Savings Plan: Usefulness and Importance of Renewal
It is exceptionally crucial to save money for contingencies or secure finance for post-retirement in times. Besides, the need...Read Article
Savings plans or savings schemes are long-term safe investment options for investors in India. It allows you to invest a part of your monthly income at a fixed rate of return.
Savings schemes are best if you want to accumulate wealth which remains unaffected by taxes, inflation and market forces. As most savings schemes offer a fixed rate of return on the investment you can save money for a specific future value.
These plans offer a minimum guaranteed maturity value or money back options to help you preserve your wealth and safeguard your financial goals.
Canara HSBC Oriental Bank of Commerce Life Insurance is a joint venture of Canara Bank and Punjab National Bank, along with HSBC Insurance (Asia Pacific) Holdings Limited. Launched in 2008, we offer life insurance products to individuals seeking financial freedom for their loved ones.
Canara HSBC Oriental Bank of Commerce Life Insurance is a joint venture of Canara Bank and Punjab National Bank, along with HSBC Insurance (Asia Pacific) Holdings Limited. Launched in 2008, we offer life insurance products to individuals seeking financial freedom for their loved ones.*Individual death claims settled and reported in public disclosure for FY 2019-20.
Our in-depth knowledge from the renowned public sector banks, combined with years of experience with HSBC, makes Canara HSBC Oriental Bank of Commerce Life Insurance stand out from the others. We have sold lakhs of policies and have a family of millions of happily members.
We are completely aligned with the needs of today’s families and their reliance on a few people for financial needs. That is why we, at Canara HSBC Oriental Bank of Commerce Life Insurance offer products from simple Term Plans to ULIPs, Child Plans and Group Insurance Plans for your specific needs.
It is pertinent to fulfil some crucial financial obligations to lead a happy and content life. These obligations can be of different types, ranging from children’s education and marriage to your retirement. Simply putting aside, a specific amount regularly may not be enough as inflation may erode its value. Every goal requires planned and dedicated investments, and savings plans are the best way to build a corpus over time. Savings plans also merit your attention for a variety of other reasons.
Savings plans, just like other investment products come in different shapes and sizes. The concept of one size fits all doesn’t apply to insurance products. While you may need a savings plan for retirement , someone else may save for his/her child’s education. A savings plan’s sum assured premiums, tenure and the risk varies depending on the financial goal. You can evaluate a savings scheme on a common set of parameters to finalise the best plan.
Before investing in a savings plan, it is important to objectively analyse your risk appetite. If you are in the mid of your career and already have existing financial obligations, it may not be advisable to take excessive risk with your investments. On the other hand, people who are starting out and are in their 20s and 30s may be able to take higher risk. Younger people can opt for unit-linked investment plans that give market-linked returns but carry substantially higher risk. In a nutshell, investments with higher exposure to equities may not be suitable for people with low-risk appetite. People with low-risk appetite may choose traditional endowment plans that have money-back guarantee clause.
The investment tenure is an important aspect to consider before committing your hard-earned money to savings plans. Insurance plans come with different tenures, ranging from short to long term. If you are saving for your retirement, ULIPs, which multiply your savings in the long-term is the ideal product. Without a long-term commitment to ULIPs, you may not be able to receive the maximum benefits from the policy. While one should consider the investment tenure, the flexibility to change the investment duration should also be taken into consideration. Most savings plan provide an option to change the premiums and the investment amount according to the convenience of the policyholder.
Insurance companies offer a host of additional features with savings plans. Read the policy document thoroughly and make an informed decision after considering all the features being offered. Typically, you are allowed partial withdrawals from savings plans to meet emergency liquidity needs. You can get life insurance with savings plans. Some insurers will provide life insurance for a limited time while others offer life-time insurance cover. The Guaranteed Money Saving Plan from Canara HSBC Oriental Bank of Commerce Life Insurance provides life cover for the entire term while you have to pay the premiums for a limited period. With insurance as well as savings through a single plan, you can live a stress-free life.
While evaluating a tax savings plan on various parameters, you should not forget the primary reason for the investment. The final objective should be the base of all decisions. If you aim to save for your retirement and find a savings scheme specifically designed to accumulate a retirement corpus, it should be your natural choice.
