You spend a major part of your day at your office hustling, working hard, and persevering. Hence, the money that you earn needs to be carefully and optimally preserved and invested for your future. Of all the different investment instruments in the market, insurance plans can be a great way to keep your money safe. You can consider investing in plans, such as a regular income plan or a guaranteed endowment plan. These plans can offer high returns and at the same time offer you a life cover.
The best guaranteed income plan can also be an excellent long-term savings tool. You can use it to save for retirement expenses, higher education costs, and more. However, before you put your hard-earned money into a plan, you must pay attention to the type of plan, the insurance company, the features, and the cost of premiums, among other things.
This article focuses on some crucial aspects of a guaranteed savings plan and how you can pick one.
What are guaranteed savings plans?
A guaranteed savings plan, also known as a guaranteed endowment plan, is a type of life insurance policy. Such plans offer a life cover along with systematic savings and high returns. You can select the policy term and premium amount as per your convenience. At the end of the tenure, i.e., at maturity, your accumulated capital is paid to you either in a lump sum payout or as regular income over a chosen time frame.
These plans are one of the best and most preferred saving schemes in India, and a lot of people use them as a retirement investment plantoo.
What are the things to consider when buying a guaranteed savings plan?
If you are looking to invest in a regular income plan, you must pay attention to the following five aspects:
1. Keep your future goals in mind: Your future goals will dictate the most suitable guaranteed savings plan for you. For instance, if your goal is retirement, you may have a long time left to retire. In this case, you can opt for a long policy term and take a regular income payout when you retire. However, if your goal is to save for a child’s education, you would need a shorter policy term and a lump sum payout on maturity to cover the tuition fees, travels costs, etc.
2. Look for a flexible policy: It helps to pick a savings planthat is flexible and can be customized as per your income and budgetary limitations. Choose a plan that allows you to pay the premiums in a single payment as well as in regular instalments, and then select the option you like.
3. Add riders: Riders can add more protection to your plan. Therefore, you must always look for an insurance product that offers various riders as per your suitability. Some common yet useful riders include the critical illness rider, the accidental death rider, the permanent disability rider, etc.
4. Check for a loan facility: A financial emergency can strike anytime and anywhere. So, it is important to invest in fixed income instruments that can provide you with a loan in your hour of need. Most savings plans offer a loan or partial withdrawal facility after the policy acquires surrender value. Make sure to look for this feature before you purchase a plan.
5. Choose a trustworthy insurance provider: It goes without saying that when you invest your hard-earned money in a savings plan, you must look for the best guaranteed income planin the market. This can be done by paying attention to the insurance company and its past performance. The claim settlement ratio, solvency ratio, etc., are good parameters to determine the credibility of the insurer.
Income Builder from Edelweiss Tokio Life Insurance
TheEdelweiss Tokio Life Insurance Income Builder Planis a savings plan that offers you a guaranteed second income for life. Here are some benefits of this guaranteed income plan from Edelweiss Tokio Life Insurance:
o You get a life cover that protects your family in your absence.
o You can pick two types of plans:
- Base plan: This allows you to pay premiums in a lump sum or as regular instalments.
- Secured income plan: This offers an additional benefit of a critical illness rider along with the policy. Under this plan, you stay protected against the financial costs of 12 critical illnesses listed in the plan, such as heart attack, cancer, third-degree burns, kidney failure, and more. Your future premiums are also waived off on the diagnosis of a listed illness.
o You can receive your income in the frequency you like, such as monthly, quarterly, semi-annually, or annually. You can also receive a part of it in a lump sum and the other part as regular income.
o You can claim tax benefits on your regular income plan. The premiums paid and benefits earned qualify for tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act of 1961.
o You can add riders, such as the accidental total and permanent disability rider, income benefit rider, waiver of premium rider, payor waiver benefit, and accidental death rider.
A guaranteed savings plancan add financial security, liquidity, and protection to your life. It also offers financial stability to your loved ones in the form of insurance. However, it is essential to pay attention to certain factors before you invest in any such plan. It can help to look for the features and benefits given above. This way, you will make the most of your invested capital, and your family will be safeguarded in your absence. With a sound plan and a trustworthy insurance company by your side, you can live a stress-free life with no financial anxieties.
The Income Builder Plan from Edelweiss Tokio Life Insurance can provide you with great features at cost-effective premiums while keeping your loved ones protected at all times.
Chirag Iyer - BFSI Enthusiast
Chirag is a writer and an avid reader who loves to drink coffee! His other interests include boxing, karate, and singing