How to Plan Your Finances with Guaranteed Return Insurance Policies

Guaranteed Return Insurance Policies 

When you invest your hard-earned money, the aim is long-term wealth creation. However, not everyone may be comfortable with the set of risks that most investment products come with. Enter guaranteed return plans!  

Guaranteed return insurance plans are life insurance plans that pay guaranteed returns when the plan matures. These plans are most suitable for people looking for life coverage along with the assurance of fixed returns. Let us look at how you can plan your finances with a guaranteed return plan. 

1. The returns are guaranteed. 

In an already volatile market, getting guaranteed returns from an investment can be rare. The assurance that a guaranteed return insurance plan gives you makes it easier to plan for the future. Knowing how much you will receive at the end of a particular term can make saving easier.  

2. Your loved ones are protected against life’s uncertainties. 

For the primary earners in the family, having a life insurance plan becomes a necessity. It acts as a financial blanket for your family in case of a mishap. When you invest in a guaranteed return plan you ensure your loved one’s security even in your absence.  
 
Tip: if you wish to enhance the coverage offered by your insurance policy, then you have the option to choose riders.  

3. You have the freedom to plan your future. 

Depending on the type of guaranteed return plan that you have picked, you also have the option to select the payout option. Most plans allow: 

• Endowment plans where a fixed amount is paid out when the insured outlives the policy period. You can use this option if you are planning for a specific goal, such as your child’s higher education, buying a house, etc.  
• In a few years, if you wish to have a regular inflow of cash, then you can choose the regular income option. The duration of the payout is variable.  

4. You get to enjoy tax benefits. 

Tax-saving products can be an important aspect of financial planning. These guaranteed return plans allow up to ₹1.5 lakhs of tax deduction on the premium that is paid. Under section 10(10D), returns from the policy offer exemptions.  

5. Ideal for people with a low-risk appetite 

For an unseasoned investor, understanding the intricacies of the market can be a complicated process. An unstable market and the unpredictability of returns can keep you concerned. In such a scenario, a guaranteed return plan can be the way ahead. However, it is best recommended that you read the policy documents carefully before making a decision.