Life is unpredictable. Unexpected expenses can sometimes knock on your door, and at other times, they might knock down your doors and explode like an avalanche. How do you provide, financially, for rainy days like these? It is advisable that you should section off at least a part of the life insurance claim settlement to an already existing emergency or rainy-day fund.
Why you need a rainy-day fund:
As mentioned, expenses don’t always arrive with prior notice. Sometimes you just have to be ready for gigantic expenses you did not envisage, or enormous costs that emanate from unfortunate situations such as sudden unemployment. Saving for the rainy days isn’t just some adage our grandparents swore by; this has material consequences. Having an emergency fund should be an important financial consideration for any household.
However, planning to make provisions for emergencies requires more thought than just putting aside some money to buy an extra mattress. As a rule of thumb, your emergency fund should cover at least 6-8 months of all your day-to-day expenses. Such an amount is critical to avoid a financial crisis in case anything happens.
The rationale is simple: putting aside some money into an emergency savings fund in an accessible relatively liquid format should be a priority for everyone. No matter how acute an investor you are, when there’s an emergency, liquidity and availability are of utmost importance.
An effective way of doing this is by investing in a savings plan
Never underestimate the little things in life. These little things can add up to be your savior in times of crisis. Savings plans offer you multiple avenues to save and grow your money. These investment plans help in channelizing your savings in a systematic and disciplined manner, ensuring that you and your family achieve your financial goals. But more importantly, these liquid investments can be of immense utility in times of immediate, sudden and absolute need. We all set aside our savings, hoping that bit by bit, it will accumulate into a substantial amount to fall back on in times of need. We all work and save ambitiously so that there’s a cushion in case we are met with a sudden blow. A savings plan will provide a system to this ambition.Here’s how:
Advantages of savings plans
- A savings plan or an endowment plan (insurance plans) is especially suitable for investors who are keen on minimizing the impact of uncertainties in their lives and equally keen on investing conservatively.
- Savings plans function as guaranteed savings insurance plans that help you fulfil your dreams by offering lump sum benefit on maturity. Thus, they help you to create a corpus to achieve your short to long-term goals as per your choice along with securing your family’s future with insurance cover.
- Money back plan is a type of savings plan. This means that they are systematic savings plans through which a life insurance company offers guaranteed money back with payouts at regular intervals along with protection from unforeseen events with insurance cover.
- An endowment plan helps you accumulate your savings for your financial needs at every stage of life. And with the added component of life insurance, such a savings plan may also offer to protect your family against critical illnesses.
- Online investment plans offer various features like tailor-made cover options, freedom to choose benefits, flexibility to increase life cover, that help meet your specific financial needs.
It is a wise decision to opt for a savings plan when designing your investment portfolio. The plans offer tangible benefits such as assured returns, death benefits, survival benefits and tax benefits. You can choose to fund any of your goals: whether buying a home, spending on a grand wedding, your child’s higher education, your retirement needs. These endowment plans also enable you to provide for exigencies and contingencies for your family.
Make sure you have readily available funds with a robust savings plan! To know more about Term Insurance, browse the website for various Term Plans offered by PNB MetLife.
To know more about Term Insurance, browse the website for various Term Plans offered by PNB MetLife.
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision..
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