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Guaranteed Savings Plan to Secure the Future of your loved ones

dateKnowledge Centre Team dateJanuary 12, 2021 views124 Views
Guaranteed Savings Plan to Secure the Future of your loved ones

Everyone wants to secure their family’s future to make sure that they will not face any financial problems in their absence. In India, one of the best things a person can do for their family is to make their future secure and completely tension-free by investing in savings plans. After the birth of a child, every father focuses on their future education and marriage. The advantages of securing the future by savings plans will be discussed in detail in this article.

A guaranteed savings plan is one of the best plans with great returns to secure the future. Canara HSBC Oriental Bank of Commerce Life Insurance Company provides a new guaranteed savings plan for its users to achieve higher returns at the time of maturity. The features of a guaranteed savings plan are mentioned here; check it out for better understanding:

Guaranteed higher return at the time of maturity: Achieving higher return after paying plan installments is quite a hectic process for the ones who indulge in some random plan without checking all the pros and cons. This guaranteed savings plan provides higher returns to their users than the other plans.

Life cover for the entire term: This unique savings plan provides a life cover for the entire term while you pay the premium for a limited period. These features secure your family’s financial conditions during the absence of the policyholder.

Enhance your family’s protection: This life insurance plan secures your family’s financial status after your death by providing a lump sum amount. If in case of death, the remaining premiums are not required to be paid and your family will get guaranteed benefits payable on maturity.

The flexibility of choosing a payment method: There is full flexibility to pay your selected savings plan’s premium. Many modes of payment like online transactions, offline deposition can be considered. As the development of the technological world is happening at a brilliant rate, so shifting from offline to online payment mode is quite helpful for the users.

High premium booster: You can also use the high premium booster options by paying a higher premium to achieve extra benefits by making higher premium commitments.

Eligibility criteria

Age and other factors are some of the eligibility criteria for securing your money in a guaranteed savings plan. There are three modules of this plan: guaranteed savings option, guaranteed savings with double protection option, and guaranteed savings for premium protection. The age limit varies in all three options. Check out the tables given below to understand better:

Guaranteed savings option:

Parameters Minimum Age Maximum Age
Entry Age O Years 60 Years
Maturity Age 18 Years 75 Years

Guaranteed savings with double protection option:

Parameters Minimum Age Maximum Age
Entry Age 18 Years 55 Years
Maturity Age 28 Years 75 Years

Guaranteed savings with premium protection option:

Parameters Minimum Age Maximum Age
Entry Age 18 Years 55 Years
Maturity Age 28 Years 75 Years

Guaranteed savings option and Guaranteed savings with double protection option

Mostly all the terms and features of the Guaranteed savings option and Guaranteed savings with double protection options are quite similar making them identical in many terms. Check out the features and benefits of these options at the time of maturity and death mishappening.

Maturity benefits: After the successful completion of your term period, a user will get the benefits mentioned below:

  • Guaranteed Sum Assured on Maturity
  • Guaranteed Yearly Addition(s)
  • Guaranteed Loyalty Addition

After the payment of the benefits mentioned above, your term will be terminated and no further benefits will be provided.

Benefits after death:

Death is a mishappening and we always try to secure the user’s family in case of mishappenings like death. All the benefits mentioned below will be awarded to the policyholder’s family.

  • Sum Assured on Death, plus
  • Cumulative Guaranteed Yearly Addition(s) added, as on date of death

If the insured opted for the double protection option then, in case of death by an accident, an additional sum which is equal to ADB Sum Assured will be paid to the family. After all the payments, your term will get terminated and no further benefits will be given to the family.

Guaranteed saving option with premium protection option

A guaranteed saving plan with a premium protection option provides many benefits that are different from the above mentioned ones. This option has more security and higher returns as compared to the other two. Check out the benefits at the time of maturity and death.

Maturity benefits: The benefits a user will get after the successful completion of the term period are given below:

  • Guaranteed Sum Assured on Maturity
  • Guaranteed Yearly Addition(s)
  • Guaranteed Loyalty Addition

After the successful payment of all the benefits to the policyholder, the insurance term will be terminated, and no other benefits will be awarded in any case.

Death benefits: In case of an unfortunate death during the term of your guaranteed saving option with premium protection, the following benefits will be awarded to your family:

  • Sum assured on death - Your family will get a sum assured on death.
  • All future premiums are not required to be paid and the policy shall continue to be in force for the remaining Policy Term
  • On maturity - The guaranteed sum assured will be paid to the family for the policyholder along with guaranteed yearly addition and guaranteed loyalty addition.

After the successful payment of all the benefits, the insurer is not bound to pay any other benefits to the beneficiary.

Other additional benefits

In a guaranteed saving plan with different options, many other benefits like a loan and a high premium booster are also available.

Loan Facility: In case of any urgent need, users can use the loan facility to face urgent needs after the policy acquires surrender value. The minimum loan amount a policyholder can avail is Rs. 20,000 and the maximum amount a user can avail is 80% of the surrender value at the time of acquiring the loan. There will be an applicable loan interest on the loan amount which varies yearly.

High premium booster facility: High premium booster facility is a facility for those who want higher returns at the time of maturity. Paying a higher premium will automatically increase the returns on that particular premium. The table below shows the percentage of return a policyholder will get by using a high premium booster facility.

Annualized Premium High Premium Booster (as % of Basic Sum Assured)
20,000 to 30,000 Nil
30,000 to 40,000 4%
40,000 to 50,000 7%
50,000 to 75,000 8%
75,000 to 1,00,000 10%
Greater than or equal to 1,00,000 11%

The insured can avail the benefits of a high premium booster. Read all the documents of the term plan regarding the high premium booster to collect required information and data for further use in the future.

Why you should opt for a guaranteed savings plan

Policyholders can use the benefits of a guaranteed savings plan to secure their loved one’s future. It also offers other advantages such as higher returns. Many benefits will be available at the time of maturity. In case of mishappening like death then the insurer will provide the benefits to the family.

Securing the future: Saving your valuable money in a reliable savings plan helps you lead a tension free life. Marriage and education fees are the things every head of the house plans years before the time and a guaranteed savings plan will be one of the best options you can choose to plan for these occasions.

The scent of relief in case of any accidental death: Death is not in our control but securing our family’s future before the death is in our hands. The head of the house should always plan the family’s future by acquiring a guaranteed savings plan.

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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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