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Top 7 Features of a Savings Plan For Women

dateKnowledge Centre Team dateDecember 08, 2020 views209 Views
Top 7 Features of a Savings Plan For Women

Indian women always have been the ones who quietly kept putting aside small amounts for the family’s future needs. They continue to do so even when without a direct income. More often this small saving is as a kitty for emergencies or the family’s needs but rarely for herself.

Men have been the primary earners and investors, traditionally, but women are taking up the baton fast. That means the investment options have also evolved to cater to the needs of this new age investor.

If you are also looking for investment options to safely park your savings and enjoy long-term growth, here’s a two-step process to help you:

  • Understand the reasons for investments (define investment objectives)
  • List the features you need in the ideal investment option

Reasons for Investment or Types of Financial Goals

1. Financial Independence

Financial independence is important for any adult, and so it is for women as well. It allows you to contribute to the welfare of your family as well as to the society directly. With your savings and wealth, you can implement your ideas and lead your life more independently.

You may have certain goals in life, for example, buying a house or sending your child to Ivy League colleges or career-building hobby. Your investments will also enable you to achieve more financial goals for your child, family and, more importantly, for yourself.

2. Retirement Fund

Retirement savings are important for everyone. As this is one stage which you cannot avoid in life. Having enough wealth to take care of your expenses in this stage is crucial for you, more so if you are a woman.

Women tend to live longer than men so they have to ensure that they have enough to take care of themselves till the end.

3. Learn About Investment & Insurance

When you manage your money yourself, you gain valuable experience with the financial market and investment options. This experience will help you manage your money and your family’s wealth better in future.

Such knowledge is extremely useful in case of emergencies when you suddenly become the primary member of the family. For example, in the case of sudden hospitalization, accident or death of the spouse.

Your investments too should help you take care of such situations financially.

So with all these factors, you need specific saving plans. Following are the key features you will need in a good savings plan for yourself:

4. Easy to Manage Online

The current environment has limited our stepping out and hence the saving plan should be such that one should be able to manage it online without having travel anywhere. These days most investments can also be managed through apps.

5. Small Monthly Outlays

Taking huge investments are good but with uncertain times it is prudent to plan such that it should give you the flexibility of managing it through small outlays without causing major strain on your monthly home budgets. A 20-30% is an ideal savings outlay per month.

6. Automate the Investment

Many of us have acquired the habit of savings through the way our families bought us up. But sometimes we lack the time and end up missing the instalments.

Savings should never be out of what is left as balance after allocation of all monthly expenses. But it should be along with all other allocations and only then can you develop a serious attitude towards it.

If your savings plan allows for auto-debit, you can set up a date and your investment will continue whether you remember or not.

7. Safety of Returns

One always needs a Savings plan that will ensure that the principal doesn’t get eroded through the years. Unless you are comfortable with aggressive market-linked investments, you need such investment where your money can stay safe.

Safe investments will let you focus on your profession and family, while your money grows steadily.

8. Goal Protection Option

You already have plenty of financial goals, some of which are very important for your family. If you are saving to meet these goals, wouldn’t it be great if your savings plan can offer to protect the goal from any mishaps?

Few safe investment plans such as Guaranteed Savings Plan from Canara HSBC OBC Life offer goal protection option. This plan offers to cover for your goal in the case of your early demise.

Upon the death of the investor, the investment part of the plan continues as if you are still alive and investing in it.

At maturity, your family will receive the sum you intended for them in the beginning. Thus, not only safeguarding your invested money but also the ultimate objective of your investment.

9. Provides a Life Cover

Even if you have put aside your career and now managing your household full time, your contribution to the family can be quantified. In your absence the family will have to bank on the alternative services which will cost them, affecting their wealth.

Thus, if your savings plan can provide your family with a lump sum in your absence, you will also keep them financially safe.

Women, often are covered under Mediclaim floater policies but lack adequate cover for critical illnesses. One should look for such contingencies through the Savings Plan. The guaranteed savings plan will provide a lump sum to your family immediately upon your death.

10. Tax Benefits

The ideal savings plans must also make for good tax-saving instruments. The guaranteed savings plan from Canara HSBC OBC Life is a life insurance plan. Meaning all the investments in the plan will help you save tax. The invested money is tax-deductible up to Rs. 1.5 lakhs under section 80c of the Indian Income Tax Act, 1961.

Maturity and death benefits of the savings plan are also tax-exempt under section 10(10D). Thus, once you start investing in this plan you can set aside your worries about tax liabilities from this investment.

The market is flooded with several saving investment plans, and every plan has its risks associated with it. With the varying risk-return profile of all investment options, putting your savings in ad hoc investment is not a good idea.

Select an investment plan which not only caters to your future financial needs but also makes your life easier now.

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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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