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Why is it a great idea to buy a Guaranteed savings plan?

dateKnowledge Centre Team dateDecember 05, 2020 views143 Views
Why is it a great idea to buy a Guaranteed savings plan?

When the word "plans" comes to our minds, what is associated with that word? The term plans are something most talked about nowadays. The best way to back your future is a Savings plan. These plans are considered the best investment methods by experts.

So, what is a savings plan? And what is the best option for a Saving plan?

A savings plan is an insurance plan that helps an individual to gather and set aside a reserve pool for the future. They ensure returns when the policyholders need it the most. It is a systematic and disciplined plan.

Why do we need a Saving plan?

Age and term:

These plans are flexible and can be molded according to the age of the holder. For example, for a young person, the risk-taking factor may be high so that they may be suitable for unit-linked insurance plans (ULIPs) and those who can't afford risks like money back or endowment plans. The long term plan also allows securing a minimum amount during the policy term.

Life covers and provisions:

Some plans like ULIPs offer life insurance and another benefit of savings return. Other provisions provided by ULIPs are the protection of the holder and his family against any loss like accidental death, disability, and illness.

Options of investment:

They offer investment in tools like equities, including fixed interest securities, including corporate bonds, government securities, and money market instruments.

Saves tax:

Like most plans, Saving plans also offer tax benefits. According to section 80c of the Indian Tax Act, 1961, a policyholder can save up to 1.5 lakhs. Maturity and death benefits are also eligible for tax exemption under 10D of the Indian Income Tax Act, 1961.

Helps in meeting specific goals:

Some of these plans are designed towards meeting the goals of policyholders, like education goals for children.

Types of saving plans:

Invest 4G Plan

In life, you are always the winner, and you never settle for second. So for you, we will provide you with this plan. This plan will provide benefits to your family members in case of your sudden demise. Even if you are a young person or an older adult, this plan will always stick around for your life.

Titanium Plus plan

This plan acts as your protection and protects your hard-earned money, and also provides overall saving benefits. This plan is controlled by you and customized according to your needs.

Guaranteed savings plan

This savings plan provides you with financial security with many more benefits.

Smart Lifelong Plan

This plan creates a protective cover for your life, along with creating wealth as well. This plan will help you avail all benefits in different stages of life.

Smart Future Income Plan

This smart plan will help you in your golden years. It will act as your lifelong companion and assist you in meeting your life goals.

Insure Smart Plan

It's a unit-linked insurance plan. It will provide you with flexibility and benefits in achieving all your aspirations.

Future Smart Plan

Are you worried about your child's future, this plan is just right for you. This policy stays around your child when you can't be there.

Grow Smart Plan

There is a unit-linked plan for providing insurance cover for your all life—an affordable plan with limited premium and more benefits.

Guaranteed Income Plan

You want to fulfill all your child's plans, and you lost your job. In this case, this plan acts as your child's guardian and provides him with benefits.

Jeevan Nivesh Plan

This plan is provided with life insurance cover, along with savings in a single affordable plan.

Money-Back Advantage Plan

This plan provides you with a cashback payout within the policy to guarantee a lump sum on maturity with bonuses.

Guaranteed Savings Plan:

This plan allows you to fulfill all your life goals, like completing your children's education or marriage. This plan will benefit you with assured returns regardless of the downfall of the markets or insurance companies.

We are presenting you Canara Bank's guaranteed savings plan with flexible and assured benefits.

Given are three options that you can choose within this plan :

  • Guaranteed savings plan
  • Guaranteed savings with double protection
  • We have guaranteed savings and premium membership.

You can choose any one plan in the beginning, but you can't alter them after that.

Why is a savings plan essential?

  • Will provide benefit on maturity that all your dues are paid.
  • The guaranteed plan covers you for your life rather than pay a premium option, which is limited.
  • You can choose enhanced protection for your family. Provides benefits upon sudden death; all other premium plans are not payable and guarantee services on maturity (Premium Protection Option).
  • You can choose a flexible payment term according to your requirements.
  • Investors can customize savings and goals according to their Income.
  • Value plan with the premium booster.

How does a savings plan work?

Investors can customize their policies according to their goals and requirements in just three simple steps:

STEP 1: CHOOSING YOUR PERFECT PLAN

According to the investor's financial need, plans can be selected :

  • If they want a life cover within the policy term and lump sum after maturity, they can choose the "Guaranteed Savings plan."
  • If they want enhanced protection with policy benefits and lump sum after maturity, then we can recommend "Guaranteed Savings plan with Double protection" (with sudden accidental death additional amount is given, but in case of other deaths, no amount is paid)
  • And if you are thinking about your child's future, then a "guaranteed savings plan" with "premium protection" is available.

STEP 2: CHOOSING YOUR PREMIUM AMOUNT

You can choose the amount you are comfortable with available at your maturity policy to compromise your financial needs.

STEP 3: CHOOSING YOUR PAYMENT TERM AND PREMIUM PAYMENT

This step will determine how you will choose your payment plan, preference, savings, along with your future goals.

