Saving plans are life insurance products that offer you an opportunity to accumulate your wealth for the future.
These investment plans are designed to help you invest in a systematic and disciplined manner so that you can achieve your long-term and short-term financial goals.
A savings plan comes equipped with various features that help you meet specific financial needs by making suitable investments as per your risk appetite.
Along with wealth accumulation, these instruments also offer you insurance coverage, making them the best investment plan for your portfolio.
Since the government backs these savings plans, you can rest assured that your money is in safe hands and that you will get low-risk returns over a while.
If you are looking for the right savings plan for yourself that can help grow your money faster, then these are the perfect instruments for you. This way, you will not only inculcate the habit of saving every month but also get reasonable returns on the amount saved.
However, with so many options in the market, it is natural for you to feel confused about choosing the best saving plans in India. However, these tips right here will help you make informed decisions with confidence and ease.
1] Assess Your Needs
Before you delve into a saving plan, you need to assess your financial goals at different stages of life. You can use a savings plan calculator to determine the value of investments and a suitable tenure that you can afford and maintain.
This will not only give you an insight into the practicality of the plan but also help you understand if the investment is worth your money. You need to input the following details in the calculator.
- Initial down-payment you can make towards your investment.
- The monthly contribution that you can easily afford.
- Tenure of the investment.
Additionally, you should also consider factors like inflation to come up with an approximate sum assured at the end of the tenure. Ideally, it should be at least 15-20 times your current annual salary.
2] Understand About Different Fund Options in Your Savings Plan
If you are a savings plan in India that provides you with insurance and investment benefit, then the Unit Linked Insurance Plan (ULIP) is your best bet.
There are many benefits of ULIPs that offer you a life cover that protects your family against life’s uncertainties, such as your untimely demise. At the same time, it offers you good returns by investing a portion of your investment in several funds.
You can choose from the available saving plans in India, such as ULIPs, based on your risk appetite. If you are an aggressive investor, then you can plan to invest adequately in an equity-based asset class.
However, if you are risk-averse, then consider investing in debt funds. If you are of moderate risk appetite, then you can invest in a balanced portfolio.
3] Check Liquidity Option
When choosing a savings plan, you need to check if they allow partial withdrawals or not. If yes, then what are the charges applicable on it, how soon can you make your first withdrawal from the commencement, and what’s the maximum you can withdraw.
These questions will help you analyze the investment plan thoroughly. The liquidity aspect of your savings investment will help get access to funds during emergencies.
4] Understand the Policy Terms
When choosing a savings-cum-investment plan, you should thoroughly read about the policy terms and conditions. Avoid investing in anything that you do not understand 100%. This will help you avoid any disappointments when you file for claims.
For instance, online term plans offered by insurance providers such as Max Life Insurance allow you to review the policy benefits and features to help you choose the insurance product wisely.
You can read about the policy inclusions and exclusions, charges, and other such pertinent details so that you can make an informed decision.
5] Diversify your Portfolio
The one simple rule of investing in any financial portfolio is never to place all your eggs in one basket. You must also review your portfolio annually to ensure that you have the best savings plan for yourself.
By diversifying in your portfolio annually, you can get maximum returns on your investment while minimizing the risk. You can create various instruments such as bank deposits, term insurance, ULIPs, and mutual funds in a single portfolio to build the best investment plan.
This will allow you to offset the loss from one source to balance the gain from another.
Since there are multiple insurance companies offering a wide range of saving plans in India, you need to use these tips to ensure that you select the most suitable one.