Parameters for Best Savings Plan
Parameters to Select the Best Savings Plan
The insurance market offers several life insurance plans to the customers. Here in India, life insurance policies are used basically for both investment and life coverage purpose, considering the overall financial planning of the family. However, every life insurance plan is unique; a few essential parameters must be checked before selecting the policy.
Risk Appetite
Before purchasing any savings or investment plan, it is always advised to determine the risk appetite. Personal, as well as financial goals, ambitions, income and age are the fundamental factors on which your risk appetite can be determined. It is observed that people up to their 30s are a high-risk taker, whereas as the age increases, the risk-taking intensity decreases. Younger people tend to choose more aggressive investments, such as large part of their money in equities and a minor part in debt.
Investment Term
Most of the life insurance plans offer majorly long-term and mid-term investment options along with the tax saving benefit. ULIPs are considered to be the best to build a sizeable corpus over the term of the policy. Considering the financial needs, the investment term can be decided. Some plans have a fixed term which is designed as per the policyholder’s convenience and fluctuating market conditions.
Ultimate Objective
The principal objective of choosing the best savings plan is the amount the policyholder will be getting at the end of the policy term, along with the tax saving benefit. The financial goal may be anything, starting from gathering the retirement corpus, to property loan, and from children’s education to their marriage.
Features of the Plan
Many savings plans are available in the market, and each plan has different characteristics. The best savings plan enable to withdraw the money partially by compromising a certain part of the policy. The benefits are retained throughout the policy term irrespective of the partial withdrawals. Few savings plan have a fixed term for the life cover, starting from five years to 35 years, while others provide coverage for entire life. Depending upon the features of the plan, bonuses can be accrued depending on the performance of the investment in the market.
Flexibility
Uncertainties don’t come with prior notifications. Thus, for any short-term financial needs, the best savings plan offers the provision of surrendering the policy. However, it is always advised to complete the policy tenure to avail maximum benefits.
Enlisted above are some of the key parameters that you need to consider while choosing the appropriate savings insurance plan. The best savings plan incorporates all the factors with the maximum offerings to the policyholder. Choose the best savings plan, now!