Why Should You Invest in a Guaranteed Return Plan?

4 min read

Planning for the future comes naturally to most human beings. And most people wish to have a fixed source of income so that tomorrow even if they are in need of money, they do not have to depend on others. For this, there are different insurance and savings plans that are available in the market. But not all of these products can promise firm and regular security. Therefore, it can often be tricky to find a plan that not only matches your requirements but is also safe and low-risk. 

Due to the low-interest rate regime and the uncertainties of the market, more and more investors are now preferring guaranteed return plans which offer stable returns along with protection. Along with life cover, these plans can also help in earning guaranteed returns on your savings, as they are not related to the market.  

When looking for an investment plan, the word ‘guaranteed’ can surely look attractive. A guaranteed returns insurance plan will provide you with the below mentioned benefits, you can then make up your mind about why should you invest in a guaranteed returns insurance plan.

8 Benefits of Investing in a Guaranteed Return Plan

1. Security for the family

Being a life insurance plan, in case of the death of the insured member during the term of the policy, the appointed nominee would receive the death benefit. Along with the death benefit, there are also additions and bonuses that may be paid out, if acquired. This lump sum amount can surely help the bereaved family in dealing with the loss of the family member. If you are the primary earning member in the family, it becomes imperative for you to invest in such a plan.

2. It comes with a maturity benefit

In case the insured member survives or outlives the term of the plan, he then receives a maturity amount. The maturity benefit is the total of the sum assured along with the additions and bonuses if acquired.

3. Your financial goals will be on track

Be it saving for your retirement, or a suitable second source of income or planning your child’s dream wedding, or starting a business, whatever your financial goals may be, your guaranteed return plan will create a corpus for you that you can utilize at a later stage in life. Also, if unfortunately, something happens to you, you can rest assured that your family would not have to be in any kind of financial crisis. You can ensure that they would not have to compromise on their dreams, even if you are not around.

4. You can save on taxes

While saving for the future, you are also eligible for tax benefits, let us take a look at the different sections under which the benefits can be availed:

  • The premiums that you pay towards the plan is allowed as a deduction, up to INR 1.5 lakhs under Section 80C
  • In case you opt for riders along with your policy, you can avail deductions up to INR 50,000 under Section 80D
  • The entire maturity amount is taken as a tax-free income under Section 10(10D)
  • The death benefit received is also tax-free

5. You can choose a term that suits you

A guaranteed return insurance plan allows you the flexibility to select a premium payment frequency that you are comfortable with. On the basis of your financial requirements, you can pay throughout the term of the plan or for a limited period.

6. Riders can help in enhancing the cover

Under endowment assurance plans you can add riders to your plan by paying an extra premium. Riders such as the following can help in increasing the coverage to a much greater extent:

  • Terminal Illness Benefit Rider
  • Term Rider
  • Accidental death and disablement benefit Rider
  • Premium Waiver Rider
  • Hospitals cash Rider

7. You are eligible for loans

With guaranteed return insurance plans, you also become eligible for liquidity in the form of loans. Once your plan acquires a surrender value, you can ask for a loan of up to 90% of the collected corpus. In your need of financial help, you will receive the money instantly.

8. Offers you peace of mind

A big majority of investors like to keep their money in safe and secure investment options. They wish to stay away from the roller coasters of the capital market. If you are such an investor who has a low-risk appetite, investing in a guaranteed return insurance plan will offer you returns without the fear of losing your money.  Market fluctuations will not bother you and you will not lose your peace of mind. 

There are 3 Es in Guaranteed Plans

Putting your money in a guaranteed return insurance plan is Easy, it is also easy to understand how these plans work. With minimal paperwork and no pre-policy medical check-ups, these plans are Effortless to purchase. You can compare different plans and then purchase them online. That’s not all, when you invest at an early stage these plans can be extremely Economic.

Also Read: GRP Have Triple Taxation Benefits

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Gayatri Prabhu, Head-Digital Business at Mahindra Insurance Brokers Limited (MIBL) is one those few digital leaders who has the width and depth that is required to execute an ROI driven holistic digital strategy. She cuts through the noise, identifies the critical levers and leads her team to successful execution of the defined strategy. Her core mantra to win new and retain existing customers is: understand the consumer behavior and craft experiences around it.

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