The best way to lead a peaceful retired life is to have sufficient income that allows you to live an adequate lifestyle and be able to meet any emergencies that might arise. The traditional approach to retirement planning has been to choose low-risk and low-return long-term investments. Some of the aforementioned investments have lock-in periods that make switching to more profitable avenues difficult.
Moreover, most investment avenues do not provide substantial relief in case of an unfortunate event like the death of the investor. In this context, a savings insurance plan is a cost-effective investment tool to ensure protection for your family and get a regular stream of income in your old age.
Table of Contents
What is a guaranteed income plan?
As you move ahead in life, your needs change according to the change in your life stages. You create a savings plan and deposit funds according to your capacity, needs, budget, and savings horizon. The objectives of the plan may include housing for the family, the education of children and their marriage, career support, and your own retirement planning.
Besides planned expenditure, there could be unexpected emergencies that could put a dent in your savings. You should also remember that in addition to a savings plan, an adequate life cover is important to keep your family protected from financial distress when you are not around.
A guaranteed return investment plan combines life insurance with guaranteed returns; it offers the benefits of savings with a life insurance cover and is the most suitable option if you are planning for important life goals, including your retirement. You can also use the single premium feature available in most savings insurance plans to purchase a plan when you have surplus funds that you think can be allocated towards securing your post-retirement income.
How is a guaranteed return plan useful?
A guaranteed return plan provides you flexible options to create an endowment fund, regular income, or whole life income. The aforementioned plan allows you to properly plan for your future and lead a stress-free life.
Seven reasons why guaranteed return plans are profitable
The efficient management of financial goals
Guaranteed return plans help you plan out and manage your financial commitments in an efficient manner. The premium calculator that is available on most insurance companies’ websites can assist you in the determination of the cheapest premium for the optimum combination of savings and insurance.
Life cover
The life coverage included in a guaranteed return plan acts as a safety net for your family and supports them in the pursuit of their goals even after your demise. You can also extend the life coverage to include your spouse.
The flexibility of premium payment
Many insurance plans offer flexibility in the payment of premiums. For instance, Tata AIA, one of the country’s leading insurers, has a guaranteed return insurance plan which offers you the flexibility to pay a single premium or pay premium installations for a limited term.
The choice of the frequency of premium payments
You can pay your premium monthly, semi-annually, or annually. You can check the status of your guaranteed return plan policy payment online.
Add-on riders
You can include add-on riders to your savings insurance plan, including accidental death and dismemberment protection and waiver of premium. This is a handy way to get better coverage at a nominal additional cost.
Loan facility
You can avail loan facility against your guaranteed return savings plan, thereby providing you additional flexibility to manage your finances.
Tax benefits
You are eligible for tax benefits for the premium paid and on the sums received under the policy under Section 80C and Section 10(10D) of the Income Tax Act, 1961. Therefore, a guaranteed return insurance plan provides you with the dual benefits of savings and a life cover.
Conclusion
All of us wish to spend our golden years without having any financial worries. To attain this goal, guaranteed return investments plans are suitable options since they are flexible and affordable and incorporate the dual features of savings and insurance. There is no such thing as the best guaranteed income plan since the plan you choose depends on your financial goals and financial capacity.