Are Guaranteed Income Life Insurance Plans Worth it?

  • Savings Plan Articles



If you are the sole earning member in your family, or even if you and your spouse both contribute to the household income, you no doubt have one or more people who are financially dependent on you. Alternatively, you may not be an earning member in your household, but you may contribute to the family in other ways, like taking care of the kids and managing the home. These contributions, although not financial in nature, are crucial to keep the household running.

So, no matter in what way you help run your family, it is true that in case something untoward were to happen to you, the surviving members of your household may find it financially difficult. If you are an earning member, the loss of income can be financially stressful for them. Alternatively, if your contributions are non-financial, your family may have to spend additional money to hire assistance in your absence.

Life insurance can help you and your loved ones be better prepared for such unexpected developments.

What is life insurance?

Life insurance is a contract between an insurance provider and the policyholder, where the insurance provider offers a life cover to the policyholder. A life cover is a financial benefit that covers the life of an individual, for a specified period of time called the policy term. This policy term can be 10, 15, 20 or even 30 years or more.

During the policy term, if the policyholder passes away, the insurance provider pays out the sum assured under the plan to the nominee. This is how a basic life cover works. A term insurance plan, which is the simplest kind of life insurance, is a pure life cover that offers only death benefits.

That said, there are other kinds of life insurance plans that offer different types of benefits over and above the basic life cover, like savings, investment or income. One such type of life insurance plan is the guaranteed1 income plan.

What is a guaranteed1 income plan?

A guaranteed1 income plan is a kind of life insurance plan. It offers a life cover combined with the benefit of guaranteed1 income to the policyholder. They are categorised as savings or endowment plans, and the income or the payouts that are due under these plans are assured or guaranteed1.

The ABSLI Assured Income Plus plan is one of the many guaranteed1 income plans you can buy online these days. As per this plan, you only need to pay your premiums for a short duration, and you can enjoy guaranteed1 income payouts over the long term. Here is a closer look at how the premium payment term and the income payout period compare.

Check out the details in the table below:

Premium Payment Term (PPT)

Benefit Payout Period

6 years

20, 25 or 30 years

8 years

20, 25 or 30 years

12 years

20 or 25 years

So, with a guaranteed1 income plan, you can set up a steady stream of supplementary or additional income. If you plan your purchase right, you may even be able to use this income benefit as a replacement for your primary income when you retire.

Are guaranteed1 income life insurance plans worth it?

Now that you know what guaranteed1 income plans are, you may be wondering if this is the right kind of insurance cover for your needs. To understand if these guaranteed1 income plans are worth it, let us weigh out the pros and cons of this kind of life insurance.

4 reasons a guaranteed1 income life insurance plan is worth it

  • Insurance coverage

    The first and foremost benefit of a guaranteed1 income plan is the life cover it offers. This acts as a financial safety net for your loved ones in case of your demise during the policy term. The sum assured under the plan is paid out to your nominees in this case, and they can rely on these financial benefits to meet their everyday needs or pay for their life goals.

  • Guaranteed1 income

    A guaranteed1 income plan also offers assured payouts periodically over the benefit payout period. This long-term income can be used to meet any extra expenses you may have in your day-to-day life. Or, if you are retired, you can make use of this income to replace your salary. Whatever be the scenario, there is no denying that additional income is always beneficial.

  • Low risk levels

    The income payouts in this kind of a life insurance plan are also guaranteed1. This greatly reduces the risk associated with guaranteed1 income plans, because you need not worry about the possibility of your returns on investment becoming nil or negative. If you pay your insurance premiums throughout the premium payment term as needed, the income is assured.

  • Tax benefits²

    Guaranteed1 income plans, being life insurance plans, offer tax benefits2 under section 80C and section 10(10D) of the Income Tax Act, 1961. As per section 80C, the premiums you pay are deductible from your gross total income, up to Rs. 1.5 lakhs per year. And as per section 10(10D), the payouts made under the policy are fully tax-free.

The only downside of a guaranteed1 income life insurance plan

There is only one potential downside of a guaranteed1 income plan. It does not offer inflation-beating returns. This is true with all guaranteed1, low-risk financial products. That said, you can use a guaranteed1 income life insurance plan to set off the risk from any other high-risk-high-reward product in your portfolio. So, this potential downside can actually be a blessing in disguise.


So, the bottom line is that a guaranteed1 income plan has a wide range of benefits that you can take advantage of. If you are looking for a single financial product that can protect your loved ones and simultaneously give you assured income for the long term, this kind of life insurance plan ticks all the boxes.

