Guaranteed Income Plan
It takes constant effort and perseverance to meet up all short and long-term financial goals at the right time. Although needs are endless, yet your financial strength can count for everything.
Hence, it is very important for an individual to maintain financial stability at every stage of life to ensure the financial security of his/her loved ones even when (s)he is not around them. Understanding the importance of financial stability, insurance companies offer guaranteed income plans.
The guarantee word is itself very fascinating, and being added to regular payouts, these plans become leverage for risk-averse investors. These plans provide dual benefits, including life insurance along with maturity benefits and guaranteed earnings in the form of yearly, monthly, or quarterly payouts decided by the policyholder at the time of purchasing the policy.
So if you buy a guaranteed income plan, you are liable to get guaranteed periodic payouts after the maturity of the policy. The amount of the payouts depends on the mentioned percentage of your main corpus (i.e. sum assured).
Who Should Go For Guaranteed Income Plans?
If you are a person who wishes to build up a significant corpus or source of regular income in your old age, then this plan is ideal for you. Any individual who falls in the age group of 18-60 years (this may change as per the respective plan) can buy a guaranteed income plan and enjoy all the benefits that come with the plan. In general, the policy term ranges from 10 to 30 years, and it is not dependent on the market’s performance.
What Benefits Do You Get From Guaranteed Insurance Plans?
- Maturity Benefit: Upon maturity, you will receive a simple reversionary benefit and start getting periodic payouts depending on the pre-decided percentage of sum assured of your plan.
- Death Benefit: In case you don’t survive the premium payment term, the nominee is liable to get the basic sum assured along with bonuses like a reversionary and terminal bonus (if any). Moreover, the periodic payouts will be given to him/her for the fixed number of years, mentioned in your policy. Or, If you die during the payout period, then the sum assured and bonuses are credited to the nominee’s bank account.
- Income Tax Benefit: The guaranteed income plan offers a tax deduction (every year) for payable premiums under section 80 C and tax exemption on the maturity proceeds under section 10 D of the Income Tax Act, 1961.
List of Some Best Guaranteed Income Plans
Max Life Guaranteed Monthly Plan
It is a money-back insurance plan, which offers a life cover with guaranteed regular income benefit for a payout period of ten years.
| Age at entry | 25-60 years |
| Maximum maturity age | 66 years |
| Premium payment mode | Annually |
| Policy term | 6 years or 12 years |
| Minimum annualized premium for a 6-year policy term | Rs. 75, 000 |
| Minimum annualized premium for a 12-year policy term | Rs. 20, 000 |
| Maximum annualized premium for both 6 and 12 years policy term | No limit |
Benefits
- On completing the premium payment term, the policyholder will receive guaranteed monthly income for the next 10 years.
- After completing half of the 10-year payout period, the policyholder will get double monthly income.
- In case of death of the policyholder, the nominee will get the lump sum.
- The policyholder is free to modify his/her monthly guaranteed income plan after maturity and convert his/her monthly payouts into a lump sum payout.
LIC New Jeevan Anand Plan
It is a participating non-linked endowment assurance plan in LIC offering insurance coverage and risk-free saving under one roof.
| Age at entry | 18 - 50 years |
| Maximum maturity age | 75 years |
| Premium payment mode | Yearly, Half-yearly, quarterly, monthly |
| Policy term | 15 - 35 years |
| Premium amount | Depends on the age of the policyholder, sum assured and term |
| Loan facility against the policy | After three years |
| Minimum sum assured | Rs. 1 lakh |
| Maximum sum assured | No limit |
Benefits
- After completing the policy tenure, the policyholder will receive a basic sum assured along with bonuses.