When you buy a savings plan, it comes with various charges which are over the premium amount. If the charges are low, it automatically adds up in your savings. The best savings plans have minimal administrative charges. With the Invest 4G plan, you can get back the mortality charges on the maturity of the plan. The policy also offers loyalty additions and wealth boosters, which indirectly lower the final cost of the savings plan.
A savings plan is a broad term for a host of insurance products. Insurance companies in India offer endowment plans, money back plans and ULIPs, which are slightly tinkered to focus on the savings component of the investment.
These savings plans are a mix of life insurance and savings, which helps policyholders save regularly over a period. These plans pay a lump-sum amount at maturity if the policyholder survives the policy term. The maturity amount can be used for financial obligations such as paying for children’s education or buying a house. In case the policyholder dies during the policy term, the beneficiaries receive the entire sum assured by the policy. Endowment plans are one of the traditional insurance plans available in the country. Endowment plans are of two types—with profit and without profit plans.
When you opt for with-profits endowment plans, the insurance company will pay you a part of its profit it earns from investing your funds. The profits are paid as bonuses during the policy term. However, these plans are relatively expensive due to the probability of higher returns.
In the case of without profit endowment plans, the insurance company is not liable to share any profits with you. The chances of receiving higher returns are minimal, but the premiums are also lower when compared to with-profit plans. Some plans, however, may pay a one-time bonus at maturity.
These plans are largely similar to endowment plans, differing only in the mode of benefit payment. Like endowment plans, money back plans are a mix of insurance and savings. These plans differ from endowment plans as they pay the sum assured at periodic intervals rather than as a lump-sum amount. The periodic cash payout is helpful for people who save regularly but need funds at intervals of 4-5 years to buy large assets. You can accumulate considerable funds for 4-5 years which can be deployed to buy a car or for a child’s education. Money-back plans essentially provide flexibility to the policyholder to utilise his/her savings.
The plan pays the balance sum assured if the insured survives the policy term. On the other hand, the entire sum assured is paid irrespective of the payouts already made, in case the insured dies during the policy term. Money-back plans offer savings security, liquidity and life cover under a single plan, which makes them one of the best savings plans. Your savings are protected from the vagaries of market fluctuations as these plans are not market-linked. The regular payouts take care of intermittent liquidity needs, while the insurance cover provides financial security to your family.
With group insurance schemes from Canara HSBC Oriental Bank of Commerce Life Insurance, you can modify the sum assured during the policy term. Many plans provide the option to opt between linear and decreasing sum assured. The master policyholder can also increase the sum assured depending on the promotion or salary increase of the members. The premium payment schedule of plans can also be modified. You can choose to pay the premiums of some plans on a monthly, quarterly, half-yearly or annual basis.
A plethora of fund options coupled with a wide variety of portfolio management strategies help insurance companies to design ULIPs to suit different financial goals. ULIPs for savings can be classified into three broad categories—single/regular premium plans, guarantee/non-guarantee plans, life stage-based/non-life stage-based plans. You can either choose to pay a lump-sum amount as premium for ULIP or opt to invest small amounts at regular intervals for the policy. One-time premium payment plans are called single premium plans, while multiple premium payment policies are called regular premium plans.
Some ULIPs offer guaranteed benefits in order to attract investors with lower risk appetite. It is ideal for people who want a savings plan with the potential of capital appreciation but manageable risks. On the other hand, non-guarantee plans do not offer assured benefits but provide a wide variety of fund options to choose from according to the market conditions. Life stage based ULIPs modify the investment portfolio according to the life stage of the insured to manage the risk efficiently. These plans ensure that the asset allocation reflects the age and risk profile of the investor.
The eligibility criteria for savings plans are not very different from other insurance products. The specific life cover and maturity age are different for different plans. The entry age for Guaranteed Money Savings Plan is 0 years, which means even new-born children can be insured under the policy. The maximum age to invest in the plan is 60 years. The policy term ranges from 10 years to 20 years, while the premium payment term is between 5 years and 10 years. The eligibility criteria for Invest 4G plan is slightly different. The minimum age required to invest in the plan is 18 years, while the maximum age is 65 years. The premium payment term offers ample flexibility ranging from 5 years to 30 years. The policy term varies between 5 years to 81 years for the whole life option. Please read the policy document of the savings plan you intend to invest in for detailed eligibility criteria.
It is the form where all the policy-related information is entered.
Any government-issued document such as passport, driving license, Aadhar card, electricity bill, that can be used as the proof for address.
