Meet Your Financial Goals by Choosing the Right Savings Plan
Unit-Linked Insurance Plans (ULIPs) combine insurance and investment. In ULIPs, a portion of your premium goes towards providing insurance coverage and the remaining is invested in market-linked funds.Non-insurance savings options include bank deposits, post office schemes, mutual funds, and stocks. Bank deposits are safe and offer fixed returns.
Post office schemes are reliable and government-backed. Mutual funds and stocks have higher growth potential but involve risks.Each plan type has pros and cons. For instance, bank deposits are secure but tend to offer lower returns.
Mutual funds and stocks can grow wealth but returns can fluctuate.When choosing a savings plan, consider your insurance needs. Firstly, check the amount and type of life cover, health insurance, or other protection. A term insurance plan is essential for securing your family's future.
Term life insurance offers significant coverage at a fraction of cost. Once this part is done, use insurance savings plan to accumulate wealth and achieve financial security.Tax benefits are another important factor. Many savings plan in India offer tax deductions under Section 80C.
These can reduce your taxable income and save money. For instance, under the old income tax regime in India, Section 80C allows for a maximum deduction of up to ₹1.5 lakh from your total taxable income on your life insurance premium payments.Thirdly, flexibility feature in savings plans is a crucial factor. Look for plans that allow partial withdrawals or premium adjustments.
This helps you manage unexpected expenses without financial strain. Consider how adaptable your chosen plan is to your changing needs.Four, transparency is key when selecting a savings plan. Understand the fees,
. Read more on livemint.com