- In the case of demise of the policyholder, the sum assured (either 125% of the sum assured chosen by the holder or 10 times the annual premium) is payable to the nominee along with bonuses. (Note: A minimum death benefit of 105% of total premiums paid is payable to the nominee on death of policyholder)
- Under this guaranteed income plan, the policyholder can avail rebates as follows -
| Mode of premium payment | Rate of rebate |
| Yearly | 2% |
| Half-yearly | 1% |
| Quarterly or monthly | No rebate |
| Amount of sum assured | Rate of rebate |
| INR 2,00,000 to 4,95,000 | 1.50% of the sum assured |
| INR 5,00,000 to 9,95,000 | 2.50% of the sum assured |
| INR 10,00,000 and above | 3.00% of the sum assured |
Canara Smart Monthly Income Plan
It is one of the ideal plans to meet your financial goals through guaranteed income and bonuses, offered by Canara HSBC and OBC.
| Premium Payment term | 15 years |
| Age at entry | 18 - 55 years |
| Maximum maturity age | 43-80 years |
| Premium payment mode | Yearly and monthly |
| Policy term | 25 years |
| Premium amount | Depends on the age of the policyholder, premium mode and income chosen |
| Sum assured | 100 times the chosen monthly income |
| Minimum income | Rs. 2,000 per month (thereafter in multiples of 100) |
Benefits
- This monthly guaranteed income plan offers monthly payouts to the policyholder for 15 years from the end of the 121st policy month.
- After the maturity of the plan, the policyholder will receive added annual bonuses and final bonus, expressed as a percentage of the sum assured.
- On choosing a higher sum assured, the policyholder can avail good discounts on the premium amount.
SBI Life Smart Money Back Gold Plan
SBI offers this participating non-linked money-back plan to support your financial needs at crucial points in your life.
| Minimum age at entry | 14 years |
| Maximum age at entry | 45 years (for regular premium), 55 years (for limited and single premium) |
| Maximum maturity age | 70 years |
| Premium payment option | Regular premium/Limited premium/ Single premium |
Benefits
- At the maturity of the plan, the policyholder will receive a final instalment of survival benefit along with bonuses like simple reversionary and terminal bonus, if any.
- In case of the unfortunate demise of a policyholder, the nominee will receive either A or B, whichever is higher.
A: Sum assured on death along with vested simple reversionary bonus and terminal bonus, if any
- For Regular and limited premium policy: sum assured on death is 11 times of annualized premium
- For single premium policy, the sum assured on death is 1.25 times of a single premium
B: Minimum death benefit (ie. 105% of all premiums payable)
HDFC Life Sampoorn Samridhi Plus Plan
It is an endowment plan that offers twin benefits of life coverage and long-term savings for the financial security of your family.
| Age at entry | 30-60 years |
| Maximum maturity age | 18-75 years |
| Premium payment option | Yearly, Half-yearly, Quarterly and Monthly |
| Policy term | 15-40 years |
| Minimum sum assured | Rs. 65,463 |
| Maximum sum assured | No limit |
Benefits
This guaranteed income plan offers guaranteed additions, expressed as a percentage of sum assured at the time of maturity of the plan or death of the policyholder.
| Policy term | Guaranteed additions |
| 15-19 years | 3 % p.a. |
| 20-24 years | 4 % p.a. |
| 25 years or above | 5 % p.a. |
At the time of maturity of the plan, the policyholder will receive -
- Sum Assured
- Accrued Guaranteed Additions
- Accrued Reversionary bonuses
- Interim bonus (if any)
- Terminal bonus (if any)
The policyholder also gets some rebate on premium as follows -
| Sum assured on maturity (in INR) | Rate of rebate (per 1000 Sum Assured on Maturity) |
| 150,000 to less than 300,000 | 4.5 |
| 300,000 to less than 500,000 | 6 |
| 500,000 and above | 7.5 |
In the case of the death of a policyholder, the nominee will get the death benefit.
Conclusion
In today's situation, it is really essential to think about your savings and life insurance. Guaranteed income plan is one of the suitable insurance products, which offers life insurance with guaranteed returns. Compare guaranteed income plans online and enjoy the benefits of regular periodic payouts, bonus facility, life coverage and more.
Last Updated : June, 2020
Naval Goel is the CEO & founder of PolicyX.com. Naval has an expertise in the insurance sector and has professional experience of more than a decade in the Industry and has worked in companies like AIG, New York doing valuation of insurance subsidiaries. He is also an Associate Member of the Indian Institute of Insurance, Pune. He has been authorized by IRDAI to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.
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