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Saving vs Investment: which is better?

dateKnowledge Centre Team dateJanuary 28, 2021 views232 Views
Saving vs Investment: which is better?

Saving and investment are concepts that appear to be highly confusing in the eyes of many. You may think both saving and investment means the same. However, this is exactly where you go wrong. Both saving and investment are based on different ideologies and serve different purposes. A careful perusal is what’s needed in the first place before you decide on choosing the best saving policy. And at Canara HSBC Oriental Bank of Commerce Life Insurance, you can choose the best saving plans for yourself to save or invest.

Know the difference

The fundamental aspect of saving and investing money is to understand what comes first.

Saving money is the act of parking the cash in safe and liquid accounts or securities. Whereas, investing money is the act of using it to buy a productive asset-backed by some safety. Stocks, bonds, or even real estate makes for effective investment tools.

Now that their difference is understandable, the next major question would be when to save or invest and how much to save or invest. Saving comes before investment as a golden rule. Only when you have enough money saved to cater to your needs, you should think of investing it.

Best saving policy and plans

To save for a secure and safe future is a habit that is always encouraged. You might feel confused as you come across different policies and plans that provide you with the best way to save your wealth. However, at Canara HSBC Oriental Bank of Commerce Life Insurance, you would be assured that your savings are put into the best policies and plans that allow you to make disciplined savings.

It has the best savings and investment plans and policies be it traditional investment plans or the new-age and current policies.

If you are someone who goes by the traditional investment plans, Canara HSBC Oriental Bank of Commerce Life Insurance has you covered. These plans are conventional and different from the unit-linked insurance plans. There is no role of capital markets; hence, no market linkage. The insurance laws govern the working of such policies.

These plans require money to be locked-in for almost 10-20 years, and there is no way to withdraw the amount before the term gets over.

However, if you are looking for comparatively modern plans in their approach, then Canara HSBC Oriental Bank of Commerce Life Insurance provides its customers with various saving plans and policies that suit the distinct needs of each customer. Saving plans resemble life insurance products and yield steady returns throughout the term.

The possibilities that they provide for you to save your money are immense.

Canara HSBC Oriental Bank of Commerce Life Insurance helps you grow your money and accomplish your financial goals through a systematic investment procedure. The returns are payable to the beneficiaries depending upon their needs and the preferred plan.

Nonetheless, saving plans also aim to offer their customers tax benefits, terminal illness benefits, and also cover death benefits. These life insurance plans are futuristic and promise nothing but financial security for your family.

However, before choosing the best saving policy, remember to be sure of the following factors that ought to determine your decision to save in a particular plan/policy:

  • Risk parameter
  • Investment tenure
  • Final objectives
  • Flexibility
  • Specific plan attributes
  • Minimum costs/charges

Why choose Canara HSBC Oriental Bank of Commerce Life Insurance for the best Saving Policy?

  • It is the trusted choice of India’s leading public-sector banks and individuals seeking to secure their families’ future.
  • It caters to the needs of those who place their financial reliance on such policies. It supports the new age necessities of people.
  • It provides all-inclusive life insurance policies to initiate a smooth premium payments process as well as claiming process.
  • With years of experience and expertise, Canara HSBC Oriental Bank of Commerce Life Insurance has a huge family of happy and satisfied customers worldwide.

The best saving policy will aid you in achieving the following goals:

  • Standard and regular savings
  • Assured returns
  • Tax benefits
  • Incentives in the form of bonus
  • Life covers that provide you with an additional level of security
  • Makes it easy to avail secured loans against the policy

Types of Savings Plans and Investment Plans offered by Canara HSBC Oriental Bank of Commerce Life Insurance

1. Endowment plans

  • These kinds of plans blend both life insurance and savings, thereby allowing the policyholders some regular savings.
  • These plans are the most traditional ones available in the country.
  • The key highlight of such plans is that if the policyholder lives through the term period of the policy, he would be eligible to get paid a lump-sum amount at maturity. On the other hand, if the policyholder dies before the policy term gets over, his beneficiaries must be paid the entire sum of money assured by the policy.
  • If you want to invest in an endowment savings plan that makes it easier for you to achieve your goals by saving regularly and gives you assured returns unbothered by the market fluctuations, then the Guaranteed Savings Plan offered by Canara HSBC Oriental Bank of Commerce Life Insurance would be the appropriate choice.
  • Another such plan that focuses on wealth creation and has specifically been designed to support your needs through each stage of life is the Smart Lifelong Plan.

2. Money-back plans

  • These plans are closely similar to the endowment plans such that these are also a mix of insurance and savings.
  • However, the basic difference is in the manner of paying the benefit. These plans do not pay a lump-sum amount at maturity. Instead, they pay the assured sum at periodic intervals. If the policyholder survives the policy term, he stands eligible to be paid the balance sum. However, if he dies before the policy term ends, his beneficiaries get paid the complete sum assured irrespective of previous payouts.
  • This policy’s basis is to provide flexibility and freedom to the policyholder to use his savings if he wishes to.
  • What makes it the best savings plan is that it provides liquidity, life insurance cover, and security unfettered by market fluctuations.

3. Unit-linked Insurance plans

  • Under these plans, you can make any modifications in the entire sum assured, anytime during the policy term.
  • These plans provide an alternative to the policyholder to choose between linear, increasing, or decreasing sum assured. Similarly, premium payment can also be modified, and the policyholder again has a choice to choose if they wish to pay monthly, quarterly, half-yearly, or annually.
  • ULIPs are designed to cater to the distinct financial objectives of each policyholder. There are three types of savings plans under this category; single/regular premium plans, life stage-based/non-life stage-based, guarantee/non-guaranteed plans.
  • The most credible saving policy plan is the Canara HSBC Oriental Bank of Commerce Life Insurance Invest 4G Plan. It allows the policyholder an opportunity to choose for the best possible plan and save for the future while maximizing his savings by adding back to it in the form of Loyalty Additions and Wealth Boosters.
  • Titanium Plus Plan is a similar one that promotes protection and investment, thereby boosting your savings. It is equally flexible and allows modifications too.

Your rationale behind saving and investing might be different. Both the new ULIP savings schemes and the traditional plans offer distinct benefits in their capacity. ULIPs focus on wealth creation by encouraging capital markets’ involvement while traditional policies go unaffected by the same and make for a safer alternative. However, to each on its own. What is necessary here is to know the correct balance between saving and investing. With the best saving policies from Canara HSBC Oriental Bank of Commerce Life Insurance, you get to choose the one that matches your aspirations and expectations.

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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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