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Invest for your second innings with a guaranteed savings plan

When you are finally free from the demands of your job, your obligations to settle down and raise your family might start to worry you. This is why it is essential to construct a retirement corpus.

  • 3,568 Views | Updated on: May 24, 2024

A guaranteed savings investment plan offers the dual benefit of life insurance and guaranteed savings, making it an excellent part of any retirement portfolio. Take a look at what these plans are and how they can help you live the retirement of your dreams.

    Key takeaways

    Benefits of the guaranteed savings plan.

  • Beating inflation
  • Creating a legacy
  • Enhancing living standards
  • Preparing for future
  • Arrangement for emergency

Purchasing life insurance is one of the most effective ways to offer your loved ones financial stability even when you are not around anymore. At the same time, it is also essential to regularly save for your retirement so that your second innings is exactly as you’ve always imagined.

What is a Guaranteed Savings Plan?

A guaranteed savings plan is a type of non-linked endowment life insurance policy. Apart from the life cover, the plan also enables policyholders to save regularly over a fixed duration. If the policyholder survives the policy tenure, they receive a lump sum payment from the insurer. In case of their unfortunate demise within the policy tenure, the beneficiary receives the death cover.

The lump-sum payment on maturity could be beneficial in the retirement years for repaying loans, medical expenses, children’s higher education or wedding, or purchasing a home.

What are the Guaranteed Additions in Guaranteed Savings Plans?

The policy tenure in guaranteed savings plans is generally twice the total number of years the policyholder is required to make premium payments. For instance, the policyholder will pay premiums for 10 years for a guaranteed savings insurance plan with a tenure of 20 years.

Once the premium payment term ends, some insurers also offer guaranteed additions on a yearly basis to help the policyholders generate higher returns if they survive the policy term. With some plans, the additions also apply to the death cover amount. With this, the additions increase the amount a policy beneficiary receives on the death of the policyholder.

With some plans, there can also be extra bonuses and additions that are added to the lump sum maturity amount.

Do Guaranteed Savings Plans Come with Optional Riders?

While this can depend on the insurer one selects, most of the top insurance providers in the country do offer a wide range of optional riders with their guaranteed savings plans. These riders slightly increase the policy premium but significantly extend the scope of the insurance plan.

Some of the most popular riders you can consider with the best guaranteed savings insurance plan are a term benefit rider, an accidental death benefit rider, a permanent disability rider, and an accidental disability rider. Get in touch with the insurer to know more about these riders and understand how they add more features and benefits to the insurance policy.

Why is Retirement Planning Necessary for Life?

The golden years are like a new lease on life. It not only offers you the time to settle down and spend time with loved ones, but it also allows you to fulfil lifelong aspirations like travelling to new locations, learning new skills, or pursuing a passion that has been long suppressed due to prior responsibilities. Depending on how well you were prepared for retirement will determine whether you stay in the workforce after retiring.

1. Beating Inflation

The price of products and services has been rising in India. This impacts the standard of living. Without a retirement plan, there is a possibility that your savings will lose value as inflation takes its toll. By making an investment in the finest pension plan today, you are planning forward and increasing your assets to keep up with inflation. Contributions and tax advantages may also assist secure your resources.

2. Arrangement for Emergency

Financial ruin might result from poor health. You should therefore be sure to preserve money throughout your life in case of a sudden medical emergency. Additionally, having the greatest pension plan in place can provide you with an emergency fund that will aid in managing your finances and ensuring you receive the best medical care available in the event of an illness.

3. Enhancing Living Standards

It’s possible that you’ll need to save more money over time than you anticipated. The average life expectancy today is significantly higher than it was 60 years ago, according to national statistics, but this also means that you’ll need to make all of your preparations for a retirement income that will last significantly longer in comparison.

4. Creating a Legacy

You want to make sure that your family will be taken care of even when you are gone. Planning enables you to ensure that, even after your passing, your children’s and grandchildren’s needs will be satisfied. This can be accomplished by ensuring that any financial difficulty brought on by the loss of a primary source of income is as little as possible because, let’s face it, living without one’s parents, spouse, or other close relatives can be emotionally and financially taxing.

5. Preparing for Future

Over time, you might need to save more money than you anticipated. Today, average life expectancy is substantially higher than it was 60 years ago, but this also implies that you’ll need to make all of the necessary preparations for a retirement income that will last significantly longer than it did in the past.

Wrapping Up

The importance of a pension plan as one of the most significant financial investments you may make over the course of your life cannot be emphasized enough. You can think about utilizing a pension plan calculator to calculate exactly how much you need for a comfortable retirement to simplify the process of selecting the finest pension plan. To learn more about guaranteed savings plans and have a thorough understanding of their features and advantages, look for a reputable insurer.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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  • Guaranteed@ Income Benefit for upto 25 years
  • Flexibility to choose income period
  • Premium break for females on child birth or any listed specific illnesses
  • Life cover for the premium payment period
  • Enhance your life cover with rider offerings

ARN. No. KLI/23-24/E-BB/1201

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  • Increasing Life Cover*
  • Guaranteed^ Maturity Benefits
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Ref. No. KLI/22-23/E-BB/999

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