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Financial Planning with Life Insurance

Financial Planning with Life

Insurance
Knowledge Centre Team June 24, 2021
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Financial planning is the process of establishing a

foundation for financial policies, investments, and

administration of funds so that you can keep a track

of your finances. A financial plan is very important

for any individual. It helps you make your financial

condition better, plan long-term financial goals, and

use the necessary tactics to achieve those goals. The

list of reasons you need a financial plan is

endless. A financial plan can be prepared on your

own or with the assistance of a financial planner. But

why is financial planning so important? Let's find

out!

Importance of Financial Planning

Financial planning helps you determine the amount

of income that you are receiving and the number of

expenses that it is going into. It mainly allows you to

control the flow of money to achieve your long-term

goals and e!ectively use the available resources.

Apart from that, financial planning also helps you

determine your short-term goals. It serves as a

bridge between your short-term and long-term

goals to make the best out of it by balancing them

both.

4 Benefits of Financial Planning

Financial planning is a roadmap for your wealth, the

strategies you have to accomplish your financial

goals. This comprehensive picture of your finances

helps you stay aligned on your path to achieve all

the milestones that you have set for yourself.

1. Increased savings

A financial plan will allow you to get insights and

understand how much money is being saved and

how to save it better. It increases one's savings as

you know exactly how much money is going into

what. A financial plan can help analyze cash flow

easier than any other method.

2. Better living

A financial plan helps you prioritize your

investments and expenditures. Prioritizing these

expenses and understanding how to balance them

can help you with having a better life in the future. A

person who does not have a financial plan can end

up in situations where he is clueless about

balancing his income and expenses. Do not confuse

investment portfolio management with financial

planning.

Learn the di!erence between portfolio

management and financial planning.

3. Emergency preparedness

Emergencies come with no hints. A financial plan

can help you deal with emergencies. An emergency

fund can be created of at least money amounting to

at least a salary of 6 months. An emergency fund

can help you through unexpected situations.

4. Peace of mind

A financial plan automatically gives you peace of

mind. With the right plan, you can manage your

monthly expenses, make investments for future

goals, and use your money e"ciently. All these

factors can let you stay calm at all times.

Planning your Finances with the

Best Life Insurance Plan

By now you must have understood what role does

financial planning play in our lives. Buying the best

life insurance plan provides you financial security

along with protection, wealth creation and

investment avenues. Let us understand how a life

insurance plan is an important element of your

financial planning.

1. Retirement planning

Retirement may be far away, but there is no harm in

planning for it now. A retirement plan can help you

avoid any financial uncertainties in the future. A

good retirement plan can be helpful to make better

decisions in the present.

A retirement plan can also allow you to make proper

investments. It allows you to balance your present

and future decisions. Buy the best retirement plan

that o!ers you to grow your wealth along with

providing you with a life cover to stay protected.

Canara HSBC Life Insurance Guaranteed

Income4Life plan provides guaranteed income that

will help you meet your post-retirement expenses.

Learn how Guaranteed Income4Life acts as a

financial safety net.

2. Child's education

A financial plan can help you determine all the

expenses that your child might need. It will help you

to better organize your expenditures, savings, and

investments. Education costs have hiked over the

past few years and will continue to do so. Investing

in the right child insurance plan will help you build a

significant corpus that you can use for your child’s

higher education.

A financial plan can help you avoid tough situations

in the future. Planning your child's education early

can help overcome these situations.

3. Taxation

A lot of tax is probably being deducted from your

salary. The Income Tax Department of India

provides various tax exemption schemes to help

reduce these taxes. Life insurance plans can save

your salary from income tax. The death benefits that

a nominee receives when the policyholder passes

away are tax exempted. Also, the premiums that

you pay for your life insurance plan are tax-free.

Also Read : Income Tax Slab

5 Tips for a Successful Financial

Plan

Only having a financial plan will not help you reach

your goals. Tracking your goals and staying on the

right path is equally important. Here are 5 super tips

to help you devise a successful financial plan:

1. Asses your current financial situation

The first step in creating the best financial plan is

determining your current financial situation.

Analyze the factors such as income, expenses, debt,

and investments. These can help you determine

what to do next.

2. Set up your financial goals

Financial goals play an important role in

determining and di!erentiating between short-term

and long-term goals. Every goal is equally

important. Make this task easier by writing them

down on a piece of paper, so you don't miss out on

any.

3. Choose the best investment plans

A financial plan can allow you to make better

investments. When you understand your cash flow,

it becomes easier to segregate the right amount of

expenses for investments that can help you reach

your goals. Good investments can serve as assets in

the future. Equity funds such as retirement plans

and a child's education are some of the best options

to be considered.

4. Pick the right life insurance plan

The right life insurance plan that best suits your

goals and expectations is crucial. Pick the best

option amongst the available ones. Consider all the

necessary factors such as age, investments, goals,

and risks. A financial planner can help your estimate

and analyze the right life insurance plan for you.

