Savings Plan Eligibility Conditions You Need to Meet to Purchase a Savings Plan
A savings insurance plan is an important component in your financial plan to accomplish your financial goals while securing your family's future in your absence. It is fair to invest early and maximise the returns and benefits optimally. But are you aware of the eligibility conditions? Here is a detail that will help you understand that in a little detail.
Before we step into the details, let us understand what a savings insurance policy means.
What is a Savings Insurance Plan?
A savings insurance plan is a comprehensive life insurance plan that provides a life cover and the opportunity to save a portion of your income for your future financial commitments. It is a guaranteed income that you decide during policy inception.
In addition, it provides flexible premium payment and payout options. For example, the premium payment can be made as a single lump-sum, regular or limited-term payment. And, you can receive the payout as a lump sum on maturity or regular income for a preferred income period starting from maturity.
Eligibility Conditions for Investing in a Savings Policy
Life insurance eligibility conditions are based on the age at entry and the age at maturity predominantly.
- Age at entry - The entry age refers to the minimum age to purchase a savings insurance plan. The age at entry can be anywhere between 0 yr and 60 years based on the individual insurance provider's product options and their terms and conditions.
- Age at maturity - The maturity age refers to the age at which the plan terminates, and you become eligible to receive the proceeds from the savings plan. The age at maturity for a savings insurance plan ranges between 18 years and 77 years.
Insurers like Tata AIA provide Tata AIA savings plan with an in-built critical illness benefit. The age of maturity of the plan is between 23 and 70 years.
The age of maturity differs from insurer to insurer. So, check the policy carefully to know the maturity date.
- Premium payment term and policy term - Premium payment term refers to the period you make the premium payment for your savings insurance plan. Policy term refers to the duration of the savings plan for which you will be entitled to the benefits.
There are three different types of premium payment terms.
- Single payment - Make a single lump-sum premium payment.
- Regular payment - Make regular premium payment for the entire policy duration.
- Limited premium payment - Make the premium payment for a limited term while enjoying the benefits for the defined policy duration.
The eligibility criterion for the premium payment term and the corresponding policy term will be based on the insurer’s terms and conditions. Here is an example to help you understand better.
| Premium payment option | Policy term |
| Single premium payment | 5 years |
| Regular premium payment(5 to 10 years) | Same as the premium payment term |
| Limited premium payment term (5 years) | Between 6 and 15 years |
Conclusion
Life insurance eligibility questions are important to consider when purchasing savings plans in India. It will help you define your financial goals better and purchase them at the right age to derive maximum protection and savings benefits. Ensure to be aware of the age at maturity and the premium payment and policy terms to customise the plan for your personal financial needs. Then, purchase and stay invested and fulfil your money goals as desired!
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