“A penny saved is a penny earned.” This is the kind of learning that is instilled into the mind of kids from a tender age. In today’s turbulent financial landscape, it is of remarkable importance to have a proper savings plan in place. Setting a little bit aside for later is one of the most important responsibilities that you have to take care of as a provider for your family. Here are 5 important advantages that you don’t know about.
1. Prepare for the Worst: There is a memorable line from the TV show Fargo – “The worst does happen, and you need to be insured.” This one well-written line is enough to explain to you why you need to set up a proper insurance plan. In the event something bad does happen, your family’s financial interests will be protected. Apart from receiving regular payouts as a part of your future savings plan, your family is also going to receive a large cash payout in the event something unfortunate does happen. Financial security is imperative, and by picking the right insurance coverage, you’ll be able to assure financial security to your loved ones for a large period of time.
2. Encourages Discipline: While it can be easy to think that you are going to save more, it is a difficult task to match your actions with your plans. According to economist Dr Richard Thaler, changing someone’s savings behaviour is a difficult task. A long-term insurance savings plan will encourage you to save money in a disciplined way. A proper savings plan will allow you to make saving money a habit. This kind of discipline can be very hard to come by naturally, which is why you need all of the encouragement that you can get. The biggest savings incentive is the relief of knowing you are doing everything to keep your family’s future safe and financially secure.
3. Provides Tax Benefits: A long-term savings plan is a form of life insurance under Indian law. As a result, they allow you to enjoy the same tax benefits as if you had a normal life insurance plan. According to Section 80C of the Income Tax Act, you can get exemptions worth 1.5 lakh INR from your premium payments. A proper savings plan can be a very good investment for your money. You will be able to save a significant portion of your future savings by investing it in a good long-term savings plan. This is an ideal tax savings instrument because the maturity and death benefits are tax-exempt under Section 10D of the Income Tax Act, 1961.
4. Customizability and Flexibility: One of the biggest advantages of a long-term savings plan is the fact that it can be tailored to your personal situation, expectations and needs. Every person in the world has a different set of goals and ambitions, which is why everybody’s outlook towards savings can be different. Scalability and customizability are essential factors here. There are investment options with varying levels of risk and payoff which can be customized according to your expectations and requirements. For example, equity investments or stocks can come with a relatively higher degree of risk. On the other hand, government or corporate bonds don’t have that much risk. However, their payoff is also slightly lower than the former instrument.
5.Ensures that You Reach All Your Goals: With the right savings plan by your side, you will be able to successfully attain each and every financial goal that you have. Be it money for your kids’ education, vacations, or retirement – this kind of long-term insurance plan will ensure that you are 100% safe no matter what in the future. As mentioned before, the savings strategies can be modified to meet the specific goals that you have in mind. By choosing the right long-term, savings plan, you can ensure a better and more secure future for you and your family.
Summing Up
To sum up, always remember that it is never too early to begin saving – but it can be too late. This is exactly why you need a reliable long-term insurance and savings plan that will insulate you and your loved ones from any unfortunate event that occurs in the future.