08:33 31 May 2014
Most of the insurance policies we have today are also major savings plans. Consider life insurance for example, after a specified time or after death, an endowment of a huge lump sum of money is provided.
Insurance as a savings plan:
It is possible for you to kill two birds with one stone when it comes to taking a cover for your life and also saving for future plans. With a life insurance policy you can be covering for your life as well as saving money.
You can get a policy for a specified time, for example 10 years and after the end of this period, you will receive all of your money plus interests. Savings, insurance policy can be obtained from most life insurance providers. The savings can also be handed to your beneficiaries after death either as a predetermined sum agreed upon in case of death or an agreed amount upon maturity. On maturity the amount to be paid is the assured money plus annual interests as well as bonuses that you have earned during the entire lifetime of the policy.
Using insurance as a way of saving can be a very effective plan since you will never get the chance to withdraw cash as it is the case with bank accounts. You can achieve your financial goals by using this method since you are not the one actually making deposits which at times you might neglect, but the money is deducted straight from your salary every month.
It’s a very effective method of ensuring you never fail to save. Furthermore, you will be offering protection as well as saving at the same time. Since the main deal here is insurance, you will be providing coverage and protection to your beneficiaries in case of early and unexpected death.
They will benefit from the life insurance policy you had invested in. However, if the time agreed upon expires without you dying, you will be provided all the money you had assured and all the benefits it has acquired during that period, being a very effective savings plan.