Surviving a financial upheaval, similar to the one brought on by the current pandemic, is a marathon and not a sprint. Hence, it is crucial to own the right savings plan. Now is also the right time to identify all the assets and liabilities that you hold and try to reduce your spending as much as possible and push your saving capabilities to the maximum.
You can understand how owning the best saving scheme as per your financial needs can assist you in safely sailing through the current economic crisis caused by the pandemic.
What is a Savings Plan?
In insurance terminology, a savings plan is a type of insurance which provides you with dual benefits of life coverage as well as savings. Just like generic term insurance with money back policy, a savings plan also requires you to pay a premium, in return for which you either get a guaranteed return or a regular income, based on the type of Savings Plan that you choose.
One can also call a savings plan a smart life insurance plan which allows individuals to cover their life and also invest in a systematic and disciplined manner so that they can achieve short-term and long-term financial goals in a hassle-free manner.
Why are Savings Plans Important Now More Than Ever?
In a recent survey conducted across 4000 adults, 73% claimed that the recent pandemic has made them realise the importance of having a robust savings plan. Many individuals are now helplessly diving into their emergency funds, just to meet their day-to-day requirements.
With the loss of jobs or income on the rise across the globe, it is of importance to own a savings plan that can offer you a regular income. Similarly, any other major event in your life, such as funding your children’s education or marriage would also require funds, which can be obtained if you own a savings plan.
Benefits of Having a Saving Plan during Crisis
- Helps in Emergencies
Emergencies are unexpected. When an emergency occurs, the funds which we require are not planned in our regular budget. This is when a savings plan can help by providing you with the necessary funds during contingencies.
- Cushion against Sudden Job Loss
With the rise in loss of jobs and pay cuts, many individuals are facing financial hardships across the globe. A savings plan can be a great way to cushion this sudden break in the flow of income by either providing returns or a regular income.
- Limits Debts
People who were in debt during the onset of the pandemic have been worst hit. It is advisable to be debt-free and not take loans unless absolutely necessary at this point in time. However, if you are liable to make payments towards debts and loans, it would assist you greatly if you own a Savings Plan.
- Helps to Finance Life Events
Even after you try your best to cut down your expenses, you may have certain commitments to fulfil (such as the education of your children or their marriage). In such times, a savings plan can work as an endowment life insurance for you by providing a lump sum amount (also known as guaranteed return plan) and help you to fulfil your financial obligations.
- Financial Freedom
If you have recently retired and are in your twilight years, a savings plan can provide regular income to you. This way, you need not be dependent on the primary earning member of your family. Instead, you can support your expenses and live a financially independent life.
It is quite evident that those who exercise discipline on their spendings and invest in smart saving plans are less likely to suffer a financial crisis. The pandemic has amplified the necessity for savings and owning a vigorous savings plan is the need of the hour.