After weighing the finer details, if you think a guaranteed1 income plan is the right fit for your needs, you can simply visit the website of your preferred insurance provider and make your purchase online itself.

¹ Provided all due premiums are paid.
² Tax benefits are subject to changes in tax laws. Kindly consult your financial advisor for more details.
ABSLI Assured Income Plus(UIN: 109N127V05) is a non-linked non-participating individual life insurance savings plan.


Trending Articles

Popular Articles
View All

Savings Products

ABSLI Assured Income Plus

Invest for a short term, get guaranteed returns for a long term. UIN 109N127V05

  • Guaranteed3 returns on your investment
  • Long term regular income
  • Tax Benefits1

ABSLI Savings Plan

Get life cover and build a substantial corpus to ensure a secure financial future for your loved ones. UIN: 109N088V02

  • Additional Sum Assured on accidental death
  • Bonuses2 to boost your savings
  • Guaranteed3 Additions

ABSLI Vision LifeIncome Plan

Get life cover till the age of 100 as well as an assured income to achieve your financial goals UIN: 109N079V05

  • Get flexibility to receive payouts
  • Life cover till age 100 years
  • Minimum entry age is 30 days

ABSLI Guaranteed Milestone Plan

Guarantee your family’s happiness with life insurance and a savings corpus that fulfils their needs. UIN: 109N106V10

  • Fully guaranteed benefits3
  • Guaranteed3 Additions to boost your corpus
  • Sum Assured of 15 times the annual premium

ABSLI SecurePlus Plan

Secure your finances with life insurance cover and the advantage of a second income stream UIN:109N102V05

  • Flexibility in selecting annual premium
  • Flexibility to choose the Income Benefits
  • Inbuilt Accidental Death Benefit

ABSLI Vision MoneyBack Plus Plan

Pay-outs at regular intervals, coupled with life protection, help you to achieve your life goals. UIN: 109N093V04

  • Financial protection of your family
  • Regular payouts
  • Tax Benefits1

ABSLI Vision LifeSecure Plan

Ensure long-term financial security for your family with this savings-focused life insurance plan. UIN: 109N087V04

  • Life Cover till age 100 years
  • Maturity benefit at the end of policy term
  • Regular bonuses2

ABSLI Monthly Income Plan

Enjoy the twin benefits of adequate life cover and a tax-free monthly income till maturity. UIN: 109N122V02

  • Bonuses2 to augment your savings
  • Choice of Level and Increasing Income Benefit Options
  • Monthly income benefit

ABSLI Income Assured Plan

This plan offers life insurance cover and an assured monthly income for you and your family. UIN: 109N089V06

  • Assured monthly income
  • Life cover
  • Tax Benefit1

ABSLI Vision Endowment Plus Plan

This plan pays out regular bonuses and offers return of premium at maturity. UIN: 109N092V04

  • Accrued regular bonuses2
  • Choice of 2 death benefit options
  • Minimum entry age is 30 days

ABSLI Jeevan Bachat Plan

Get triple advantage of life cover, guaranteed returns and tax benefits. UIN: 109N107V03

  • Guaranteed3 benefits on death or maturity
  • Inbuilt accidental death benefit
  • No medical tests

ABSLI Assured FlexiSavings Plan

Unlock the flexibility to withdraw and lock in guaranteed returns along with a life cover. UIN 109N126V03

  • Guaranteed3 returns on your investment
  • Flexibility of unlimited withdrawals
  • Tax Benefits1

ABSLI Vision LifeIncome Plus Plan

Get guaranteed regular income, cash-in-hand even while paying premiums PLUS life cover up to a maximum of age 100 UIN: 109N131V01

  • *Guaranteed regular income for a period you choose
  • Option to get cash-in-hand even while paying premiums
  • Life cover up to a maximum of age 100

ABSLI Assured Savings Plan

Get life insurance cover and savings benefits to safeguard your family members incase of financial crisis (UIN: 109N134V03)

  • Guaranteed3 benefits on death or maturity
  • Loyalty Additions that boost your maturity corpus year on year
  • Multiple policy & premium payment term options

Need help in buying life insurance?

I agree to the Terms of Usage and Privacy Policy and authorize Aditya Birla Sun Life Insurance Company Limited and its associates to call/SMS/Email/WhatsApp me.

Thank you for your details. We will reach out to you shortly.

1800-270-7000 or reach out to us on this number.

Thank you for your details. Currently we are facing issue in our system.

1800-270-7000 or reach out to us on this number.