Insurance Plans That Offer Both Savings and Protection


While getting an insurance cover is wise as it helps manage any unknown risks such as sudden illness, combining it with a savings plan is without question more prudent. This is because it offers you protection, provides security for your loved ones ensuring they will be okay in your absence and generates wealth. In simple terms, a protection and savings insurance plan is just your regular savings plan only this time. It comes with an added advantage; a life cover. Therefore, you get to enjoy the benefits of a life insurance policy, including the death benefit, and at the same time, become financially stable as most companies curate a stream of income for you during your policy term. Think of it as an investment. 

How Protection and Savings Insurance Policies Work

There are several types of such policies. These include unit-linked, endowment, money back, and retirement policies. When you buy a protection and savings plan, part of your monthly premium is directed to your life insurance, while some of it goes into your savings scheme. The latter is then invested into various investment portfolios that the insurance provider deems worthy on a profit basis. Property, shares, and bonds are common investment choices. Alternatively, you can decide where you want your money invested on a unit-linked basis. Do note that you will be responsible in case you choose the latter, and losses are suffered. 

Benefits Of Protection and Savings Plans

Protection and Saving Insurance Policies have several advantages over life insurance policies. 

For starters, they are less risky than regular life insurance policies. Why? Simple. In ordinary life insurance covers, if you happen to survive a predetermined term, say ten years on a 10-year term life insurance, you do not get any money back. With a savings and protection plan, however, your money earns interest, and you get a minimum stipulated amount at the end of the policy’s contract term. This amount is referred to as the maturity benefit, and it is guaranteed. 

Secondly, protection and savings insurance policies generate wealth. This is because a portion of the money you pay as premium is used to invest in various portfolios, creating you a steady stream of income that will ensure you stay financially secure at whatever stage of life you are. Additionally, with money back protection and saving plans, you can enjoy regular payouts while you are still paying your premium. Of course, all the benefits of life insurance coverage also apply. Your family will be able to stay afloat even after your demise. The money could also be used to offset significant debts. 

Charges Involved With Protection and Savings Plans

Apart from the premium, which is often paid in instalments, you will need to pay an administration fee to your insurance provider. Whenever you get bonuses, the insurer deducts some fees. You will also be charged if you decide to switch from one investment method to another. Lastly, there are exit charges if you, for some reason, terminate the contract before term.

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