The individual buying the policy has to produce documents to prove that he has sufficient income to pay the premiums.
Any document such as PAN card, Aadhar card, driving license, Voter ID that can be used to establish the buyer’s identity.
The buyer’s passport, birth certificate, or 10th and 12th mark sheets can be used for age proof.
Every person has a unique reason to save and invest. With ULIP savings schemes, the company caters to people seeking wealth creation through capital appreciation. Contrarily, the traditional plans can help you save for important life goals without worrying about the fluctuation in fund value. All major savings plan offers partial withdrawal facility that can help you take care of unplanned contingencies. With savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance, you get adequate flexibility while investing and receiving the savings benefits.
Savings plan require you to invest a pre-decided amount on a regular basis. People with a regular stream of income who require a lump-sum amount after a period should opt for a savings plan. Working professionals, self-employed people and businessmen should consider a savings plan to meet their long-term financial obligations. Savings plans are also ideal for people who are risk-averse and want to accumulate funds through relatively safer mediums. These plans inculcate financial discipline in policyholders which make them crucial for every portfolio.
A savings plan is likely to be different for everyone depending on the financial goal, risk profile, returns, and investment horizon. If you are young and want to save for your retirement, ULIPs like Invest 4G or Titanium Plus plan would be the best option. You are likely to create a large corpus by your retirement through market-linked returns. If capital protection is your aim, then traditional insurance plans such as Guaranteed Money Saving Plan should be suitable for you.
The amount that should be invested in a savings plan each month depends on the income, existing financial obligations and the long-term financial goal. If you have a steady income, you should save at least 20% of your monthly income. It is not necessary to invest your entire money into a savings scheme as investments should be diversified. Ideally, you should aim to have a financial buffer of over 10 times of your annual income.Read More
The Invest 4G plan with its multiple investment options and various portfolio management strategies for capital protection is an ideal saving plan for retirement.
The Smart Goals plan with its unique features such as modification of the sum assured partial withdrawal and fund switch can help you plan for your long-term financial goals.
The Future Smart unit-linked plan from Canara HSBC Oriental Bank of Commerce Life Insurance is the ideal savings plan for the girl child.
You should spread your investments across financial instruments. However, having a suitable savings plan in your portfolio is extremely important. It ensures financial stability and also helps in fulfilling short, medium and long-term monetary goals.
When you plan to invest in a financial product, it always pays well to start early. The earlier you start saving and investing, the better. When you start investing early, the capital gets adequate time multiply. Even a small amount invested for a long time can give substantial returns due to compounding.
Savings plans are tax-efficient investment instruments. Samridh Bhavishya traditional savings scheme designed to ensure regular income after retirement is the best savings plan for retired mothers.
Yes. Retirement planning is one of the most important financial decisions of our lives. Saving plans offer a host of features that may help you build your retirement corpus. Some of the saving plans like Guaranteed Income4Life offer guaranteed returns at policy maturity. Such returns can act as a regular income stream even after your retirement to help you stay financially stable.
Yes. Best saving plans in India offer partial withdrawal system that can be utilized during your rainy days. Being financially prepared to tackle such odds will help you manage any unforeseen expenses in a smooth manner.
Saving plans are known for helping us achieve our financial goals. Best saving plans allow you to grow your wealth while providing life cover. Saving and investment plans are also beneficial for tax planning. Premiums of savings cum protection plans come with tax benefit under Section 80C of the Income Tax Act. Moreover, proceeds received upon the death of the policyholder or upon the maturity of the policy are tax free under Section 10 10(D).
When you plan to invest in a financial product, it always pays well to start early. The earlier you start saving and investing, the better. When you start investing early, the appreciation in capital is significant. Even a small amount invested for a long time can give substantial returns due to compounding.Read More
Saving plans help in building wealth over time against the investments that you make. Choose the best savings plan to build an education fund for your child. The best saving plan for kids offered by Canara HSBC Oriental Bank of Commerce Life Insurance eases the stress of planning your child's future by providing a lump-sum payout on the investment.Read More
Every person has a unique reason to save and invest. With ULIP savings schemes, the company caters to people seeking wealth creation through capital appreciation. Contrarily, the traditional plans can help you save for important life goals without worrying about the fluctuation in fund value. All major savings plan offers partial withdrawal facility that can help you take care of unplanned contingencies. With savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance, you get adequate flexibility while investing and receiving the savings benefits.Read More