You might have your friend rave about this new Guaranteed Savings Plan he/she has taken. Maybe your bank advised you to get the plan after you discussed your future financial goals. Regardless of why you thought of investing in a Guaranteed Savings Plan, the first thing you need to do is to understand how the plan works. So, here you go!
What does a Guaranteed Savings Plan mean?
A Guaranteed Savings Plan is a type of savings cum life insurance plan that gives you the twin benefits of assured returns and a life cover. It comes with maturity benefits, i.e., you will get a lump sum when the policy’s tenure ends. Also, it comes with death benefits, i.e., your beneficiary will receive the sum assured in case of your untimely demise. Read on to know how a Guaranteed Savings Plan works before you invest in Kotak Guaranteed Savings Plan.
How does a Guaranteed Savings Plan work?
As mentioned before, a Guaranteed Savings Plan is basically a combination of an insurance and savings plan. You can pay the premiums for a certain number of years or decide on the frequency of making the payments according to your financial situation. A fixed interest rate is added to your investment every year during the policy term.
You get the benefits once the plan matures. This time duration for the plan can also be decided by you.
Once you invest in Kotak Guaranteed Savings Plan and the policy matures as per the timeline you have set, you get the following benefits:
- The sum assured
- The annual additions from the fixed interest rate
- The loyalty additions by the insurance company
As per Section 80C of the Income Tax Act, 1961, the premiums paid for a Guaranteed Savings Plan get tax exemption up to ₹1.5 lakh. The death benefits and maturity benefits under this plan also get tax deductions under Section 10 (10D).
In terms of the death benefit, the nominee of the policy gets the returns that are calculated according to the total number of premiums that the policyholder paid. The age range to purchase the policy is set at 3 years to 60 years.
The advantages of getting a Guaranteed Savings Plan
Since you already know what the plan is all about and how it works, let’s give you a brief overview of its benefits.
- First, the plan comes with some major tax benefits that will help you save money.
- Secondly, there are assured maturity and death benefits.
- Additionally, there are yearly interest additions and loyalty additions.
Hopefully, you have a clearer idea now about how the plan works and in what ways it can be beneficial to you. It is time to go ahead and fill up that application form for a Guaranteed Savings Plan.
Click here to know more about Kotak Guaranteed Savings Plan: https://www.kotaklife.com/online-plans/savings-plan
