While there is no right age to purchase a savings plan, experts believe that the earlier you get, the better it is for you. However, there are instances where not everyone can buy an online money-saving plan as soon as they start earning.
In fact, there are numerous benefits you can reap if you buy a savings plan at any point in your life – the 20s, 30s and 40s. Here are a few benefits highlighted to help you understand better:
In Your 20s
Many financial advisors recommend getting an online savings plan early in your career because of two primary reasons – a long investment term and decreased premium fee. However, premiums are dependent on numerous factors, and age is one of them. Moreover, it is an assumption that when you are young, there is less probability of having an illness, which is another factor for higher premiums.
Moreover, when you are this young, you have a lot of life left for you ahead. It means when you buy a savings plan online with a life cover component at a young age, more interest will be accumulated till your retirement age while also having life insurance during the whole period.
Besides the wealth creation and lower premiums, this plan also helps young earning individuals save taxes. You can get a tax deduction up to 1.5 lacs under 80C of the Income Tax Act, 1961, with this plan. However, you need to compare these premiums and other features of the plan before buying one. Many insurance providers claim to have the best saving plan in India, but in reality, it is best only for some sections of people and not others.
In Your 30s
Well, not everyone may have such an income that one can afford a savings plan in their 20s. But that is not the end of the road. There are various savings plans that are designed so that people in their 30s can also benefit a lot from it.
It’s true that the premium may have risen a bit, but so is the case with your salary. Therefore, it has also increased during this period. Moreover, many people are not sure about their financial goals in their 20s. But, as they are in their 30s, they are sure about what they want to achieve in life. Therefore, buying a savings plan during your 30s can provide you with a clear vision of your financial requirements.
There is also a high probability that you will be married in your 30s and also may have children. So, in this phase of life, you will know how much to invest in your child’s education and what amount you should save for your retirement. Some plans also offer you an option to get a loan on the policy to meet your immediate financial goals.
In Your 40s
When it comes to buying a savings plan, it’s better late than never. Your premiums may be higher when you get a plan in your 40s, but still better than not having one. However, in your 40s, you have to be careful about the eligibility age. You may have found the best saving plan in India, but if you do not have the eligibility, there is no point in moving ahead with it.
In your 40s, you are usually sure how much risk you want to take with your savings plan. So, this is one area where buying savings in your 40s will help you. Some of the best saving plans also have high-risk factors in them. However, not necessarily all plans have risks attached to them. Some plans also come with guaranteed savings that have very minimal risk.
Moreover, if you are married and want to cover your wife, some plans provide you with this option. For example, Tata AIA life insurance has the option of joint life insurance under some of their savings plans.
A savings plan is a great addition to your financial portfolio. However, before buying a plan, you should not only check the policy but also the policy provider. Moreover, if your savings plan has a life cover component, you should also check the company’s claim settlement ratio, besides its credibility in the market.