Maximizing Returns: Understanding the Savings Component of Early Cash Plan

In the realm of financial management, maximizing returns involves a strategic approach to investing, with a keen focus on optimizing financial gains.

Saving money for the future or unexpected situations is important as life becomes very uncertain. This blog will give clarity on how to maximize your returns with an Early Cash Plan and the key components of the plan.

What is an Early Cash Plan?

Shriram Life Insurance presents the Early Cash Plan, an individual savings life insurance plan that combines insurance coverage with savings benefits. It is a non-linked, participating policy that ensures guaranteed cash bonuses, set at a minimum of the sum assured, throughout the policy term, starting from the first anniversary.

The Shriram Life Early Cash Plan not only provides life insurance protection but also ensures minimum benefits upon maturity. It offers the flexibility to accumulate cash bonuses at compounding rates and more.

With this plan, you can save for the future and work towards important financial goals while receiving early cash income. Additionally, you can use the cash bonus to plan a holiday with your family, pay children’s school fees, or learn a new skill. The cash bonus will give you financial freedom, which you can use during emergencies.

The Early Cash Plan provides you with two flexible options, and you can choose from them according to your financial needs.

• Early Cash Option
• Super Growth Option

Early Cash Option

The Early Cash Option ensures a steady income throughout the policy duration, starting from the first anniversary, provided in the form of yearly cash bonuses. Furthermore, upon policy maturity, you receive a lump sum comprising the sum assured and a terminal bonus if declared.

In insurance, a terminal bonus is a one-time bonus paid to the policyholder upon completing the entire policy term or a specific period outlined by the insurer.

A minimum Cash Bonus of 3.5% of the sum assured is guaranteed. Any additional bonus, if declared, can be utilized for small indulgences that add joy to life.

As you reach significant life milestones involving substantial financial commitments, like your child's education or plans to buy your own house or wedding, the lump sum received at maturity, along with the terminal bonus, serves as a financial cushion to address growing expenses.

Super Growth Option

The Super Growth Option in the Early Cash Plan accumulates yearly Cash Bonuses announced from the first policy anniversary, compounding annually at the declared cash bonus rate. At maturity, it provides a lump sum comprising the sum assured, accumulated cash bonuses and any declared terminal bonus.

The guaranteed minimum cash bonus, set at 3.5% of the sum assured, is declared annually throughout the policy term. So, if you are planning for big events like marriage, children, or even a big trip, the Super Growth Option will be a better option as you will receive the sum assured and Cash Bonus if declared.

Why Choose Early Cash Plan to Maximizing Your Returns?

Emergency Fund

Think of the Early Cash Plan as your safety net. It comes in handy during unexpected financial emergencies, such as sudden hospital bills or the unfortunate passing of a family member. The cash is kept in easily accessible forms like savings accounts, acting as a financial cushion for unforeseen expenses.

Risk Tolerance

An individual’s risk tolerance will have a major impact on the type and the amount of insurance coverage they choose. However, Early Cash Plan helps you eliminate risk and ensures guaranteed returns. People choosing an Early Cash Plan need not have a higher risk tolerance as the insurance will protect the during unforeseen situations.

Diversification

To lower risk, distribute your investments among various types of assets. Diversifying helps lessen the impact if one investment doesn't do well. That is why the Early Cash Plan is an ideal strategy for maximizing returns with minimal or no risk.

Tax-Efficient Strategies

When planning your investments, take into account the tax implications. Opt for a tax-efficient option like the Early Cash Plan, which helps you save on taxes and offers higher returns.

Compounding

Start investing early to take advantage of the compounding effect. Life insurance premiums are lower when obtained at a younger age. The Early Cash Plan presents two options for you to consider: The Early Cash Option, which offers a cash bonus at the end of each policy year along with the guaranteed lump sum, and the Super Growth Option, which provides the sum assured and accumulated cash bonus at the policy term's end.

Life Insurance Savings Plan Calculator

The Life Insurance Savings Plan Calculator is a tool that helps you figure out how much insurance coverage you might need. It considers factors like your age, income and the impact of inflation. Shriram Life Insurance offers a specialized calculator for individual needs. For example, if you're saving for your child's future, you can use the Shriram Life Children's Savings Calculator to estimate the money needed for their education.

Let's say your child wants to be a doctor, and you start saving when they are one-year-old. The calculator shows that you need to save Rs. 16,706 per month. The current cost of becoming a doctor is Rs. 25,00,000. In 2039, when your child turns 18, and considering a 4% inflation rate, you would need Rs. 48,69,751 for them to pursue a medical career.

Conclusion

The Early Cash Plan from Shriram Life Insurance offers a strategic and proactive approach to financial management. It serves as a versatile solution, providing a unique blend of insurance coverage and savings benefits. The plan also contains features like guaranteed cash bonuses, flexibility in choosing between options like Early Cash and Super Growth and a focus on risk elimination. Additionally, it caters to the diverse needs and goals of individuals.

The Early Cash Plan stands out as a reliable emergency fund, offering financial security during unexpected situations like hospital expenses or the unfortunate demise of a family member. Moreover, it aligns with the principle of starting investments early to harness the compounding effect, ensuring individuals maximize returns with reduced or minimal risk.

The plan also recognizes the importance of addressing significant life milestones, such as education expenses, home purchases or weddings. It provides a financial cushion through a lump sum at maturity, terminal bonuses, and accumulated cash bonuses, making these commitments more manageable.

In simple terms, Shriram's Early Cash Plan is a well-thought-out way to handle your money, manage risks and ensure you're financially secure now and in the future.

FAQs

How does the Early Cash Plan from Shriram Life Insurance help in emergencies? 
The plan is a dependable emergency fund, ensuring financial security in unforeseen circumstances such as hospital bills or unexpected family events. The Early Cash Bonus provides a yearly cash bonus that can be utilized to meet an individual's specific needs.

Is there a guaranteed return with the Early Cash Plan? 
Yes, the plan ensures guaranteed cash bonuses and provides a financial cushion through a lump sum at maturity, terminal bonuses and accumulated cash bonuses.

Can I choose how my money grows in the Early Cash Plan? 
Yes, the plan offers flexibility. You can choose between options like Early Cash, which provides an Early Cash Bonus or Super Growth, which accumulates a lump sum and cash bonuses over time.

For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.

IRDAI Regn No: 128 
CIN No.. of the Company

The Trade Logo displayed above belongs to Shriram Value Services Limited (“SVS”) and used by Shriram Life Insurance Company Limited under a License agreement.”

BEWARE OF SPURIOUS PHONE CALLS AND FICTIOUS/FRADULENT OFFERS 

•IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.