What is a savings plan?

To effectively cope with any financial emergency or crisis, it is crucial to have a strong financial foundation in life. In such scenarios, saving plans act as a saviour and offer an excellent opportunity to have the necessary financial resources. Savings plans help individuals fulfil their short-term and long-term financial goals effectively.

Good savings plans are effective tools for wealth accumulation, alongside insurance coverage. Furthermore, they function as income plans, offering a minimum guaranteed maturity value or money-back options in the form of monthly or lump sum payouts, depending upon the different needs of individuals.

Additionally, in the unfortunate event of the insured's death during the policy term, insurance savings plan provides a death benefit to the designated beneficiary of the policy, offering financial protection and support to your loved ones in your absence. Saving plans help meet financial needs according to the individual's risk appetite and suitability and are considered low-risk financial instruments that offer good returns.

Explore our wide range of best money saving plans

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Pramerica Life
Guaranteed Return on Wealth
  • Guaranteed benefits throughout the policy term
  • Choice of four plan options as per need
  • Various income options available
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Pramerica Life
Smart Income
  • Guaranteed annual income equal to premium paying term
  • Choose from various Premium Payment Term and Policy term options
  • Avail loan against policy
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Pramerica Life
Smart Assure
  • Protection against unfortunate events to secure your family when you are not around
  • Maturity additions to augment the death/maturity benefit
  • Option to pay premium for limited or regular period
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...
Pramerica Life Magnum Assure
  • Guaranteed Monthly Income for duration equal to Payout period
  • Flexibility to avail loan against your Policy
  • Tax Benefits and the benefits received as per the prevailing tax laws
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Why do you need a savings plan?

Savings plays a critical role in everyone’s lives, irrespective of their income, standard of living and life stage. The savings approach and amount may vary. An appropriate saving plans can make a significant difference in your financial planning. Following are some of the reasons to start your saving.

1. Acts as your contingency plan
If you are saving in a planned and a disciplined manner, you are preparing a cushion for your difficult times. In case of contingencies or unfortunate events, savings can help you to overcome any kind of financial difficulty.

2. Offers secure future
You may have some goals in life that will be directly related to your financial health. If you are planning to purchase a big house or buy a car, it will depend upon the amount of money that you have presently along with your future savings. Additionally, substantial amount of savings can help you to pay for your child’s education and bright future. Hence, to fulfil your goals on time and indulge in a peaceful life, opt for a savings plan now.

3. Caters short-term goals
Savings can be viewed with the perspective of both, short term goals and long term goals. Not only in the long run, savings are beneficial in the short term as well. For instance, if you have a short term travel plan, saving for a few months can help you to fulfil your travel goals and make memories.

4. Offers peace of mind
Having a substantial amount of savings always offers peace of mind along with the strength to sail through tough times. Good savings accumulation is directly proportional to a stress-free life from a financial perspective.

Features of savings plans

Saving plans are designed in a manner that ensure financial security by offering guaranteed returns. However, the selection parameter may vary from individual to individual. For this, it is crucial to understand the features of a savings plan

Life Cover

Life Cover Saving plans offer a life coverage that is applicable for the entire duration of the policy. This ensures a death benefit or sum assured to the designated beneficiaries in case of policyholder's untimely demise.

Supplementary Income

Some saving plans are popularly known as monthly income plans as they offer maturity benefits in the form of regular payouts. Once the policy term is completed, these plans provide a steady income stream to the policyholder. These payments are periodic and are offered on a monthly basis. With this, the individuals have a regular income source to maintain their standard of living along with fulfilling their financial obligations.

In-Built Cover Options

When selecting your saving plans, you can choose for additional in-built covers which are commonly known as riders. This option helps the user to have extra coverage and benefits based on their individual needs and preferences. Some of the common riders include waiver of premium, critical illness rider, disability rider, and accidental death benefit rider. These additional riders offer customization and enhanced overall protection to the user.

Guaranteed Returns

Some of the saving plans offer guaranteed returns that are added to the maturity value making them predictable and safe.

Withdrawals Options and Boosters

Some of the saving plans offer multiple withdrawal options that can prove to be beneficial in case of contingencies. Along with flexibility, these plans help you in making partial withdrawals or take loan against the accumulated savings. The withdrawal option minimizes the option of surrendering the policy and facilitates in addressing emergencies or unexpected expenses in an effective way.

Tax Savings

Along with the above listed benefits, saving plans offer tax benefits as well. The investment made into saving schemes and plans is deductible under Section 80C of the Income Tax Act, 1961. Moreover, the money back and maturity amount are categorized under tax exemption. Some of the saving plans provide maturity benefits under Section 10(10D) of the Income Tax Act.

