In these turbulent times, the pressure of upholding and maintaining one’s financial condition has taken a toll on many individuals. These problems mainly surface because many people do not understand how to begin planning their finances and what steps they must take. Along with this, with the variety of financial products available in the market, it is difficult for individuals to decide on a single plan.
Achieving financial stability involves taking consistent effort and practice to meet your short and long-term financial goals. Individuals must ensure they opt for the perfect plan that will help them meet their financial requirements. Insurance companies understand the importance of financial stability in an individual's life and offer Guaranteed Income Plans to help one meet their financial goals.
Meaning of guaranteed income plans:
The Guaranteed Income Plans are specially designed to handle the financial requirements of risk-averse individuals and provide them with the advantage of investment plus life insurance along with maturity benefits and assured payouts. This plan helps individuals get financial security by offering them guaranteed and regular income at a pre-defined percentage of the Sum Assured and is consequently considered the best investment plan for monthly income. The policyholder will decide on the policy duration, depending on which, at the time of maturity, the guaranteed additions are accumulated over a time period.
Through this plan, the policyholder can get monthly, quarterly, half-yearly, or yearly income in the form of payouts. Additionally, with a monthly income plan, they will not have to worry about the stock market's ups and downs since these plans are not linked to market investments. If the policyholder meets their untimely demise before the plan reaches maturity, the premium payment for the plan is waived off, and the beneficiaries will get the death benefit. After the policyholder's death, the guaranteed annual payouts are offered to the beneficiary at specific points in the policy tenure, based on what the policyholder chose when purchasing the plan.
Features of guaranteed income plans:
It is an insurance plan that provides the policyholder with a regular income for a specified tenure that may vary from 10-20 years.
The policy term varies between 10-30 years.
Offers death benefits, along with maturity benefits.
It offers a vested reversionary bonus with a terminal bonus (provided at the time of maturity if existing).
Benefits of guaranteed income plans:
1. Death Benefit:
In the event of the individual's untimely demise during the policy tenure, the beneficiaries of the plan receive the basic sum assured amount along with a reversionary bonus and terminal bonus. The payouts from the plan are carried for the next 15 years or as mentioned in the policy. In the event of their demise after the premium payment tenure or during the payout phase, the beneficiaries get the sum assured amount with other benefits.
2. Maturity benefit:
When the plan matures, the policyholder will get the simple reversionary bonus with the terminal bonus. If the payout period is around 15 years, the insured individual is paid the regular amount, which is the pre-determined per cent of the Sum Assured. This monthly income plan for senior citizens can help them deal with different emergencies and issues.
3. Additional Rider:
These plans come with an inbuilt rider called the 'Accidental Death Benefit Rider', which provides financial aid to the policyholder’s family in case of the policyholder’s accidental demise.
4. Income Tax Benefit:
The Tax Deduction under Section 80(C) is provided annually, and the tax exemption under Section 10(10D) is available on the maturity proceeds and death benefit payout, which are subject to the terms and conditions.
Who should opt for the Guaranteed Income Plan?
If you are an individual who hopes to build a significant financial corpus and have a stable income in your old age, then the plan is ideal for you. Any individual who is in the age group of 18-60 years and is risk-averse must purchase the fixed monthly income plan.
The returns benefits earned from the guaranteed annual payouts are paid in the last 3 or 5 years of the policy. However, it will depend on the policy term chosen by the policyholder when purchasing the policy.
Summing it up
In today's world, it is quite important to keep track of your savings and life insurance. The guaranteed monthly income plan is one of the most suitable insurance products that offer life insurance benefits and guaranteed returns. You can easily compare the different plans available online and enjoy the advantages of regular periodic payouts, insurance coverage, bonuses and more.
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