A career break may happen for several reasons, voluntary or involuntary. While it may be a much-deserved break, it may also be a very challenging phase where a lot of savings get wiped out. However, there is no charm in holding on to the negatives, and you have to get past them and rebuild your wealth. To do so, you may consider saving insurance plans. These special financial tools help you to comfortably create a corpus and have your savings back smoothly and practically, while offering several benefits. Let’s find out more in the article below.
What are the savings insurance plans?
The saving insurance plans are special types of insurance policies that allow you to invest in small amounts and build up a corpus over a period of time. You can save with a specific financial goal in mind, or simply save to build up your wealth after a career break.
The common types of saving insurance plans include an endowment policy, money back plans, ULIPs, child plans and so on. You get several options to choose from and save according to your needs.
The plans offer life coverage as well, so you can save peacefully, knowing your family’s financial future is secure, and if anything happens to you, they will get the monetary support they need. This feature is available in all the plans, including the ever-popular endowment policy.
The beneficial features of saving insurance plans
The savings insurance plans, like an endowment policy, offer some extremely beneficial features that make it easy for you to build wealth after a career break. They include:
- Systemic savings
The savings insurance plans help you to save systematically. You can invest in small amounts or choose to pay a higher premium, based on your financial capabilities. You can also choose the tenure of coverage, add riders and customise your plan. Hence, you get many ways to plan your investment and be systematic about the returns, which is truly an invaluable advantage.
- Comfortable tenure
As stated, you can choose the tenure of your investment. You can get an endowment policy for 25 years or a ULIP for 5 years, based on your requirements. This allows you to invest as per your needs and meet your specific financial goals. For example, if your daughter is 8 years old and you wish to send her abroad for her higher studies, get a child plan for 10 years and create a corpus to pay her college admission fee in 10 years.
- Compound interest
You get the benefit of compound interest when you invest in the best savings insurance plans. This becomes even more significant when you stay invested for a longer period. You can see this benefit in your corpus, which grows at a faster pace with the help of compound interest.
- Participating plans
Many of the savings insurance plans offer market returns as they are participating plans. If you choose an endowment policy, your money is invested in low-risk market tools such as bonds. If you choose a ULIP, your money may be invested in shares and stocks. This allows you to get the dual benefit of insurance and investment under a single policy, and your wealth grows while you stay covered as well.
- Guaranteed returns
You will get guaranteed returns with the savings insurance plans. This is one of the best benefits and assures wealth build-up. All the savings insurance plans, including an endowment policy, come with a maturity benefit. You get a lump sum payment at the end of the policy period, provided you survive the tenure.
- Life cover
The main feature of a life insurance plan is life coverage, and every single one of the savings insurance plans offers life coverage. Whether you choose an endowment policy or a ULIP, the primary focus will remain on life coverage. If anything happens to you in the course of the plan, your family will receive a death benefit, which will allow them to comfortably meet their financial needs in your absence.
- Tax benefit
Premiums paid towards saving insurance plans qualify for a tax deduction of up to ₹1.5 lakhs under Section 80C of the Indian Income Tax Act. This is another major benefit as it helps you in tax planning.
To wrap it up
Whether you prefer an endowment policy or a ULIP, invest in the best savings insurance plans and build up your wealth once again, after you take your career break. This is a handy way of keeping your finances safe and creating a comfortable life for yourself and your loved ones. Thankfully, there are some excellent insurance products available in India these days, and you can choose the one that matches your financial goals. Invest wisely and get the desired returns.