Financial freedom is one of the most important money goals in an individual’s life. And to seek financial freedom, individuals choose to invest in different financial instruments. A guaranteed return plan is one of the most common options in the recent past. What is a guaranteed return plan? Why is it important to invest in it? Let us get started to understand it here right away!
What is a Guaranteed Return Insurance Plan?
A guaranteed return insurance plan is a comprehensive life insurance plan that provides a life cover and a guaranteed return on maturity.
The life cover will provide the lump sum death benefit to your family in your unexpected demise. And the guaranteed returns will be provided to you when the policy matures. As the guaranteed returns from the savings plan are decided during the purchase of the plan, you can invest in it based on your financial goals accurately.
Insurance providers offer online savings plan options to make the comparison and purchase of the product convenient and cost-efficient. For example, when you invest in the Tata AIA policy, you can purchase and make the claim registration through a simple and hassle-free process.
Why Should You Invest In A Guaranteed Return Plan?
We have understood what a guaranteed return plan means. Now, let us know why you should invest in it.
- Combined savings and life insurance benefit – When you invest in a comprehensive life insurance plan, you can ensure a lump sum death benefit to your family to reduce the financial burden during your unexpected demise during the policy term. In addition, you can save a specific amount regularly to accumulate a huge fund as a maturity benefit at the end of the policy tenure.
- Guaranteed return – While the savings insurance policy provides an option to save for your future, it is important to note that the return is guaranteed. Therefore, you can plan to utilise it to achieve all your financial goals. For example, if you want to start a new business after 10 years, you can start saving for the required fund without compromising your family’s financial security.
- Flexibility – A guaranteed return plan offers the flexibility to modify the policy features as per your financial needs. For instance, you can choose the premium payment frequency as monthly, quarterly, semi-annually, or annually based on your steady flow of income. Also, you can decide on the mode of payout, whether it is a lump sum, regular income, or a combination of a regular income and lump sum. The regular income can be monthly or annually for a fixed term or whole life.
- Secure investment platform – The savings plan provides a platform to secure your accumulated savings. As the returns are not based on the market conditions, the value does not fluctuate. Therefore, you can ensure secure and higher returns in the long term.
- Choice of riders – Like any other traditional life insurance plan, you can opt to purchase additional riders to enhance the financial benefits of your guaranteed life insurance policy. For instance, you can include the critical illness benefit rider to ensure financial assistance from your insurer to pay for your hospitalisation and other medical expenses in case you get affected due to a critical illness. It is in addition to the life cover and savings benefit in the guaranteed return insurance plan.
- Tax advantage – The guaranteed return plan provides the life cover and savings benefit while helping you save on tax. Therefore, the premium you pay for the guaranteed return savings plan and the payout will qualify for a tax deduction and tax exemption under the Income Tax Act, 1961, based on the terms and conditions.
Investing in an insurance policy with guaranteed returns offers a range of benefits. You can ensure a life cover and a guaranteed return to achieve your financial goals. In addition, the policy features are extremely flexible, allowing you to customise them based on your needs. Finally, it is a safe investment platform that can secure your returns while providing a tax advantage. Therefore, invest in a guaranteed return plan to secure your family and stay invested through a long policy tenure to accumulate a huge fund!