Life Insurance - Kotak Life Insurance Company in India
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

Who Should Invest In Savings Plan
  • 22nd Jul 2022 |
  • 2,652

A savings plan is one of the safest options to help you save money to fulfil the financial goals of your life. Saving provides stability and peace of mind while offering a financial “backstop” for life’s unforeseen events. Savings can act as “seed money” for higher-yielding assets like stocks, bonds, and mutual funds after an appropriate emergency fund has been developed.

The kind of savings plan that you must use depends on various factors, including:

  • Risk Appetite
  • Financial Goal
  • Time
  • Income etc.

Do you wonder who should invest in a savings plan? Individuals with an income and a financial goal can use a savings plan to invest and grow their money in the long run. Let’s dig deeper to get an understanding of the savings plan.

Types of Savings Plans

There are four types of savings plans you can use per your preference and future needs.

Endowment plan

An endowment plan refers to the insurance plan that offers the policyholder or the nominee a lumpsum amount on maturity or on death. It can be used to build a risk-free saving corpus and provide financial security to the family in case of sudden demise.

Features of the Endowment plan

  • Safe investment option with a minimum guaranteed return
  • Bonus addition benefits
  • Life cover and goal protection option

Money-Back Plans

The money-back plan is a type of insurance plan that allows the insured to receive a regular return or a lumpsum amount during the policy interval. The returns here can be guaranteed, depending upon the investment performance, or can be a combination of both.

Features of the money-back plan

  • Safest investment with guaranteed returns
  • Bonus additions payable on maturity
  • Cash flow maintaining option

Unit Linked Insurance Plans (ULIPs)

A Unit Linked Insurance Plan (ULIP) is an insurance plan that offers the dual benefit of investment to meet long-term goals along with a life cover to protect your family in case of an unfortunate event. A part of your premium is contributed towards the life cover, while the other part is invested in the funds of your choice.

Features of ULIP

  • Invest as per your risk appetite
  • Multiple investment options are available
  • Goal protection option available
  • Bonus additions for long-term investors

Retirement or Pension Plans

It is a type of investment plan that helps the policyholder to accumulate part of their savings over the long-term period so that they can stay financially stable. This plan helps you to deal with post-retirement uncertainties and helps to ensure a stable flow of income after retirement.

It is a type of investment plan that helps the policyholder to accumulate part of their savings over the long-term period so that they can stay financially stable. This plan helps you to deal with post-retirement uncertainties and helps to ensure a stable flow of income after retirement.

Features of pension plan

  • Long-term safer investment
  • Concerned with generating long-term stable cash flow
  • Bonus additions may be available
  • Life cover option avail*-able

Savings plan

It is beneficial for all those who wish to stay safe and financially sound in the long term. Let’s now understand the situation and which savings plan would be better for the investment - in case you are the head of your family, then you might need savings to meet the following long-term goals:

1. Higher education for children

2. Marriage goals for children

3. Home renovation work

4. Retirement savings for spouse

5. Family vacation goal

To meet these goals, you can apply for either an endowment plan, a money-back plan or a ULIP. All these investments offer a safe return.

Benefits of Savings Plan?

  • You can even apply for a savings plan if you want to offer financial coverage to your family even after you. All these plans will give you the advantage of securing your family in case of any unexpected events.
  • After your professional life is over, a retirement plan will help you seek a stress-free retirement and a comfortable lifestyle.
  • If you want to build wealth apart from your common financial goals, savings plans can help you do so. ULIPs are the best savings plan that can assist you in building wealth passively.

To get the benefits of your savings plan, it is advisable to start investing as soon as you start earning. You can then choose a savings plan according to your financial need, risk appetite, and investment horizon to achieve specific financial goals and live a stress-free life.

When to Buy a Savings Plan?

When you have a salary but little to no cash on hand, you should start saving. Make it a point to accumulate enough cash savings to last for six months’ worth of spending. This safeguards you from unanticipated financial crises like a car accident or job loss.

Long contract terms apply to savings plans (usually one or three years). As a result, buying Savings Plans is recommended if you intend to use them consistently over an extended period of time.

FAQs

1. What are the savings schemes?

  • Unit Linked Insurance Plan (ULIP) A ULIP is an insurance plan that combines the twin benefit of investment to realise your long-term goals, and a life cover` to financially safeguard your family in case of an untimely incident. There are two portions to the premium paid for a ULIP.
  • National Pension Scheme (NPS) A specialised section of the Pension Fund Regulatory and Development Authority, which reports to the Indian government’s Ministry of Finance, is the National Pension System Trust. In India, a defined contribution pension scheme that is voluntary is known as the National Pension System.
  • Pradhan Mantri Vaya Vandhana Yojana (PMVVY) An insurance-cum-pension programme called PMVVY offers security to senior citizens.
  • Public Provident Fund The National Savings Institute of the Ministry of Finance introduced the Public Provident Fund (PPF) as a savings-cumulative-tax-saving vehicle in India in 1968. The scheme’s primary goal is to mobilise small savings by providing an investment with respectable returns and income tax advantages.

