Facing unforeseen circumstances can be made easier by having some financial support assembled in your heydays. The right plan can not only help you grow your savings more rapidly, but it may also allow you to have access to your money when you may need it the most. Hence, choosing the right savings plan can be vital.
What are Savings Plans?
Most people with responsibilities understand the importance of saving. For some, savings are a way to fund their future goals. For others, they are a way to stay prepared for any surprise life may throw their way.
Irrespective of what reasons fuel you to build your wealth, the right savings plan may help you achieve your financial goals and more. These are plans that offer guaranteed returns upon maturity, alongside a life cover, and several other benefits.
But why should you opt for savings plans instead of putting your money into a savings account? You may see why if you use an online savings plan calculator. These plans tend to offer relatively higher interest rates as opposed to your regular bank accounts. Thus, you may be able to achieve your financial goals much faster.
Furthermore, you are also offered a life insurance plan within these plans. Thus, you won’t have to worry about the future of your loved ones while chasing your dreams. There are various plan types and policy providers one may choose from, depending on the features and benefits they may seek.
Factors That May Help You Select A Savings Plan
Long-term financial planning requires a careful selection of plans that suit your goals. One is expected to be mindful when choosing a savings plan, to ensure their needs and goals are met. Here is a look at a few of the factors you may consider when choosing the right plan.
- Financial Goals
Choosing any financial instrument to add to your portfolio should be a well-thought decision. The first step to ensuring relatively flawless planning is to define your financial goals. These will depend on where you are in life and what you see for yourself and your loved ones in the next few years. This should help you define your expectations from savings plans and choose the right plan.
- Risk Profile
Some plans, such as ULIPs, can be market-linked. If you are in the latter half of your career, you may not want to indulge in the options that bring along any market risks. However, these options may also be offering higher returns in the longer run. Hence, younger consumers may be able to afford the risk and find such policies more worthwhile.
Before choosing a savings plan, define your risk appetite and shortlist plans accordingly.
Most savings plans offer mid-to-long term options. For example, even if you want to invest a single, lump-sum premium amount into a plan, you may not expect returns immediately. Thus, keep in mind that these plans are options to create long-term financial stability, and may not be suitable for your short-term goals.
- Plan Features
There are a number of plans available today, with numerous policy providers. If you have well-defined goals, it should be easier for you to shortlist plans based on what you are looking for. Once you do so, ensure that you take a good look at the features and benefits offered by the plan. Is the plan market-linked? Are there any riders available for the life cover aspect? It is ideal to have these questions answered before you buy the plan.
Savings plans are one of the most suitable options for consumers looking to get a life cover along with wealth building in a single plan. Such plans help you achieve your dreams while simultaneously taking away a part of your worries about your family’s financial future.