How to Select a Guaranteed* Income Insurance Plan

What is a Guaranteed* Income Insurance Plan?

A guaranteed* income insurance plan is a term that is normally used for a certain type of life insurance plan that give you two benefits in one policy. First, it offers life cover to protect your family if something happens to you. Second, it promises a fixed payouts at regular intervals after a defined period, subject to policy terms and conditions.

This money is called guaranteed* income. It is given at regular intervals like monthly, quarterly, half yearlyyearly for a fixed number of years. You can use it to cover your daily expenses, school fees, or medical costs.

Here's How You Can Select the Right Guaranteed* Income Plan

To find the best guaranteed* income plan, follow these simple steps:

1. Know Your Financial Goals

   Before buying a plan, ask yourself:

   • Do I want monthly income for retirement?
   • Do I need money for my child’s future education?
   • Do I want to cover daily family expenses in later years?

   When your goals are clear, you will know how much guaranteed* income you need and for how many years.

   
   

2. Decide How Much Coverage You Need

   The plan includes life cover. Think about how much money your family will need if you are not around. For example, will they need help with repaying loans, paying rent or school fees? Pick a plan that offers enough life cover along with guaranteed* payouts.

   
   

3. Check How Long You Will Pay Premiums

   Most plans give you the choice to pay for a short time and enjoy income later. For example:

   • Pay for 10 years and get income for 20 years
   • Pay one time and get income after 5 years

   Choose the payment method that fits your current income and spending.

   
   

4. Use Online Premium Calculators

   Many insurance companies provide easy tools to check how much premium you need to pay. You just have to enter your age, policy term, and the sum assured you want. This helps you plan your budget and avoid surprises later.

   
   

5. Understand the Features of the Plan

   Look for the following features:

   • Regular income - Option to get monthly, quarterly, half-yearly or yearly payouts
   • One-time or limited-period premium payment
   • Lump sum at maturity (end of policy term)
   • Joint life option (covering two people under the same plan)
   
   

6. Think About Inflation

   Over time, prices of all things tend to go up. For instance, ₹10,000 today may not be enough to buy the same thing after 10 years.

   
   

7. Add Useful Riders for Extra Protection

   You can get added coverage by adding riders like:

   • Critical Illness Benefit Rider – gives payout in case you are diagnosed with specified critical illness as mentioned in the rider.
   • Accidental Death Rider – Additional payout to the nominee in case of death due to an accident
   • Disability Rider – In the event of disability, future premiums are waived off.

   These are some of the riders that make your plan more comprehensive at an additional nominal premium.

   
   

8. Compare Different Plans

   Every insurance company offers different plans with different features and benefits. Take time to compare:

   • Premiums
   • Income period
   • Payout mode
   • Life cover amount
   
   

9. Prefer to Buy Early

   Starting early in life typically means lower premiums and better returns. Planning early can help you save more.

   
   

10. Use Trusted Sources for Research

    Before you buy a plan, read from trustworthy sources for comparing different plans available in the market and make an informed decision.

Conclusion

A guaranteed* income insurance plan is a simple way to secure guaranteed* income and protect your loved ones financially. It helps keep you ready for the requirements of life ahead, like retirement, education, or medical care. To select the right plan, you should know your goals, use the premium calculators, check the features of the plan, and compare them.

FAQs

1. Are guaranteed* income plans tax-free?

   A policyholder can claim a tax benefit on the premium paid under Section 80C of the Income Tax Act, 1961 (applicable to the old tax regime). Additionally, the maturity amount received is also tax-free under Section 10(10D) in both the old and the new tax regimes.

   
   

2. How does a guaranteed* income plan work?

   You pay premiums for a set number of years. After the policy term ends or after a waiting period, you start receiving a fixed income regularly over a period of time. This income would be in addition to the life cover offered by the plan. This way, your family is still protected.

   
   

3. What is the maturity benefit in guaranteed* income plan?

   The maturity benefit is the amount you get at the end of the policy term. This is usually given as a lump sum. In some plans, it is paid along with the regular income. It depends on the policy type and premium you paid.