Retirement Benefit

An effective saving plan helps in building the right financial corpus for the policy holder even after the retirement. Once can have a large sum at the retirement by accumulating small amounts at regular intervals.

Types of savings plans in India

Generally, in India, life insurance companies offer three types of saving plans – ULIP, money back plans and endowment plans. However, every saving plan works in a different manner allowing you to select a plan as per your financial goal and risk appetite.

Endowment Plans

These savings plans help the policyholders to save regularly over a period. With a mix of life insurance and saving plans, these plans provide a lump-sum maturity amount to the policyholder upon surviving the policy term. Endowment plans are of two types—with profit and without profit. In the former plan, the insurance company pays a part of the profit earned from funds investment. In the latter plan, there are minimum chances of receiving higher returns are minimal, but the premiums are also lower when compared to with-profit plans.

Money back plans

In case of any kind of critical illness, term insurance offers several payouts. These critical illnesses may include kidney failure, brain, damage, and many more. There are several riders that are offered by this insurance plan and that can be added as per your financial requirement and goals. Before purchasing your term insurance plan, it is important to check if your plan protects you against terminal or critical illness.

Unit Linked Insurance Plans (ULIP)

ULIP is an insurance plan offers dual benefit of investment and a life cover. These benefits fulfil the long term goals and also provide financial protection in case of unfortunate events.

Monthly Income Plans

A monthly income plan provides a steady stream of income on a regular basis. It does so by the process of money accumulation. A fixed amount of money is invested over a specified period that grows over time. Once the plan matures, you receive a monthly income for a predetermined period of time.

National Savings Certificate (NSC)

National Savings Certificate is an investment cum savings plan that is designed to offer fixed returns to conservative investors. NSC involves initial short-term investment.

National Savings Scheme (NSS)

National savings schemes operate with an objective of helping individuals to build a substantial corpus in the long run. These schemes are backed centrally that makes them a safe option.

Public Provident Fund (PPF)

PPF is a long-term investment scheme helping individuals create a financial corpus for their retirement, with a lock-in period of 15 years.

Post Office Savings Scheme

Post Office Savings Schemes are government-backed saving plans, offering reasonable returns with capital protection, making them less risky compared to other options.

Senior Citizen Savings Scheme (SCSS)

SCSS provides regular income to senior citizens and is indifferent to market fluctuations. Anyone can invest in this scheme, including individuals above the age of 55 years, provided they have retired on superannuation or opted for Voluntary Retirement Scheme.

Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Yojana, launched by the Government of India, aims to support the education and other relevant expenses of girl children.

Atal Pension Yojana

Atal Pension Yojana is designed to cater to the retirement phase of individuals, reducing financial burden by encouraging early savings. The pension amount is directly proportional to the monthly contributions made in the scheme.

Employee Provident Fund (EPF)

Under the Employee Provident Fund scheme, both the employer and employee contribute 12% of the employee's basic salary and dearness allowance towards the EPF.

National Pension System (NPS)

In the National Pension System, subscribers can contribute any amount per year with no minimum contribution limit.

Kisan Vikas Patra

Kisan Vikas Patra aims to encourage people to mobilize savings and make long-term investments while instilling the habit of formulating effective saving plans in the long run.

Why should you buy a savings plan?

As soon as you start earning, it is advisable to buy an effective savings plan. The earlier the better. With early investments, you get a longer period for your investments. Ultimately, these longer financial investments help in building a substantial financial corpus at the time of the need.

  • 1
    Power of compounding

    Be a smart investor and make wise decisions. To start your investment at an early age, it is advisable to purchase a saving plan early to harness the power of compounding. In simple terms, compounding refers to a process of enabling your invested money to grow over time. The longer the money stays invested, the greater is the potential to build the financial corpus. Hence, starting your journey at an early age helps the user to take advantage of the compounding effect. This further increases the savings growth over the long term.

  • 2
    Beats inflation

    Saving Plans are an effective tool that help in combating inflation as they help in investing your money strategically. For instance, ULIPs allow the policyholders for a diversified funds allocation leading to risk mitigation. Moreover, the market-linked returns facilitate in building a substantial corpus, offsetting the impact of market fluctuations over time. By leveraging the benefits of saving plans, the individuals can work on achieving their financial goals.

  • 3
    To inculcate the habit of saving

    Savings plans are considered to be an important tool for inculcating the habit of savings in an individual. Gradually, it helps in building a systematic savings approach. Saving plans solve the dual purpose of meeting unexpected expenses along with planning for a stress-free future and comfortable retirement.

