Limited Premium Saving Plans Gaining Popularity

Limited premium policies have become one of the best selling products of the life insurance sector. With single premium plans fading out in the retail segment, limited premium plans have been able to help life insurers to sustain their growth in the non-single premium segment.

In limited premium plans, customers pay premium for a shorter span of time for a longer period of insurance cover.

These plans are very useful for those people who prefer to be relieved from the commitment of paying insurance premiums for a longer duration.

There has been significant growth in these plans, as most customers have a limited horizon for investment and require funds for specific needs such as increase in childrenâs school or tuition fees or any other financial requirement at regular intervals.

Insurance companies also enjoy higher persistency levels if the limited premium paying product is suitable to the long-term financial goals of the policyholder.

For the past few years, limited premium products have been able to gain significant market share in India. Although its market share was 5-10% in the initial phases, it has increased to 15-20% in the past few quarters.

The factor that single premium products have become unattractive due to lower tax benefits has also contributed to the popularity of limited premium products.

The last budget (2012-13) had proposed that a life insurance policy would be eligible for tax benefits only if the sum assured was at least ten times the annual premium. This, too, impacted single premium products, as the sum assured on death is less then ten times the single premium in these products.

While yield-to-maturity does not vary much between limited premium and single premium, the total premium paid towards a limited pay policy can be higher then that of a single premium policy, leading to a higher maturity value.

Also, with a limited premium plan, a customer can link his change in income to the premium payment and can plan relatively bigger saving plans and sum assured as compared with a single premium plan. Further, tax benefit is limited to one year. Riders, too, are generally unavailable under single premium plans. However, they can be purchased under regular or limited premium plans.

Non-single premium income of life insurers has seen an 8.1% rise for April-December 2012 period in the retail segment. The new business premium for non-single segment rose to Rs 30,169.57 crores from Rs 27,892.84 crores in the last financial year.

On the contrary, single premium is seeing a decline of 6.4%. Single premium for the individual segment fell to Rs 10,518.48 crores for the April-December 2012 period, compared to Rs 11,238.48 crores in the same period last financial year.

Source: https://www.policymantra.com/blog/limited-premium-plans-gaining-popularity/

Have you saved enough for your family?

Life is a beautiful journey that comes along with various important milestones you aspire to achieve for a happy and secured family life. These milestones could be your house, your child’s education and marriage, your retirement plans, business plans etc. However, with the growing inflation rates, improved lifestyle measures, high-end socializing and for getting best of the amenities just dreaming and saving some money in your piggy bank won’t work. For this you need a careful planning and a regular savings approach. A savings plan is a non–participating limited pay endowment assurance plan that allows you to enjoy the benefits of a long term savings plan ensuring that you and your family are free of any financial worries. Savings plan helps individuals secure financial protection and attain their financial goals. The suitability of savings plans vary from person to person, as it depends on factors like budget, age, income sources, needs and wants of an individual.

The article guides you through some of the savings plan that we all require at different stages of life. 

Emergency Savings Plans: This fund is much desperately needed when there are unexpected events, such as car and home appliance repairs and medical expenses etc. It is advisable since it is a small term goal you could use savings accounts to grow your emergency fund.  The good point is that it allows you to withdraw money quickly. One could set a maximum limit for emergency savings. When that limit is crossed, the excesses can be transferred to goal-oriented savings plan.

Retirement Plans: Retirement Plan is investment insurance plan which allows you to save systematically and build up the much needed lump sum to provide yourself a regular income after your retirement. A person pays fixed amount, known as the premium, to the insurance company, over a pre-determined period of time, known as the term of the policy. The premium will be invested by the insurance company in various instruments to earn returns and build a corpus over the term of the policy. The amount paid as premium is also eligible for tax benefits.  

Goal-Oriented Savings Plans: These savings plan are aimed at generating funds for meeting a specific goal, such as the purchase of a car, a house, going for a holiday etc.  Such plans typically involve savings funds in financial instruments such as equities, debt and mutual funds that yield high returns.

Child Savings Plans: As the name suggest it is for the better future of your child. In this highly unpredictable  world it is extremely important that you keep no stone unturned for secured future of your child right from the day he or she arrives. You can opt for growth oriented child plans which are tax free products built for child safety and secured future aspect.

Short-term saving plans usually meet your needs which arrive in a span of one to two years while you work, run a business or earn in any form. These could be setting up a savings account, Certificates of Deposit, Money Market Deposit Accounts, Government Tax-Saving Bonds etc.

