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Best Features Of A Guaranteed Savings Plan

dateKnowledge Centre Team dateJanuary 13, 2021 views56 Views
Best Features Of A Guaranteed Savings Plan

Saving is the most necessary virtue that we are taught since childhood. We start saving our pocket money in a piggy bank to save our salary in the bank in the hope of a better and secure future for our family. It is one of the most essential practices that is required for a quality life. You never know when an unexpected event can occur. However, if you are confused about where to save, how much to save, and when to save. Then let me tell you, you have landed in the right place.

Although being financially secure is not an easy job in today's world; however, with proper planning and careful investment, we can ensure a financially stable environment for ourselves and our family. There are various saving plans and life insurance available that can help you fulfil your dreams and ensure a safe and secure future for your family.

Guaranteed Savings Plan is one such way that can help you to establish complete security.

But first, we need to understand what a Guaranteed savings plan is.

What is a Guaranteed Savings Plan?

A Guaranteed Savings Plan is a Non-Linked and Non-Participating Insurance Plan that helps to provide you life security by offering a lump sum at maturity along with loyalty additions on cumulative premiums. It helps to boost your corpus so that you can achieve your goals and at the same time provides a safe future for your family.

Specific priorities in the future need to be secured beforehand. For example, you need to save right now to provide higher education and a better future for your child. It would help if you had savings for providing a beautiful marriage to your child. Thus, every need calls for savings, and therefore it is vital to save regularly to have a tension-free future. In a guaranteed savings plan, you need to save a small part of your income for some time, and then you can get a safe future. You will get various benefits like income tax benefits, death benefits, maturity benefits, and many more. However, the best part is you do not need to compromise with your present needs.

A Guaranteed Savings Plan helps in long term savings without compromising with your present needs. Ranging from saving capital for your child's higher education to their marriage this plan ensures that no goal is left unsecured. There are various multiple policy terms available, and you are free to the term as per your preference. It also has a loan facility (with specific terms and conditions) thus, providing you security during an emergency. You need to pay the premium for a particular time, and then you can enjoy life cover for the entire term.

With Canara HSBC Oriental Bank of Commerce Life Insurance, there are three types of Guaranteed Saving Plan available:

  • Guaranteed Savings Option
  • Guaranteed Savings Option With Double Protection Option
  • Guaranteed Savings Option With Premium Protection Option

Each of these plans has its features and significance. You can choose the plan that goes best with your income and requirements.

Features of Guaranteed Savings Plan

The key features of the Guaranteed Savings Plan are as follows:

  • You will get life cover for the entire term while the premiums are paid for a particular period.
  • You are free to choose the payment term according to your requirements and capability.
  • The Guaranteed regular additions depend upon your premium since it has a High Premium Booster facility. This means the higher the premium, the higher the Guaranteed regular additions. Thus, providing complete security.
  • You will get guaranteed returns no matter what the market conditions.
  • You will get Regular guaranteed additions.
  • You will get the maturity benefit provided all the premiums are paid.
  • You will get this maturity benefit only if the policy is in force till the maturity date.
  • The maturity benefit will be given on the date of maturity of the policy.
  • After the maturity benefit payment, your policy will be terminated, and no further benefits will be provided.
  • There are no medical tests required.
  • You will also get death benefits.
  • The maturity benefits include - a total of all premiums you have paid, guaranteed regular addition to the premium, and the maturity benefit.
  • You will get multiple policy term options and can choose according to your preferences and requirements.
  • You will get Income Tax Benefits - According to section 6 C and section D, life insurance policy, and maturity proceeds, are excluded from taxes.
  • Age criteria

For Guaranteed Savings Option

Minimum Maximum
Entry age (Life assured) 0 years 60 years
Maturity age 18 years 75 years

For Guaranteed Savings With Double Protection Option and Guaranteed Savings With Premium Protection Option

Minimum Maximum
Entry age (Life Assured) 18 years 55 years
Maturity age 28 years 75 years

Benefits of Guaranteed Savings Plan

Guaranteed Savings Plans can help you establish a promising and decent future for you and your family without compromising your present needs. You are just required to save a certain reasonable amount of your salary for some years and then get guaranteed returns. Even though there are various saving plans available, however, the guaranteed saving plan is quite flexible and beneficial as compared to others.

For Guaranteed Savings Option and Guaranteed Savings Option With Double Protection Option

Maturity Benefits

You will be getting Guaranteed Sum Assured on Maturity, Guaranteed yearly additions, and Guaranteed Loyalty Additions in maturity benefits. These payments are made based on the plan’s maturity, provided that all the premiums are paid regularly. And after this date, the policy will be terminated, and no further benefits will be payable.

Death benefits

In an unfortunate event of the death of the life assured, provided the policy is still in force and not terminated, the death benefits will be paid to the nominee. These benefits are - some guaranteed on death along with cumulative guaranteed yearly additions till the date of death. And after these payments, the policy will stand terminated, and no further benefits will be payable.

Loan facility

In case of any urgent situation, you can also avail this policy’s loan facility. The minimum loan that you can borrow is Rs 20000 and the maximum is 80% of the overall surrender value at the time of taking the loan. However, this loan facility is available only for those people whose policy is still in force.

High Premium Booster

According to the premium deposited annually, there will be an increase in high premium booster. This increase depends on the amount you will deposit annually.

Tax Benefits

According to section 80C, premiums paid under a life insurance policy are released from taxes, and according to section 10D, maturity proceeds are also exempted from taxes.

For Guaranteed Savings Option With Premium Protection Option

Thus, if you are looking for a scheme that can help you to save regularly and at the same time provide you with additional benefits, then this is a perfect plan for you. You need to save a part of your salary and enjoy various additions to it on maturity. The plan is also quite flexible, and you have the facility of loan too with this plan. Therefore, it is a perfect solution for all your future needs and urgent requirements without compromising your present wishes.

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Frequently Asked Questions (FAQs) for Term Insurance

This being a term plan doesn't offer any payout after maturity or expiration date.

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 70 years of age.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, a term plan pays a part of the sum insured to treat your disease.

Term insurance riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term policy remains active until the expiration date.
  • Income Rider: The rider ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while buying Term Insurance?

  1. 1. Amount of premium you have to pay based on your age, habits, education, and monthly income
  2. 2. The total number of benefits covered in the term plan. Do they include benefits that you care about the most?
  3. 3. How to save money on tax if you pay for the term plan?
  4. 4. Do they offer regular income options?
  5. 5. Can you change the coverage and premium in the future?
  6. 6. Does the claim consider valid if death occurs outside India?
  7. 7. Which kind of death is not covered by insurance?
  8. 8. Can NRIs take term insurance? If yes, what are the conditions?
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