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Reasons Why You Should Opt For Long Term Saving Insurance Plans

Published On Apr 01, 2021 12:00 AM By InsuranceDekho

Generally, insurance plans will offer life cover and will pay the guaranteed amount to the dependents after the death of the insurer. But those who wish to experience active financial goals, choose savings insurance plans to enjoy both financial gains and a secured future for their dependents. These plans are also termed as endowment plans and are popular recently as they add a savings and investment orientation to the life insurance scheme.

Through these schemes, insurers get a guaranteed amount called the sum assured at the time of death of the insurer along with bonuses during the term of the contract or on its maturity. Thus, a portion of the premium goes towards risk cover, whereas the other portion is invested on the behalf of the policyholder to render bonuses. 

Do Read: Five Reasons Why You Must Buy a Life Insurance Plan

Top Reasons to Opt for A Long Term Saving Insurance Plan

The long-term savings plan is highly beneficial as they render excellent returns and there is also no need to check the market for its performance. The benefits of the policy depend on the plan that is been purchased and generally they have the following advantages.

1. Returns are Guaranteed

The long term saving insurance plans help to avoid all market-related risks. They are a good option to gain risk-free fixed returns without indulging in market-related risks. Also with these insurance plans, insurers can get fixed income during the scheme or upon its maturity.

2. Long-Term Benefits

By adopting a long term insurance plan, insurers can be sure that the value of money invested does not decrease due to inflation over time. As these schemes have a huge lock-in period and prevent insurers from withdrawing money, it helps with compounding interests, to be paid at the time of maturity.

Must Check: What Is the Right Age to Purchase Life Insurance?

3. Financial Security

The long term saving insurance plans render both financial security and death benefit along with mitigating market risks. The plan helps with great returns such as security of the sum invested and death benefits, where the sum insured is paid to the nominees upon the death of the insurer. 

4. Tax Benefits

By choosing the long term saving insurance plans, the insurer can enjoy tax deductions as incentives from the Government. Investment in savings plans can offer tax saving opportunities up to Rs.  1.5 lakhs under section 80C of the Income Tax Act. 

5. Inculcates Saving Discipline

Long term plans inculcate the habit of saving money systematically and in a disciplined manner. These plans also hedge the investment against market fluctuations, thus rendering optimal benefits.

Bottom Line

There are more reasons to invest in a savings insurance plan as the insurer can enjoy both protective life-cover while living and help his family members with death benefit upon his demise. They also render maturity benefits, if the policyholder survives the term of the plan. They can also be a steady source of monthly or annual income along with financial aid to pay for medical expenses, depending on the type of the plan. 

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