Maintaining financial stability has become increasingly challenging for most people in today’s world. Thus, insurance firms have developed what we call a guaranteed income plan in response to the need for financial security in an individual’s life.
The best guaranteed income plan is specifically designed to meet the needs of risk-averse investors, including life insurance, maturity benefits and regular guaranteed payouts. It provides financial stability by paying a pre-determined proportion of the sum assured. Would you like to know more about it? If yes, read on to learn how to choose the best guaranteed monthly income plan for yourself and your loved ones.
What is Guaranteed Income Plan?
A guaranteed income plan is the general traditional plan that provides general insurance coverage along with guaranteed earnings in the form of periodic payouts. The policy subscriber can choose the frequency of these earnings.
Any person between the ages of 18-60 can buy this plan and enjoy the various benefits it brings. Moreover, it also offers maturity proceeds along with the payout benefits to the nominee in case of the policy subscriber’s demise.
Features of a Guaranteed Income Plan
In today’s fast-paced life, a single source of income may not suffice for you and your loved ones. Have you ever given thought to providing for your children’s education, planning for your retirement, or fulfilling the other dreams of your family? Are all your finances sorted out? If not, the best guaranteed monthly income plan can come in handy to assure you a second income today.
So, if you’re already curious about writing your backup plan with your own hands today, you’re at the right place because we’re discussing some features of the best-guaranteed income plan that you should know about.
| Features of the best-guaranteed income plan |
| It’s a type of life insurance plan that pays out a certain amount of money regularly for a period ranging from 10 to 30 years. |
| Offers a vested reversionary bonus and a terminal bonus, if applicable, at maturity. |
| Both death and maturity bonuses are available. |
| The benefit of tax exemption is provided. |
| The policy period might range from 10 to 30 years. |
Reasons to buy a guaranteed income plan
- Alternate source of income
The best way to fulfil all your financial needs is to have a regular income to depend upon. The income plan provides this security so that your standard of living does not change even after you retire.
2. Maturity benefit
It becomes difficult to save for a long-term financial goal; however, with an income plan, you can save up and get maturity advantages through lumpsum returns. In addition, these returns will prove to be helpful in situations wherein you need to address any urgent financial needs.
- Family security
It also works as a life cover by providing financial protection to you as well as your family. Therefore, this plan is especially advantageous to those families who are financially dependent on the sole person.
- Tax benefits
Many people invest in insurance plans because of their numerous tax benefits. Through this plan, you can save up to Rs. 1.5lakhs according to the conditions written in section 80C of the IT Act, 1961.
- Flexible terms
This plan is one of the most flexible investment plans. In fact, the terms can be modified to ensure that they cater to all your present and future needs. You can choose the rate of interest, number of premiums, the amount received under payouts, and much more.
Who Should Buy a Guaranteed Income Plan?
Before deciding whether to buy a guaranteed income plan, you must first determine whether it is worthwhile to include it in your portfolio.
Other market-linked investments, such as equities or mutual funds, may be included in your portfolio. These assets, however, come with a significant level of risk. On the other hand, because the benefits are guaranteed from the start, the best-guaranteed income plan has none of these market-linked risks.
According to experts, this plan can play a critical role in assuring your long-term financial security. It provides consistency and is a practical method for making consistent income. The income earned from this financial product is tax-free under Section 10(10D) of the Income Tax Act, 1961, subject to the criteria indicated therein. As a result, you get tax-free advantages that will help you maintain your quality of life over time.
Anyone between 18 and 55 can apply for this plan to help them plan for their future. The policy has a 25-year term; therefore, the maturity age varies from 43 to 80 years old. The policyholder has the option of paying the premium monthly or annually.
Investors seeking insurance protection and savings from a single asset can consider a guaranteed monthly income plan.
Payout Options of Guaranteed Income Plan
There are numerous plan options available that provide the flexibility to get the income according to the requirements of the policyholder. For instance, you can opt to receive your income for a fixed period of time or for your entire life, depending on your financial requirements. In fact, you can also reap the entire benefit of the income plan in one go.
Plan Customization Options Available
The best-guaranteed income plan can be customized in numerous ways depending on the product features to meet the policyholder’s specific needs. For example, you are free to choose your premium payment term, the income payout period, and the premium payment mode. In fact, some income plans let you choose to defer the payouts by a certain number of years in order to make the income payments align with your needs better.