2. How do I create a savings plan?

Here are the ideal steps to create the right savings plan.

  • Decide why you want to save. Create an emergency fund if necessary.
  • Creating a SMART objective through goal-setting.
  • Determine the amount of money and the number of weeks you will need to save for that objective.
  • Divide your desired savings by the number of weeks you have available. Your weekly savings goal is that amount.
  • Consider ways to boost income or reduce spending to reach your weekly savings goal.

3.Are savings schemes tax-free?

Tax exemption is available on the investor’s investments up to a maximum of ₹1,50,000. ELSS (Equity Linked Savings Scheme), fixed deposits, life insurance, public provident fund, a national savings scheme, and bonds are a few examples of these assets.

4.Why is the savings plan important?

One of the key components of accumulating wealth and having a stable financial future is saving money. You may escape life’s uncertainties by saving money, which also allows you the chance to live a decent life. You can avoid many difficulties and barriers in life by setting aside money in a disciplined manner.

It can help you in times of need and ensure your family has resources in case something unfavourable happens. Depending on your ability to save, you can get a car, buy a house, or save money for retirement. You can secure your future and enjoy the most that life has to offer while still leading a very satisfying life.

Download Brochure

Features

  • Increasing Life Cover*
  • Guaranteed^ Maturity Benefits
  • Enhanced Protection Through Riders
  • Tax Benefits
  • Dual Benefits: Guaranteed^Maturity + Death benefits

Ref. No. KLI/22-23/E-BB/999

T&C

Browse our library of resources

Download Brochure

Features

  • Enhanced Protection Through Riders
  • Life Cover
  • Tax Savings
  • Multiple Premium Payment Terms
  • Guaranteed @ Loyalty Addion
  • Accrued Guaranteed @ Additions

Ref. No. KLI/22-23/E-BB/490

T&C

- A Consumer Education Initiative series by Kotak Life

Similar Articles

ITR 1: Sahaj Form

Save Income Tax by 31st March: Here Is a Checklist

Received an Income Tax Notice? Your Guide to Understanding Intimations under Section 143 (1)

Section 16 of the Income Tax Act (ITA), 1961

Investing Lump Sum Amount

Union Budget Highlights – 1st February 2022

Section 80G of the Income Tax Act

8 Things to Help You Select a Savings Investment plan

आयकर रिटर्न (आईटीआर) फॉर्म के प्रकार

How to Pay Advance Tax Online in India

5 Unusual Investments You Didn't Know for Saving Taxes in India

How to Claim TDS Refund for Excess TDS Deduction?

सुकन्या समृद्धि योजना (SSY) के कर लाभ क्या हैं?

Penalty For Late Filing TDS Return

Tax-Free Income in India

What To Do If Your TDS Is Not Deposited With The Government?

Income Tax Exemption for Disabled

Have You Considered Term Insurance a Part of Your Tax Planning?

Guaranteed Return Plans-Why is it a must for you?

Problems People Face with Tax Returns after a Job Change

How To Save Tax Better with 80C

What is Tax Deduction at Source (TDS)?

Challan 280 - How to Use Challan 280 to Pay Income Tax

Everything You Need to Know About Tax Benefits of National Pension Scheme (NPS)

आयकर स्लैब 2021-2022

Income Tax Benefits for Doctors

What is HRA (House Rent Allowance) and How is HRA Exemption Calculated?

What is Section 80C Deduction Limit?

9 Income Tax Myths That Could Cost You Money while Filing returns

Income-Tax Liability- The Difference Between Gross Income & Total Income in Calculating Income Tax

भारत में महिलाओं के लिए सरकारी योजना

Sub-sections Under Section 80C of the Income Tax Act, 1961

What is Form 26AS - All You Need To Know

How to e file ITR on Income Tax Government Portal

How to View 26AS and Download Form 26AS Online

Things to Do After Filing Income Tax Returns

Difference between Section 80C, 80CCC, 80CCD & 80D

How Much Money This Budget 2019 Can Help You Save

What is Form 16A?

How to File Income Tax Return for First Time Tax Payers

What is Section 80C Deduction?

Income Tax Deduction Under Section 80CCC In India

Tax Saving Guide for 2019-20

प्रत्यक्ष कर और अप्रत्यक्ष कर में क्या अंतर है?

List of Important Income Tax FAQs

How To Save Tax Using Life Insurance?

Tax Season Is Coming- Know How to Save Tax

Interest Imposed Under Sections 234A, 234B and 234C

Income Tax Filing Using Multiple Form 16

What is Section 195 of the Income Tax Act? TDS on Non-Residents of India

Income Tax Deductions for Disabled Person Under Section 80U

What Is Advance Tax and How Is It Calculated?

