Guaranteed Insurance Plan
Insurance makes sense only when it assures guaranteed returns to the investor for the lifetime and beyond. A guaranteed return plan promises just that. Here are a few tips to keep in mind though before investing in one.
Savings help. They help fulfill our family’s financial goals and also secures their future in our absence. However, savings do come with a shelf line and may get exhausted after a certain time. This is where a guaranteed return plan holds importance, ensuring monetary benefits after the end of the policy term. Here we discuss in detail what are guaranteed returns or insurance plans and a few things to bear in mind when choosing to invest in one.
Meaning of Guaranteed Return Insurance Plan
In simple words, a guaranteed return plan refers to a life insurance plan that assures guaranteed returns to the investor throughout the term of the policy and even beyond it. This means that after the policyholder has outlived the plan tenure, they would still keep receiving monetary benefits from a guaranteed plan.
The prime advantage of availing a guaranteed insurance plan is that it allows the investor to make a decent amount of savings for use in the future. With guaranteed returns flowing in throughout the policy term, there would be enough corpus created for the policyholder to secure their family’s future when they are not around (upon demise of the insured). This also means that a guaranteed return plan is designed to offer both savings benefits and insurance protection to the policyholder.
4 Key Features of a Guaranteed Income Insurance Plan
Here are some of the basic features of a guaranteed return plan:
- It offers the dual benefit of savings and insurance to the investor.
- It allows the investor to choose the term of the plan as well as the rate of premium that they can comfortably afford throughout the policy tenure.
- The plan returns a lump sum amount to the investor at the end of the policy term. There is also the option of availing returns in installments over a regular specified time duration.
- Owing to their guaranteed income feature, these plans are most beneficial for life after retirement.
>>Guaranteed Return Plans And Their Benefits
Top 3 Benefits of Availing a Guaranteed Return Policy
We learned above the key features of a guaranteed return plan. Now let us look at some of the major advantages of choosing these plans:
- Guaranteed return plans are considered to be one of the most flexible and dependable financial products promising fixed guaranteed returns to the investor throughout the policy term and even after they have outlived its tenure.
- With regular and guaranteed savings coming in as part of the plan, the policyholder is able to build a decent corpus of wealth for use in the future. This amount can be used to achieve the financial goals of the family members as well as provide financial protection to the loved ones in the unfortunate event of the policyholder’s demise.
- Guaranteed return plans work on a stable financial model that facilitates consistent savings since there is always a guaranteed amount of money flowing into the plan. Consistent savings help build a secure and worry-free financial future for the investor.
5 Things to Consider Before Going for a Guaranteed Insurance Plan
So a guaranteed return plan sounds all good, safe, reliable and perhaps the best financial product to invest your money in. The benefits are quite tempting, obviously, however, it is equally important to make your moves safely in order to avoid making any serious mistakes while investing in a guaranteed savings and insurance plan.
Here are a few key tips to keep in mind for ensuring safe investment in guaranteed return plans:
- Make sure that you choose an insurance company that understands your financial requirements and goals so that they can help you choose an appropriate plan accordingly. Remember that before investing in any plan, it is key to do your homework well with regard to choosing an insurer.
- Make your insurer aware of your long-term financial goals. It is important for them to understand what your financial goals are for the future. This would include the financial goals of your family as well. Accordingly, your insurance company would be able to help you determine the best guaranteed income plan that covers your financial interests well in the long run.
- Make sure to buy rider benefits on your plan. A plan with rider benefits is always helpful since your financial needs are bound to change over time. Hence, if your guaranteed return plan allows you to buy add-on riders, it would help you enhance your insurance coverage on the plan over the future years, as your needs change. Similarly, it is important that the guaranteed savings plan gives you the facility to avail loan as well to take care of any emergency situations at ease.
- Make sure that the best guaranteed return plan that you buy offers ample tax benefits to enjoy. Generally, guaranteed return plans offer tax deduction benefits on the premium payable towards the plan. Also, the maturity benefit owed to the policyholder is also eligible for tax deductions. These tax benefits are made available to the insured under Section 80C of the Income Tax Act, 1961, which permits deductions on tax up to Rs. 1.5 lakhs.
- Make sure that your plan offers some extra benefits such as annual or loyalty bonus on the policy which is available to the policyholder in case they opt for longer-term plans. Some guaranteed return plans are designed to offer extra benefits over and above the usual ones offered under the plan, if the policyholder chooses to pay premium towards the plan for a longer duration. Before investing in a guaranteed return plan, it is worth considering if your plan offers such additional benefits.
Read More: Best Guaranteed Income or Guaranteed Return Plan
Summing it Up
Guaranteed return plans offer the dual benefit of savings and insurance and hence opted for by most investors in India. For more assistance on choosing the best insurance policy in India with high returns and savings benefits, browse through PayBima online. The company provides a host of insurance options to the investor in different categories like life insurance, health insurance, motor insurance, and the like.
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