Here’s Why You Should Invest in a Long Term Saving Insurance Plan

One such investment is a savings plan. There are many options available in the market for savings plans, some issued by the Government of India, the others by public and private banks. They may vary in their interest rates, investment term, and tax benefits, thus leaving us with many options to choose from.

The biggest advantage of a savings plan is that it is backed by the government, making sure that our invested capital is completely safe and secure. They are low on risk and assure good returns.

It is vital to invest in a savings plan to financially prepare ourselves for any unforeseen medical or personal emergencies. It also instils in us a habit of storing funds for a rainy day.

What are the advantages of investing in a Long Term Saving Insurance Plan?

1. Small savings towards investment portfolio - A savings plan allows us to make sustainable savings towards our investment portfolio. This, in turn, helps us build a bigger corpus without having to compromise on our lifestyle. This helps when we are young with a lower income but are keen on investing for our future. 
   
2. Highly liquid in nature - The fluid nature of savings plans allows us easy access to our funds in case of an emergency. 
   
3. Combined benefits of life insurance and investment - This allows us to secure ourselves and our families while building a capital pool for our financial goals. It also ensures financial security for the family in case of an untimely or early demise. 
   
4. Flexibility on maturity payout - Most savings plans provide us with an option to receive a lump-sum amount on the date of maturity. However, some plans also allow a regular stream of income during the policy tenure. Both options are equally helpful depending on the situation and need. In case of building a corpus for our retirement, opting for a lump-sum amount makes better sense. For supporting a child's education, receiving a regular stream of income works out better. 
   
5. Tax benefits on the premium amount - Savings plan offers tax benefits up to ₹1.5 lacs. They allow us to claim tax deduction under Section 80C of the Income Tax Act. The amount received upon maturity is also at times exempted from tax under Section 10 (10 D) of the Income Tax Act.
   

How to choose a Long Term Saving Insurance Plan?

1. Investment term
   Like all investment plans, we must start by setting an end goal. This can help us decide the tenure of our savings. The tenure of the plan also sets the precedence for the capital that shall be invested and ultimately, the final amount that we shall receive at the end of our term. Ideally, a savings plan yields better results when invested in for the long term. 
   
2. Risk involved
   The savings plan is popular for being a secure, low-risk investment option that is backed by the government. While this is true, some options also allow us to choose a more aggressive approach that ensures higher returns on the capital invested. However, it is important to understand how this risk impacts us in the long run before making any decisions. 
   
3. Investment exposure and balance
   At the time of investing our money, it is most important that it should be spread across various investment market instruments. The same should be followed when investing in a savings plan as well. Also, we must try to not stretch our finances too thin while deciding on the premium amounts. This results in the inability to pay the premiums and ultimately, the loss of interest due to penalties. 
   

To conclude, it can be wise to invest in a savings plan when looking for a long-term investment. The tool is good for younger individuals who are looking to build financial portfolios while maintaining an investment that is low on risk. A savings insurance plan can provide us with ample flexibility while instilling a habit of saving for exigencies. The plan also provides us with tax benefits and insurance cover in case of a medical emergency. 

Visit PNB MetLife website to know more about term plan, term insurance & life insurance