However, when you wish to achieve your long-term goals especially thinking about the day your earning machine comes to halt or you perish from this world then the only solution lies is guaranteed Best savings plan. This savings plan enables you to save money for the long term, while receiving the benefits of a life insurance. The assured sum is paid out in addition to bonuses accrued over the years, as a lump sum either when the plan matures or in the event of the death of the insured person.

Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana differences

Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana are social security schemes launched for the common man of India. Both these schemes are insurance scheme. Many people get confused between these insurance schemes as both schemes are more or less similar. So, what is the difference between Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima yojana (PMJJBY)? Why two schemes are required? Let’s try to figure out the differences and similarities between these schemes.

What is Pradhan Mantri Suraksha Bima Yojana?

Pradhan Mantri Suraksha Bima Yojana is accidental death insurance scheme.

Pradhan Mantri Suraksha Bima Yojana is available to the people in the age group from 18 years to 70 years.

Bank account linked to Aadhar Card is mandatory for this insurance scheme.

The Premium of this scheme is 12 Rs/- per year.

Pradhan Mantri Suraksha Bima Yojana provides accidental death risk cover of 2 Lac.

Default term of this insurance scheme is 1 year which can be extended year on year.

What is Pradhan Mantri Jeevan Jyoti Bima Yojana?

Pradhan Mantri Jeevan Jyoti Bima Yojana is low-cost life insurance policy.

Pradhan Mantri Jeevan Jyoti Bima Yojana is available to the people in the age group from 18 years to 50 years.

The Premium of this scheme is 330 Rs/- per year.

Pradhan Mantri Jeevan Jyoti Bima Yojana provides insurance coverage of 2 Lac. 2 Lac will be paid to the nominee in case of natural or accidental death.

Risk coverage can continue up to 55 years.

Aadhar card is required in order subscribe to this scheme.

Premium paid under this scheme is eligible for tax deduction under 80C.

Difference between Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana

Pradhan Mantri Suraksha Bima Yojana

Similarities between Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana

Pradhan Mantri Suraksha Bima Yojana

Conclusion -

Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) are very Best Saving Plan insurance available for Indian. Total sum assured offered by these insurance schemes is not sufficient. You can purchase these policies, however, it is recommended to purchase additional term plan along with sufficient risk coverage.

Source : http://moneyexcel.com/12278/pradhan-mantri-suraksha-bima-yojana-jeevan-jyoti-bima-yojana    

A saving plan that suits you

The first step on the road to fabulous wealth is saving. But faced with inflation and escalating living costs, it can be difficult just to make ends meet, much less saving money. So, where should we start?

Work towards a goal

We need a concrete goal if we want to get anywhere, and the same is true for our savings. You could be aiming to save $50,000 within 2 years to tour around Europe, $100,000 within 5 years to cover the cost of your studies, or $150,000 before the age of 30 for your wedding banquet. Having a target and timeline to aim for allows you to calculate how much you need to set aside each month or year as you move ahead. Then it’s simply a matter of finding the best way to work towards that goal, including possibly enrolling in a saving deposit plan at the bank to achieve it.

Save before you spend

Most people live pay cheque to pay cheque, paying bills and making necessary purchases first and then worrying about saving any money that’s left. They often find that there simply is none, or even that they have to spend money saved from previous months to get by. But there is a budget hack that may help!

Try setting aside 10-30% of your monthly income as savings immediately, in a location relatively inaccessible to withdrawals like a bank deposit plan or investment product with low risks and steady returns. That way, when you go to pay bills and adjust your budget you will be working with a smaller sum already – saving money while also tightening your spending!

Compound interest – let your money work for you

Saving is hard when you work hard for every cent. That’s why you need to let your money work for you. The earlier you begin saving your money, the more powerful the effect of compounding is! Make the best of time deposit and savings insurance plans as early as you can! The money growth in your accounts can make budgeting much easier.

Explore income sources and reduce expenses

We only live once, so it’s important to seize the day. An overly strict Best savings plan, however, could limit our chances to see the world. What’s worse is very often when working with a rigid plan, the potential rebound could be going on spending sprees and quickly use up all their savings. In view of this, perhaps we could consider seeking more income sources, such as freelance jobs or online trading, to earn a little more outside the office.

When you draw up your savings plan, you should take into account the financial burden you can bear, and make sure you have enough cash for emergencies. Fresh graduates should also consider the fact that their parents could retire anytime, so they could soon become the bread winner for the whole family.

Source: http://blog.fwd.com.hk/en_US/2015/09/09/saving-plan-suits-you/