Apart from that, they can also guide you through

retirement plans, taxes, insurances, and a lot more.

Find out the best life insurance plans for senior

citizens.

5. Monitoring

Staying committed to a plan you've made is the

most important thing. A financial plan should be

monitored and reviewed after it has been made.

Constantly monitoring the performance of your

funds, investments, and other assets is highly

crucial. Determination to follow your plan is the key

to achieving all your goals.

A financial plan is crucial for every human being. It

helps you understand the importance of cash flow

in terms of investments, income, and expenses.

Creating the best financial plan is equally important,

and this can either be achieved by doing it by

yourself or taking advice from a financial planner.

A financial advisor is a professional in guiding

people through it all. They also suggest the best

options and help you determine what's right. They

are highly skilled and are good at analyzing cash

flows and goals.

Tags

Life Insurance Term Insurance

ULIP Tax Saving

Health Insurance Child Insurance

Retirement Tax University

Saving Plan Guaranteed Savings Plan

Guaranteed Income4Life Plan

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www.irdai.gov.in WEBNJV3CHODEC17 ENG | CIN:
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Trade Logo of Canara HSBC Life Insurance Company

Limited (formerly known as Canara HSBC Oriental
Bank of Commerce Life Insurance Company Ltd)
hereinafter referred to as "Insurer" is used under
license with Canara Bank and HSBC Group
Management Services Limited.

1. The monthly survival benefit mentioned is an

example of Life Assured opting for Sum Assured as
1Cr under Life Secure with Income plan option.
Under this plan option, a Monthly Survival Income
shall be payable at the beginning of each month,
starting from the Policy Anniversary coinciding with
or following the Life Assured attaining age 60 years
(last birthday) which shall continue till the end of the
Policy Term or the death of the Life Assured
whichever is earlier. In case of death of the Life
Assured during the Policy Term, Sum Assured on
Death basis the Coverage option opted, less
cumulative monthly income(s) already paid shall be
payable. The Policy will terminate after payment of
this benefit.

2. Benefits are guaranteed provided the policy is in

force and all premiums are paid as and when due.

3.The maturity benefit calculated for a 25 years old

healthy male who has opted for Canara HSBC Life
Insurance Guaranteed Savings Plan with
Guaranteed Savings Option through insurer’s
website, annual premium Rs. 2,10,000, (excluding
taxes) premium payment term 10 years and policy
term 20 years. The maturity benefit is Rs. 51,84,468
which includes Guaranteed Sum Assured on
Maturity, accrued Guaranteed Yearly Additions and
Guaranteed Loyalty Addition. T&C apply.

4.Tax benefit of Rs. 46,800/- is calculated at the

highest tax slab of 31.2%(including 4% cess) for an
individual assessee on life insurance premium of Rs.
1.5 lacs under Income Tax Act, 1961 and tax benefit
may vary from assessee to assessee. Tax
benefits/savings are subject to provisions under
section 80 C, 80 CCC, 80 D, 10(10A), 10(10D) and
other sections of the Income Tax Act, 1961. The
provisions of Income Tax Act, 1961 are subject to
amendments made by the government from time to
time. Goods & Services Tax will be charged on the
premium amount. Please consult your independent
tax advisor for details.

5. The maturity benefit is calculated for a 25 years

old healthy male life who has opted for Canara
HSBC Life Insurance iSelect Guaranteed Future Plus
with Endowment Option, monthly premium Rs.
10,000 (excluding taxes), premium payment term 10
years and policy term 20 years through online sales
channel. The maturity benefit in form of a lumpsum
benefit equal to Rs.34,24,444 is paid at the end of
the 20th year, provided the policy is in-force and all
due premiums have been paid. T&C Apply.

6. The premium of ₹939 mentioned is exclusive of

goods and service tax and is an example for a
healthy 25-year-old male, non-smoker, covered for
₹2 crore under plan option ‘Life Secure’ with
monthly mode of payment and coverage option as
‘level’. The policy term and premium payment term
considered is 10 years. Actual premium rates may
vary and will depend on the plan/coverage opted
and company's assessment of risk on insured's
health, lifestyle, occupation etc. Refer Sales
Brochure for further details

7. The above scenario has been calculated for a 52

year old individual who has opted for Canara HSBC
Life Insurance Guaranteed Assured INcome - Long
Term Income plan option and has chosen Premium
Payment Term - 12 years, Deferment Period - 5
years, Income payout period - 30 years, income will
commence at the end of 18th year till the end of
47th year and Policy Term - 47 years, Income Payout
Frequency - Annual and an Annualized premium of
Rs. 5 lacs. Guaranteed Income displayed above is
the sum of Assured Income installment + Loyalty
Income installment. The above benefits will be
applicable, provided the policy is in-force till the end
of the Policy Term. For details on benefits and terms
and conditions applicable under the product, please
refer the sales literature.
^Individual death claims settled and reported in
public disclosures for FY 2022-23.

For more details on risk factors, terms and

conditions please read the Sales Brochure carefully
before concluding a sale.

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