A savings plan is a traditional endowment life insurance plan that provides you returns over the long term to enable you to meet your life goals. It allows you to save in a systematic manner over a long term, which is crucial in helping you achieve your dreams.  

A savings plan has two components – insurance and wealth creation. With an insurance cover, you can ensure that your loved ones do not face any financial hurdle in case something happens to you. The second part on the other hand, invests in a portfolio of largely, government bonds, fixed deposits etc, to enable your investments to grow. Savings plan is an apt option if you are looking for a returns with moderate risk in the long term.

Under savings plans, one can opt for a participating plan or a non-participating plan. A participating plan allows you to benefit from the profits of the insurance policy in the form of bonus. On the other hand, non-participating plan comes with guaranteed returns. Bonus is not applicable to a non-participating plan. 

• Savings plus life insurance cover: A part of the premium goes towards ensuring a life cover, and the rest of the amount is invested in a conservative portfolio of bonds and other fixed-income securities.

• Eligible for tax saving investments: The premium invested in savings plan is eligible for Income Tax deductions up to Rs 1.5 lakh under Section 80C of the Income Tax Act, 1961. The maturity benefit and death benefit are also eligible for tax benefits under Section 10(10D) of the Income Tax Act 1961, subject to the provisions stated therein.

• Bonus: Under participating savings plan the policyholders are allowed to participate in the surplus of the Insurance Company which the Company may declare in form of bonus to policyholders thus adding to your overall returns. Click here to know more about our bonus history. Bonus under participating plans are not guaranteed and depends on the performance of the Company.

• Loan: You can avail the loan against your savings plan to meet any expense.

• Death and Maturity Benefit in instalments: In some plans one can opt to receive death and maturity benefit in instalments to ensure judicious use of funds.  

• Compulsory savings: A key advantage of savings plan is that it encourages disciplined savings, thus allowing you to meet your life goals. 

Keep these factors in mind to get the preferred savings plan:

• Investment objective: Before you decide on the savings plan, be aware of your life goals, and time horizon in which you want to accomplish your goal. This will help you in deciding on the savings plan which best meets your requirement.

• Policy term: Choose the policy term in keeping with your life goal. For instance, if you need a corpus for purchasing a home in the next ten years, then go for a policy term of seven-to-ten years.

• Regular income: Some savings plans come with the feature of guaranteed regular income after a certain period. You can use the second income to reach your goals faster.

• Life cover: Savings plan offer a dual benefit of savings and life cover. It is a good addition to your term insurance cover as they offer life cover and also ensure systematic savings over long term to help you achieve your life goals.

• Bonus: Savings plan reward long-term customers of participating plans with bonuses, so opt for a plan that has a track record of giving good bonus regularly. However such bonuses are not guaranteed and depends on the performance of the company.

• Guaranteed Returns: The non-participating savings plan offer guaranteed returns, subject to fulfillment of certain policy conditions. This way you are sure about the returns and can plan your expenses accordingly. 

Bajaj Allianz Life is a trusted life insurance company and one of the leading players in the life insurance industry. With over half a dozen savings plan – from basic endowment plan to regular and guaranteed income plans – Bajaj Allianz Life offers a complete product portfolio of savings plans for you to choose from, to take you closer to your dreams and aspirations.

The Company also believes in delivering that little extra to its loyal customers. A case in point is the recent announcement of Special Bonus, over and above the Compounded Reversionary Bonus, of 1% of the base Sum Assured for its policyholders who have participating policies in force as on March 31, 2018.