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Important tips to buy a Guaranteed Savings Plan – Explained

Guaranteed Savings Plan


Securing the financial future of the family and loved ones is one of the top priorities for most individuals. Such people want to preserve their earnings while ensuring sufficient returns and insurance coverage. You can achieve both goals by including a guaranteed savings plan in your portfolio.

What Is a Guaranteed Savings Plan?

A guaranteed savings plan is a life insurance product that provides fixed returns on the policy’s maturity. You can choose the premium amount and the policy tenure as per your convenience. Once the policy tenure is over, you will receive a lump sum amount and accrued benefits per the policy terms and conditions.

In the unfortunate event of the death of the life insured, the nominee will receive assured death benefits along with the additional bonus accrued till the date of death.

While there are many good guaranteed savings plans to choose from, you can use some important tips to purchase the plan best suited for your needs.

5 Tips to Purchase Guaranteed Savings Plan

1. Align with Future Goals

Are you saving for retirement, your children’s education, or both? What amount would you need approximately to meet these goals? How much time do you have to achieve the target amount?

Such questions can give you a clearer perspective of your short-term and long-term goals. Once you are clear about your future financial goals, you can better prepare for achieving those targets.

For instance, you can begin with budgeting your expenses. Further, you can decide the policy premium you need to pay for the desired insurance coverage and the maturity amount.

2. Flexibility

Choose a plan that provides you with enough flexibility according to your needs. For instance, you should be able to decide whether you want the policy term to be ten, fifteen, or twenty years. You should also have the liberty to choose the premium payment frequency, such as yearly, half-yearly, quarterly, or monthly.

3. Addition of Riders

Guaranteed plans come with optional riders. These optional riders can significantly enhance insurance coverage in the wake of any unforeseen crisis. So, consider including the useful riders like accidental death benefits, permanent disability riders, term benefit riders, etc.

4. Loan Facility

Anyone can have urgent cash requirements during a sudden financial crisis. Taking a loan in such a situation can be a viable option. Therefore, always check for the availability of the loan facility before you finalise the plan.

Typically, you should be able to draw a loan up to 50% of the surrender value of your plan.

5. Reputation of Insurer

Guaranteed savings plans are usually taken for an extended period, such as 15 to 20 years. Therefore, it’s crucial to consider the reputation of the insurance provider as well. Choose the insurance firm that has a good name in the market with a commendable performance history over a long time

Read more to know about How to Invest for your second innings with a guaranteed savings plan?

Guaranteed plans are a blessing for risk-averse investors who value wealth preservation above all. With proper strategy and the tips mentioned above, you can use such plans to your best advantage. Remember, patience and perseverance will be your best friends in your journey to meet all your financial goals through these plans.

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