How to Check Income Tax Returns Status Onine?

Can You Get Term Insurance Without Income Proof?

How to Download Form 16?

How to e-Verify your Income Tax Return

What is the TDS Rate on Salary?

Home Investment Plan to Buy Dream Home

LTC Cash Voucher Scheme October 2020 – Everything You Need to Know

धारा 80डी आयकर अधिनियम, 1961

ITR 2 Form – Complete Guide

Why is Form 16 Important?

Tax Benefits for Startups in India

How to Get Form 16?

E-Filing of Income Tax Returns in India

Why January Is an Important Month for Saving Tax?

How can I get Form 16B from traces?

A Guide to Life Insurance Policy’s Tax Benefits and Taxability

ITR-6: Guide to filing ITR-6 Form online

What is ITR & How to File Income Tax Return?

Section 44AD of Income Tax Act for AY 2021-22

Pradhan Mantri Suraksha Bima Yojana

How to File ITR Online

What is TDS Slab?

Tax Deductions You MUST Know

How to File Income Tax Return without Form 16

Tips to plan your savings in 2019

TDS Due Dates of FY 2020-21 For Return Filing

How to File Form 16 for Salaried Employees?

What are Direct Taxes? How to Avoid being Overtaxed?

Tax Benefit of Investing in Term Plan

Income Tax Exemption for Physically Handicapped Dependent

Tax Saving Tips: Best Ways to Save Income Tax for 2021

Guide for Tax Calculation on your Salary

Tax Planning and Tax Benefits of Life Insurance

What is Section 10D of the Income Tax Act?

Do Beneficiaries Pay Taxes on Life Insurance?

52 Weeks Savings Plan: Daily Savings Plans for a Better Tomorrow

What is the Difference Direct Tax and Indirect Tax

Presumptive Taxation for Business and Profession

What is the Last ITR Filing Date and Penalty for Late Filing of ITR?

Tax Structure in India

How to View 26AS and Download Form 26AS Online?

How to file Form 16 online?

Section 80C Deductions as per Income Tax Act, 1961

Financial Benefits and Government Schemes Every Woman in India Should Know

What is Form 16B?

Impact of GST on Life Insurance in India

Income Tax Deductions Under Section 80C

What Investment Options Come with Tax Incentives?

What is Section 80C - Explained in Detail

What is Salary Protection Insurance and Why You Need It

Financial Planning and Best investment options for Housewives

इनकम टैक्स रिटर्न कैसे फाइल करें?

How to Save Tax on Salary Arrears?

How to save tax for salaried person?

Section 10 (10d) of Income Tax Act, 1961 on Payouts of Life Insurance Policy

Types of Income Tax Return (ITR) Forms

Tax-Savings Investments and Options in India

What is Section 80CCC of the Income Tax Act 1961

When Should TDS be Deducted and Who is Liable to Deduct it?

Income Tax Filing For NRI in India

Why Tax Planning Should Be an All-year Round Activity

All about TDS Payment Online & Due Dates

How to Check Income Tax Refund Status Online in India

How to Check Income Tax Refund Status Online in India

Insurance and Endowment: Everything You Need to Know!

What is TDS Exemption Limit?

Income Tax Deductions & Exemptions under Sections 80C, 80D & 80DDB for FY 2021-22 & 2022-23

Saving Income tax in 2017 - 18

What is Tax Evasion and What Are The Penalties For Tax Evasion In India?

What is ITR 5 Form and How to File ITR 5?

How to File TDS Return?

Types of Riders in Insurance Policy

Tax Exemption and Scope of Coverage

5 Popular Tax-Saving Schemes in India

Section 80E: Tax Exemption on Interest on Education Loan

All You Need to Know About Section 80C

Understanding Tax Exemptions in ULIP (Old and New)

A Comprehensive Guide to Understand the ITR 7 Form

धारा 80सी आयकर अधिनियम, 1961

All about TDS on Salary under Section 192 – Kotak Life

Income Tax Slabs and Rates in India for FY 2021-22/AY 2022-23

Investment Proofs You Need Submit To Lower TDS Cut From Your Salary

What is the Percentage of Tax Deducted at Source (TDS)?

A Complete Guide for Filing ITR 3 Form

How to File Income Tax Return - Everything You Need to Know

Top 8 Tax-Saving Methods in India- Budget Planning

Budget 2019: Impact on the Common Man in India

Section 80D - Medical and Health Insurance Tax Benefits Under Section 80D

Tax Saving for Self Employed in India

What is the Difference between Form 16 and Form 16A?

Tax Saving Options for Salaried Employees

Tax Benefits of ULIP Plans Available for NRIs

How to File Form 10E for Tax Relief on Salary Arrears?

Tax Saving Options other than Section 80C

What are the Different Types of Taxes in India?

Are Financial Planning and Tax Planning the Same Thing?

How to Save Income Tax with Insurance

What is TDS Refund Process?