How to choose the best saving plan in India?

One size does not fit all, and insurance products, especially saving plans, require customisation to meet the unique requirements of individuals. The definition of an ideal savings plan depends on the varied needs and objectives of individuals. Read more

someone may need a savings plan to meet their retirement goals, while another person may need it for their child's higher education. Based on these requirements, premiums, desired sum assured, and policy terms may also differ for each case. Always consider the following factors and make an informed decision when selecting your savings plan.

Financial Goals

For selecting any kind of insurance products, knowing your financial status and goals is a pre-requisite. Once you have a clear picture, analyse your short-term and long-term goals as they define your investment in your saving plans. As per your financial goals, decide your overall fund size required to fulfil your goals.

Policy Tenure

Another important factor to consider is the policy tenure. For example, to fulfil your short term goals, the policy tenure may range from 5-10 years whereas, for a long term goal, the policy may have a longer tenure. To have clear picture of your future expenses, ensure to assess your future goals in an accurate manner.

In-Built Covers

With additional in-built covers available, select the appropriate ones and achieve your milestones successfully. These riders may vary depending upon your situation. For instance, for securing your child’ future, you may have to select different riders in comparison to the ones selected for sending your child abroad for higher education. It is advisable to carefully assess your needs and make an informed decision.

Risk Appetite

Analyse your risk appetite and opt for the most suitable savings plan. Carefully understand your financial needs and check with the level of risk that you are willing to take. With the right payout option and careful assessment of your risk, you may choose the right savings plan for you.

Compare Saving Plans

Before finalizing a saving plan for you, always make an effective comparison between different plans and premiums available in the market. For better assistance, you can make use of a savings calculator. Along with this, compare the relevant features and benefits that are available with different plans.

What Factors Affect the Premium of a Savings Insurance Plan?

1. Age
Age is a crucial factor that that determines your premium amount on your policy. Irrespective of the type of insurance, you need to pay the mortality premium. Starting early with your savings plan makes you pay lower premium as there is lower mortality chance. But with increasing age, the mortality chances also increase, thereby increasing the premium simultaneously. As per the natural tendency, an older person is prone to critical illnesses as compared to a younger person.
2. Policy Term and Sum Assured
The policy term is directly proportional to the premium. If you opt for a longer policy term, you need to pay a higher premium. This is due to the higher chances of insurance claims. If you are planning to make premium payments till your retirement and get the desired sum assured to fulfil your life needs, you can go with the option of a regular income plan. Along with this, you may look for the money-back plans that pay instalments at regular intervals.
3. Medical History and Lifestyle Habits
Your premium is dependent on your medical history and diseases that run in your family. The policy premium increases on potential illnesses. It is advisable to be transparent about your medicalcondition to avoid any rejection or miscommunication. Along with medical history, your lifestyle habits have a great impact on the amount of premium that you pay. For instance, smoking is connected to respiratory illnesses, while heavy drinking may cause heart and liver ailments. In both the cases, life expectancy is expected to reduce. Hence, due to a higher mortality rate, there may be a higher premium related to your policy.
4. Occupation
Some occupations may have a direct impact on your premium amount. People involved in risky or menial jobs such as a health worker or a fire fighter may have to pay higher premiums. To get enough coverage, be transparent about your profession. Being clear about your job helps you get the right coverage to protect your and your loved ones.
5. Riders
Riders are an additional benefit that re related to your policy. If you opt for riders such as accidental death benefit with your savings plan, you have to pay an additional amount that may vary your premium. Hence, choose your riders carefully as it can lead to a higher premium amount overall.

Why should you choose saving plans by Pramerica Life Insurance?

Choice of premium payment and policy term

With our diverse plans, you can choose different combinations of policy term and premium. We offer wide range of products that can be customized as per the different needs and preferences of the customers.

Tax Benefits

We offer different saving plans that often come with attractive tax benefits. These benefits may vary depending upon the local tax regulations.

Transparent and Fair Practices

We at Pramerica Life Insurance, follow fair and transparent practices that helps our customers to make an informed decision. We strive to ensure that the customers are provided with clear and prompt information that promotes trust and transparency.

A knowledgeable you is an informed you

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Why choose Pramerica Life insurance?

99.18% Claim Settlement Ratio

Individual Death Claim Paid Ratio as per audited financials for FY 2024-25

134 Branches PAN India

As reported on Mar 2025

Over 5.2 Million Lives Secured

As on September 2023

Disclaimers:
*For FY’22-23 Individual death claims settled and reported in public disclosures for FY 2022-2023
^ As on 31st September 2023