of the Income Tax Act.

Guaranteed Saving Plans helps in shaping the future of the person, it gives financial independence. It is widely chosen by people to make them and family financially secure. It provides the best saving plan like retirement plan, children education plan, etc.

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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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