Features of Guaranteed Return Insurance Plans in India
The features of the guaranteed return plans are as follows:
Guaranteed returns : You will receive guaranteed income under these plans for a set period of time. This income can
help you reach life goals like saving for a child's education, buying a new home, or building a
corpus for an early retirement. It can be lump sum, short-term, long-term, or immediate.
Flexibility in selecting returns : The plan offers you the option to receive an immediate, short-term, long-term, or guaranteed
lump sum payment based on your needs and goals.
Guaranteed Extra Benefits to Build Corpus : A portion of the guaranteed maturity benefit will be added to your policy each year if you choose
an endowment plan, which will help you gradually increase your corpus.
Life insurance coverage : Your family members are protected by a guaranteed return plan with multiple plan options
starting on the date of policy issuance.
Simple premium payment : You can choose to pay the premium in installments over a period of one, two, three, or four
years with this plan.
Why should you invest in a Guaranteed Return Plans?
Is a guaranteed plan not what you are looking for? Here are a few of the main justifications for
acquiring a guaranteed return plan:
To Achieve Future Financial Objectives : To Achieve Future Financial Objectives
To Keep Your Family Safe : Included in these plans is a life insurance component that offers stability and support in hard
times financially.
Helps to Protect Your Corpus : Plans with guaranteed returns are not affected by changes in the market. These are savings
plans designed to protect the amount you have invested.
Benefits of Guaranteed Return Plans
Policyholders can take advantage of various benefits offered by these plans, such as the
following:
100% guaranteed return : Plans are low-risk investment choices for the assured since they do not rely on the market and
offer returns as early as the first day.
Benefit of Maturity : In addition to a guaranteed sum assured, guaranteed return plans offer a basic reversionary
bonus and, if applicable, a terminal bonus at the end of the policy term.
Benefit on Death : The nominee or beneficiary receives payment of the death benefit and any applicable terminal
and reversionary bonuses in the event that the policyholder dies within the policy term.
Payments are made over the next 15 years or in accordance with the terms of the policy.
Additional Rider : Policyholders can frequently purchase optional riders or add-ons through Guaranteed Return
Plans to enhance the coverage. These riders provide additional benefits or cover specific risks.
Ease and Availability :Plans with guaranteed returns are frequently simple to comprehend and uncomplicated. The
customer receives additional benefits when they purchase the Guaranteed Return Plan online,
such as no surprise fees, complete transparency, and understandable charge and return
policies.
Risk Reduction and Diversification : Investment portfolio diversification and risk reduction can be enhanced by the inclusion of
guaranteed return plans. While having a diverse investment strategy with a range of asset
classes is important, adding a guaranteed return plan gives the portfolio stability and balance.
This can lessen the possible risks connected to the portfolio's other investments.
How Does a Guaranteed Return Insurance Plan Work?
- The policyholder pays the insurance company a premium in Guaranteed Return Plans in
India. The insurer guarantees a specific rate of return in exchange over a predetermined
time frame, usually between five and thirty years.
- The policyholder pays the insurance company a premium in Guaranteed Return Plans in
India. The insurer guarantees a specific rate of return in exchange over a predetermined
time frame, usually between five and thirty years.
- The primary goal of the Guaranteed Return Insurance plan is to provide a guaranteed
return on investment, in contrast to traditional life insurance policies that prioritize the
death benefit.
- The policyholder has the option of receiving regular payouts during the policy term or
receiving the payout at the conclusion of the policy term.
- The policyholder has the option of receiving regular payouts during the policy term or
receiving the payout at the conclusion of the policy term.
Who Should Buy Guaranteed Return Plans?
Parents : Plans with guaranteed returns are available for parents who wish to safeguard their family's
future. These policies assist you in creating a corpus to support your child's postsecondary
education and aspirations. For your children, the life insurance component provides extra
financial security.
Young Workers : Young employees who are risk averse can select guaranteed return plans to accumulate
savings for their long-term objectives. The life insurance part also provides additional financial
support to your loved ones in the event of your absence.
Taxpayers : Guaranteed return plans offer tax advantages under Section 80C of the Income Tax Act.
Taxpayers may decide to sign up for these plans if they want to reduce their liabilities while
pursuing future financial goals.
Working Women : Guaranteed return plans are a useful tool for confident young women to plan for the future. In
order to meet their financial objectives, including retirement, they can accumulate a corpus.
Newly Weds : Recently married couples can invest in a guaranteed return plan to secure their financial future.
When should you buy a Guaranteed Return Plan?
Guaranteed return plans, like any other investment, ought to be connected to your financial
goals. These goals will change according to where you are in life right now. A post-retirement
income that is risk-free from the stock market is what some people desire, while others may
want to safeguard their child's future. Still others may want to save money and have a second
source of income. With a guaranteed return plan, any age and any life goal can be
accomplished with effectiveness.
Tax Advantages for Guaranteed Returns Plans
Let us examine the tax benefits associated with guaranteed return plans:
Investment Tax Benefits : Under Section 80(C) of the Income Tax Act, 1961, you can receive tax benefits up to a
maximum of 1.5 lakhs when you invest in a guaranteed return plan. This implies that your
taxable income is reduced by the maximum amount you invest in these plans. This provision
allows you to lower your total tax obligation.
Returns with Tax Benefits : The tax advantages on your returns are an additional benefit of guaranteed return plans. The
maturity amount of these plans is tax-free under Section 10 (10D) of the Income Tax Act. You
can save even more money by doing this, which guarantees that the returns on your investment
are not taxed as income.
What Should You Consider Before Buying a Guaranteed Return Plan?
Take into account the following elements when purchasing a guaranteed insurance plan in
India:
Identify your financial objectives : As with any investment, guaranteed return plans ought to be in line with your objectives. Think
about your current situation and your financial goals, such as providing for your child's future,
starting a second source of income, or saving for retirement.
Looking for assured profits : A guaranteed return plan is the best choice if you are risk averse and would rather have a
guaranteed return on your investment. Regardless of changes in the market, these plans
guarantee a payout.
Long-term financial gain : Plans with guaranteed returns have a lock-in period that can last anywhere from five to thirty
years, making them long-term investments. Guaranteed return plans are something to think
about if you are searching for a savings plan that will eventually produce a fixed income stream.
Making retirement plans : Guaranteed Return Insurance Plans are best suited for people seeking a fixed income stream in
retirement who have low risk tolerance and would rather have stability than higher potential
returns.
Protection of LifeIn the unfortunate event of your untimely death, it serves as a financial safety net, guaranteeing
your loved ones' financial security. Even though life insurance is not directly tied to portfolio
diversification, it is still a crucial factor in thorough financial planning.