How do you choose a savings plan that meets your needs?

By Joanne Poh, 15 June 2019 543

Savings plans can be an excellent tool to help you meet your financial goals. But you shouldn’t just select any savings plan. Savings plans are not one-size-fits-all. Different plans can have vastly different terms and features to suit a variety of needs. Therefore, it is important to choose a plan that meets your specific needs.
Here are three key things to consider when choosing a savings plan.

What are your financial goals?

A savings plan should help you achieve a particular financial goal. So, of course, you need to first figure out what your goals are.
Financial goals can be short-term, medium-term or long-term. A long-term goal you might hope to achieve with a savings plan could be to build up your retirement income, while a medium-term goal could be to save for your child’s education. Short term goals could include saving up for a wedding, car or house. Time horizon aside, your financial goal could also be to add diversity to your existing investment portfolio, and a savings plan can be one component amongst others of a well-rounded financial portfolio. 

How and when would you like to receive your payouts?

A savings plan helps you put money aside regularly, with the goal of growing your money and then returning it to you in the form of payouts.
But not all payout structures are the same. You will thus have to think about when and how you would prefer to receive payouts in order to achieve your goals.
Timeframe is an important factor to consider when choosing a payout structure. In addition, you will have to decide if you wish to receive regular payouts over a period of time, a lump sum payout or both.
If you are using a savings plan as a means to achieve a long-term goal such as retirement, you might not have an urgent need to receive payouts until many years or decades into the future and can thus choose a plan that enables your money to grow over a longer period of time.
Conversely, if your goal is medium-term, such as to save for your child’s university education in ten years’ time, you might be better off selecting a plan that pays out in a lump sum within that time frame.

What is your preferred length and frequency of premium payment?

Regardless of your goals and when you would like to receive your payouts, another important factor to consider would be if the premiums are within your means and budget. So it’s a good idea to choose a plan with a premium term that you can afford.
Consider whether you prefer to pay more in premiums now while you are economically active so that you can pay less or nothing later on when you stop working, or do not mind paying premiums over a longer timeframe. This could be a feasible option if you have already catered for streams of income in your retirement years.
You should select a policy with a premium term that you are comfortable with in view of your long-term income projections.
Don’t forget to take into account periods when you might want to take a break in your career, such as to raise children or go on sabbatical, or when you anticipate any fall in your income, such as when you retire or if you decide to make a career switch resulting in a pay cut.
Some savings plans offer the possibility of taking a certain amount of time off paying premiums without penalties, which can be ideal if you foresee future cash flow issues or simply prefer to have more flexibility.
Online Life enables customers to shortlist plans based on the three above factors. This platform enables you to compare selected Income savings plans based on factors such as policy, payout and premium term. Using the platform, you can shortlist savings plans that suit your needs, compare plans to find the best one for you and then apply for the plan of your choice online easily and conveniently.

Let Online Life find you a savings plan that satisfies your requirements in all three areas. Click here to shortlist plans and then compare them anytime, anywhere.