Guaranteed Return Plans

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Definition:

Guaranteed¹ Return Plans are insurance policies that pay guaranteed¹ payouts to the insured once the policy reaches maturity.

Description:

You look for more financial securities when you age, especially after retirement. To meet these financial requirements, guaranteed¹ return plans are beneficial. These insurance policies assure to pay monthly income or lump sum payment to the life insured when the policy gets matured.

The payout amount will depend on the insurance coverage, premium paid, and the policy period.

The guaranteed¹ return plans provide tax-free monthly income payouts. The insurance policy is a confirmed protection for the family who will receive the sum assured, in case the life insured dies within the policy term. These returns under the plans come immediately after the insured stops making the premium payment.

Guaranteed¹ return life insurance policy can be the second income source for the life insured. The policy yields maturity benefits if the insured survives the complete policy term. Other than these benefits, a guaranteed1 return plan also provides tax benefits2 under Section 80 C and Section 10(10D) under the Income Tax Act, 1961.

Example:

Sanjay took a guaranteed¹ return savings plan with a sum assured of Rs.7 lakhs. He paid an annual premium of Rs.25,000/- under the policy. The policy premium was payable for 15 years after which Sanjay was eligible to get the maturity benefit. The amount of benefit was guaranteed¹ that helped Sanjay to save Rs.30 lakhs for his daughter’s wedding. Under the guaranteed¹ return plan, the expected rate of return was specified.

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