When is the Right Time to Buy a Savings Plan?

Earlier, life insurance policies aimed solely at helping secure the policyholder’s family’s financial security in case of the policyholder’s untimely demise. But with the changing times, more doors are opening, and life insurance is not just about these life covers anymore. In fact, now it has started focusing on other important aspects, too, namely savings, investments, and annuity payouts. The savings plan is one that gathers the most attention. 

A savings plan is an endowment plan that helps you create a disciplined savings strategy for yourself. It is a form of life insurance policy that provides the dual benefits of a life cover as well as an active investment to serve your long-term financial goals. That is why more people are now switching to a savings plan and its benefits. 

If you are also planning to make a savings plan purchase, you might be wondering when the time is right for it. This article is here to help you with that. 

What Is A Savings Plan?

A savings plan is a type of life insurance policy with two types of benefits. On the one hand, it acts as an incredible investment opportunity so that you can cater to all your long-term goals. On the other hand, it provides a life cover so your family’s financial protection can be taken care of in your absence due to an untimely demise. 

The purpose of a savings plan is to help you understand the value of both savings and investment at the same time. It also helps you to adhere to both of them with ease, patience, and discipline. The maturity benefit is also good with this type of plan. These payouts can be used to fulfill most of your life’s financial goals and help your family with it too. This means all your family’s financial interests, needs, and preferences will be taken care of under this type of plan, including yours. 

When Should One Buy A Savings Plan?

A savings plan is visibly a long-term investment. That is why the longer you invest, the greater its benefits will be for you. That is why most experts suggest investing in a savings plan as early as possible. Between 20 to 30 years is the best time to make this happen as this can help you enjoy better returns after a long period of time. Let us understand it better with more in-depth explanations. 

When you purchase a savings plan at the age of 20, the premium is low. However, the tenure of investment is longer. This means you are more likely to get good returns for it. Since the risk of your mortality is lower when you are young, the premiums you pay are also very low. As such, you can start with a low-risk appetite, and once you become a professional at it, you can increase your risk appetite as per your needs. In fact, you will be more equipped to handle one. 

This also means you have access to better tax benefits under Section 80C. 

When you purchase a plan at the age of 30, the premiums may be slightly higher. However, they will still be quite affordable as the risk of mortality will still be fairly low. However, the rise in your income due to promotions or being more stable will help you pay off the premiums without pinching pennies. 

When you purchase a plan at the age of 40, your premiums may be higher. This is because your mortality risk increases, and you may be at an elevated risk of illnesses. That is why we highly recommend purchasing an endowment plan before this period. However, you can still choose to purchase one if you have not because if you plan on buying the plan anytime after turning 40, the premiums will only increase. 

Purchase The Right Savings Plan Quickly

There is no better time to purchase your savings plan than now. The earlier you purchase one, the more likely you are to enjoy lower premiums and a high cover. So, do not keep waiting. Research thoroughly your preferred savings plan and get going with it. Make sure you speak to your financial advisor if you have not already.