In modern times, a single person's income is barely enough to run an average household. With financial stability still being an elusive concept to a majority of people, understanding the need for the right tools to create financial security is crucial.
A guaranteed1 income plan caters specifically to risk-averse investors. Along with the benefits of traditional insurance plans, it offers maturity benefits as well as the opportunity to create a secondary source of income, which can always come in handy in the future.
What is a Guaranteed1 Income Plan?
A guaranteed1 income plan, also known as a guaranteed1 savings plan, is an insurance policy that provides dual benefits. In addition to life insurance and maturity benefits, you are guaranteed1 a fixed income in the form of yearly, monthly, or quarterly payouts. You can choose to pay an annual premium for the duration of the plan based on your present age and financial condition.
The plan also offers attractive tax* benefits as the premiums paid each year, not to mention the maturity benefits and payouts, are exempted from tax*. The seamless combination of guaranteed1 income with death benefit payout in the event of the policyholder’s demise within the plan’s tenure is what makes the policy appealing to investors.
Reasons to Purchase a Guaranteed1 Income Plan
Purchasing a guaranteed1 income plan is not only beneficial but also easy. For instance, you can find the right monthly plan for your needs at the click of a button and avail yourself a whole host of benefits to secure your financial future, such as:
Guaranteed1 Returns
As mentioned above, guaranteed1 income plans are saving plans designed for risk-averse investors. The benefits listed under the policy are guaranteed1, which means that the monthly income plan is ideal for those who prioritize security and peace of mind. It will ensure that your standard of living will not be adversely affected even after retirement.
Maturity Benefits
With a guaranteed1 savings plan, you’re eligible to get maturity benefits as mentioned in the policy through lump-sum returns if you have paid all the premiums till the end of the policy term. The premiums and payout options are flexible, so you can meet all of your future financial aspirations, whether it is your children’s higher education, marriage, or creating a secondary source of income to supplement your retirement savings schemes. No matter what your aim is, a guaranteed1 income plan can help you achieve it.
Flexible Terms
A guaranteed1 savings plan is designed to be flexible and can be customized to your needs. You can pay premiums through a wide variety of modes such as credit card, debit card, cash, cheque, etc. Additionally, variables such as the premium paying term, rate of interest, frequency of payouts, and the amount received under payouts can be modified to make sure they cater to your present and future needs, so you get the best benefits from your investment.
Life Insurance
A guaranteed1 income plan doubles as insurance for life cover. It can provide financial protection to you and your family after retirement. As a standard policy, your nominee is eligible for death benefits in case of demise during the policy term. Moreover, most policy providers offer the option of waiving premiums for the rest of the duration of the policy in the occurrence of an unfortunate event.
Riders#
You can choose to combine additional riders# with your policy that provide extra coverage in case of accidental death, serious illness, extensive hospital bills, etc. A lump sum amount is paid to the family in case of accidental death. The benefits can sometimes be doubled in certain cases of accidental deaths or dismemberments.
Tax* and Loan Benefits
A lot of people choose to save in insurance plans because of the various tax* benefits that can be availed. Through the guaranteed1 income plan, you can save up to ₹1.5 Lakh as per the rules listed under Section 80C of the Income Tax Act, 1961. Additionally, the maturity benefits, additional bonuses2 and death benefits are tax*-exempt under Section 10(10D) of the Act.
Also, once the guaranteed1 income plan has acquired the maturity value, you can use it to procure a loan amounting to a maximum of 90% of the surrender value. This can be used to financially protect yourself from large, unforeseen expenses caused due to circ*mstances such as death, disability, or critical illness. The loan terms are usually very flexible, ranging from 2 to 35 years with differential premium rates for women. You can also choose between single life and joint life coverage.
Guaranteed1 life insurance plans are ideal for conservative investors who are averse to volatility and more interested in ensuring a fixed amount on maturity. Alternatively, you could go for a pure term insurance plan and save through long-term bank deposits or recurring deposits as the returns are fixed.
However, returns from bank deposits are taxable* as per the investor's income slab, while proceeds from life insurance plans are tax*exempt. If you want to choose the right plan, it’s wise to seek a combination of term insurance and traditional life insurance policies, depending on your finances and unique needs.
Conclusion
A guaranteed1 income plan provides you with a variety of options and benefits that can help you achieve peace of mind and financial stability once you retire. It can ensure that you maintain your standard of living irrespective of the market condition once the term insurance plan matures. This guarantee1 makes it one of the most appealing and dependable investment plans. It can also help provide for any large expenses you or your family need to incur in the future.
However, it is imperative to verify your current financial situation and draw out future plans and needs before choosing your monthly income plan. If required, consult and take advice from a reputable policy provider or financial expert to make an educated decision based on facts.
L&C/Advt/2023/Feb/0527