Best Guaranteed Income Plans in India
Financial planning is essential since it better protects you from unforeseen costs. Several insurance companies now provide a variety of financial stability programmes to their consumers. They are perfect for generating assured returns and income, which will assist you in achieving your objectives to a considerable extent. However, before investing money, it is prudent to conduct a thorough analysis. A guaranteed monthly income plan is standard insurance that offers both maturity and life coverage. When you die, it pays a death benefit to your nominee.
Bonuses and favourable tax benefits are among the plan’s other features, allowing investors to live stress-free lives. If you desire a steady income, you can select guaranteed programmes based on your preferences. However, you need to examine the blueprints to select the most appropriate one thoroughly. Aside from that, they offer solutions to obtain additional ideas and invest money based on their requirements.
Some of the plans that you can consider include:
| Guaranteed Monthly Income Plan: The 8 Best to Invest in 2022 in India |
| Bajaj Allianz Save Assure Plan |
| Max Life Guaranteed Income Plan |
| Canara Smart Monthly Income Plan |
| SBI Life Smart Money Back Gold Plan |
| HDFC Life Sampoorn Samridhi Plus Plan |
| Tata AIA Life Insurance Secure 7 Plan |
| LIC New Jeevan Anand |
| PNB Metlife Money Back Plan |
Pros and Cons of a Guaranteed Income Plan
Claims like guaranteed income and money double are designed to spice up an otherwise uninteresting offering. So, if you don’t want to fall into the trap, it’s always better to know the intricacies. Here are some of the advantages and disadvantages of the income plan to guarantee that you make the best decision.
| Advantages |
| Guaranteed returns |
| Long-term savings |
| Helps in fulfilling financial goals |
| No investment risks |
| Insurance protection |
| Tax benefits |
There is only one feature against the best guaranteed monthly income plan when it comes to downsides. The sufficiency of returns is this aspect. There’s a chance that the returns generated by these plans will outperform inflation. If the returns on your long-term savings do not keep up with inflation, you may not be able to build up a substantial corpus to meet your financial goals.
Conclusion
If you want to ensure a consistent monthly income, an income plan is a way to go. It has fantastic features that allow you to concentrate more on your financial objectives. On the other hand, to ensure peace of mind, you should consider purchasing the greatest plan that meets your needs. As a result, you’ll be able to properly improve your financial situation and avoid anxieties and other issues. It even offers ways to shield your family from financial hardship by addressing basic requirements.
FAQs
The guaranteed monthly income plan that most insurers offer gives you the option of generally planning your monthly income for 10, 16, or 24 years.
This is a question that is more subjective and relative. A guaranteed income plan’s suitability is determined by an individual’s needs, risk appetite, financial goals, and investment horizon.
Individuals who may benefit from such arrangements
-have a medium to long-term investment strategy in mind
-are completely unconcerned about market dangers
-want to protect their wealth with insurance
-want a steady source of money to cover their expenses.
A guaranteed income plan is a non-linked, non-participating individual life insurance savings and accumulation protection plan with guaranteed benefits. Before purchasing this plan, there are a few considerations to make, such as:
-Period of the policy
-Period and frequency of payout
-A steady stream of income
Yes. A guaranteed income plan is a life insurance cum savings plan with maturity benefits paid out to you as guaranteed income at the frequency you choose when you enrol. You can put together a corpus that will be returned to you. You can plan on time to save for rainy days to protect your loved ones and yourself.
If Premium Protection Cover is not selected, the nominee will receive the sum assured on death plus any accrued Assured Loyalty Addition(s) if the life assured dies during the policy period.
The nominee will get the sum assured under the Premium Protection Cover option if the policyholder dies. Regular income will be paid based on the income period and frequency decided on maturity.
Yes. The income plan makes sure that once you pay your complete premium, you can start getting payouts for a definite tenure. Moreover, this income is exempted from tax according to the IT Act, 1961.
It often becomes tricky to save for a long-term financial goal. However, with an income plan, you can save up along with getting maturity benefits through lump-sum returns.
The payouts or income from a guaranteed income plan is sufficient to substitute one’s primary income and help one fulfil their everyday needs without facing any financial strain.
Read more about Best Retirement Plans.
