Should You Buy Savings Plan Early in Life?
We all know savings are essential. It helps you have a sufficient financial cushion to get through an emergency. While savings are significant, saving in an organised manner is equally critical. You must let your savings grow with time instead of just parking the amount in a bank account. This is why it is vital to start saving from an early age so that you have a longer time to let your money grow and accumulate a larger corpus. One of the best ways to start saving for our future goals is to purchase a savings plan.
A savings plan, which is also commonly referred to as an endowment plan, is a kind of life insurance policy that offers dual benefits of insurance and savings. The insurance aspect provides you with a life cover and protects your family’s financial future. If something happens to you during the policy term, your family members will receive the death benefits. But, if you survive the policy tenure, you get the maturity proceeds, which include loyalty additions, bonuses, etc.
Why should you start saving early in life?
A savings plan is a long-term financial instrument. You must pay the premium for about 20-30 years; the sooner you purchase the policy, the better. This will give you enough time to accumulate the desired corpus for achieving your long-term goals.
You can tie your savings to one or multiple goals, such as buying a home, building a retirement corpus, accumulating money for a child’s education or marriage, etc. Are you wondering if there is a suitable age to start saving or buy an assuring savings plan? The answer is simple – there is no right time; anytime is a good time. But generally, investment experts recommend purchasing a savings plan in your 20s when you start your career. It has many benefits.
First and foremost, when you buy an assured savings plan in your 20s, you can get high coverage at an affordable premium. Also, you can afford to buy a policy with a longer investment tenure.
• Generally, insurance companies offer insurance to youngsters at a lower premium because the risk of mortality is lower. Also, you can lock in the premium for the entire policy duration.
• Also, when you buy an assured savings plan, you continue to invest and contribute towards your long-term goal. This also means you ensure your family is well protected against future uncertainties if something happens to you.
• Another significant benefit of buying an assured savings plan at an early age is that you get tax benefits for a more extended period, and you can enjoy valuable savings on the taxes you pay every year. The premium for the assured savings plan is eligible for tax deductions up to 
1.5 lakhs in a financial year under Section 80C of the Indian Income Tax Act.
While it is desirable to buy an assured savings plan early in your 20s, if you cannot buy the policy when you are young, you can still purchase it in your 30s or even in your 40s.
Final Word
Thus, it is evident that buying a savings plan has many benefits. However, make sure that you check the insurer’s eligibility criteria and other terms and conditions of the policy before you proceed with buying the policy.