Benefits :

The benefits will change and vary according to the specific plans. Some of the services are given below:

Assured amount of sum on the death, which is a slightly higher amount:

  • You will get 11 times of annual premium
  • 105% of Total Premiums Paid as on date of death, or
  • Guaranteed Sum Assured Maturity, or
  • The reassured amount is paid on death

Survival benefits

The investors can avail of all the benefits at the end of policy years after completing premium maturity. Your guaranteed income will be equal to annual Income with boosters if applicable.

Premium payment term Policy term Total number of income payouts Timing of income payouts Income payment percentage Basic Guaranteed annual income
7 12 5 End of Policy years 140% (The income payout percentage ) × annualized premium
10 15 5 End of Policy years 200% Income payout percentage× annualized premium

Maturity benefits

If you survive through the end of policy ( your dues are fully paid ), then you will receive guaranteed savings at the end of maturity. Then you cannot avail any benefit, and your policy will terminate.

Death benefits

In case of your sudden demise ( within the policy period), your heir will receive all your amount payable, and after that, your policy will terminate. Plus, your survival benefit that is already paid will not be deducted.

Loan facility

In sudden need of cash, you can take the loan amount under the surrender value. The minimum amount of loan is about 20,000 and is the maximum 80% of the surrender value. Loan can only be availed at in-force policy.

High premium boosters

Guaranteed annual income will increase with high premium boosters.

Annualized premium High premium boosters ( as % of basic Guaranteed annual income)
Less than 2,00,000 Nil
Greater than or equal to 2,00,000 to less than 5,00,000 1.00%
Greater than or equal to 5,00,000 to less than 10,00,000 1.75%
Greater than or equal to 10,00,000 2.00%

What's the age criteria?

Guaranteed savings option

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

Guaranteed savings with double protection option

Parameters Minimum Maximum
Entry age (life assured) 18 years 55 years
Maturity age 28 years 75 years

Guaranteed savings with premium protection option

Parameters Minimum Maximum
Entry age ( life assured) 18 years 55 years
Maturity age 28 years 75 years

GUARANTEED SAVINGS WITH PREMIUM

  • Maturity benefits
  • Death benefits
  • Guaranteed Yearly addition

It's never too late or even early to invest in a savings plan. With a guaranteed saving plan, you can live your life without worrying about anything. To achieve this goal, you will need Canara Bank guaranteed saving plan.

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TERM Insurance PLAN

TERM Insurance PLAN

Whole life cover option available

Increase your life cover with changing life stages

Return of premium & in-built protection options

Multiple premium payment options

Avail tax benefits on premiums paid as per tax laws

ULIP PLAN

Unit Linked Insurance Plan

8 funds and 4 portfolio strategies to invest

Loyalty additions and wealth booster

Return of Mortality Charge is available on Maturity under all three cover Options

Flexibility of switching between the fund options to take benefits of market movements or change in risk preference

Pos Easy Bima Plan

Top Benefits

Hassle free

Get double life cover in case of accidental death

Choice of flexible premium payment and policy term

Avail tax benefit on premium paid

Frequently Asked Questions (FAQs) for Life Insurance

The premium is one of the most important factors to consider before buying a policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of www.canarahsbclife.com.

Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.

Insurance companies calculate the premiums based on several factors such as age, gender and occupation.

Age:It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chances of contracting diseases is low. Young people also opt for policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.

Gender:The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.

Lifestyle habits:The premiums for people who smoke or drink is always higher due to higher health risks.

Policy term:Policy terms are also taken into consideration by insurers while deciding the premium amount. Policies with longer tenure are cheaper as compared to short-duration policies.

Mode of purchase: The platform that you use to buy the policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.

Occupation:The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.

Processing life insurance claim is a transparent and smooth process with Canara HSBC Oriental Bank of Commerce Life Insurance.

In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.

Once the form is received, the claim is registered by the insurer.

After the registration of the claim, the company will send the claims pack along with the related forms such as physicianâ s statement form and employer certificate that need to be filled.

Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.

The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.

Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.

Even though a life insurance policy is bought to protect your family in your absence. There are chances of the claim being rejected due to several factors.

False information: If the policyholder provides false information or conceals important information while buying the policy, the insurer has the right to reject the claim after his/her death.

Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance.

Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums

Nominee details: An insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.

Suicide: If the life insured commits suicide within 12 months of buying the policy, the insurance companies generally pay 80% of the total premiums paid.

Buying life insurance online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. Online insurance policies also offer higher benefits. Customers should, however, buy online policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.

The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.

An individual is allowed to have multiple life insurance policies. People opt for more than one policy to increase the cover or avoid claim rejection. In case of multiple policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.

Life insurance policies are of different types. In the case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.

When you buy life insurance, the insurance company asks for the nominee details. Only the person named as the nominee in the policy can cash out a life insurance policy in case of death of life insured.

A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in the case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.

If a policyholder purchases a term plan for 25 years and dies during the policy term. The family receives the death benefit. In the case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment options are chosen the policy works as a source of regular income.

It is a popular misconception that life insurance is only for accidental deaths. A term life insurance plan like iSelect also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.

It is ideal to buy life insurance in your early 20s because it’s is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy life insurance at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.

Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.

Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.

Yes, there are different payment options for you to pay premiums. Here’re some of them

    1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.

    2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.

    3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.

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