What Personal Things to Check before Choosing Plans?
Goals: Your monetary goals should determine what type of scheme you should buy. These goals may include marriage, buying a house or a car, providing for childrens education and marriage or building a corpus amount. In fact, even small term goals like foreign trips can be financed by ULIPs. If you are just starting out in your career or have a small family, then you can definitely opt for a best saving scheme such as a ULIP to fund your short-term goals. On the other hand, if you are in your 40s or even 50s, then endowment plans are better as best saving schemes in combination with ULIPs or other options like mutual fund. Your monetary goals will help determine what options are best.
Current Expenses vs. Savings: In order to meet the financial goals the amount an investor spends or saves has a larger role to play. With fewer saving and more expenses, it is unlikely that you can define large short-term goals that can be met by coverage plans. In such a scenario, if you live at home with your parents and have no major outgo like rent, and you are likely to save money every month then it is best to buy an adequate life cover with return benefits and get their two-in-one benefit.
Future Expenses vs. Savings: The amount you save for future will also determine what kind of scheme works as the best for you. If you have fewer expenses now because the children are young, you can plan for the major expenses that will come your way in a few years like the childrens college education or marriage. Therefore, you can choose an option that charges premium for a few years and then pays out enough that it can itself pay for any premium from the annuity or other regular benefits. Moreover, you investing a higher amount would now mean that a good profit plan will grow to a larger capital base in 20-30 years time when you need it for your monetary goals or basic expenses. Planning your expenses is a good way to filter the ones to invest on.
Major Expenses that may arise: These schemes are a smart way to get the cover you need and also grow your fund at the same time through the best saving schemes. The major expenses like buying a house or to meet the living expenses after you retire can be easily covered by ULIPs and even endowments. Also, you can plan for the major expenses that are certain to occur and take them into account while determining the best saving scheme. E.g., suppose your child is in primary school, then you know that within 8-10 years you will have to bear major expenses for their education. As such, it makes sense to invest a small ULIP that ensures you can meet this definite expense in a few years time.
Insurance Cover – Existing vs. Required: The insurance cover of the best saving scheme should be adequate to take care of you or your family in case you are unable to work anymore or in the unfortunate event of you being no more. The cover provided by the product should be able to pay for your own or your familys expenses in the years to come until your children can take care of you and your spouse in addition to themselves. To understand how much you need, make an estimate of your current and future expenses vis-a-vis what a scheme offers. If your cover is less than what is required, then opting for ULIPs or endowments as best saving schemes are a better way to ensure you increase your money while protecting yourself and your family at the same time.
Number of Dependents: The number of dependents should also determine the assured sum you need to invest in the best options. If you have only a wife and child as dependents then your needs would be lesser in comparison to when you may be taking care of your siblings, parents, parents-in-law, grandparents, nephews, nieces, etc. Your monetary insurance product should not only be able to cover for all the necessary expenses and also help you build a corpus for all your and your familys major goals. Also, the age of the younger dependents matter while choosing the best saving scheme. If you have teenage children, then it is likely you need a good plan to save up for their college education or marriage. ULIPs are better for such cases than endowment plans.