Have you heard of guaranteed life insurance? It is a preferred choice for those seeking stability in their financial portfolios. In fact, a guaranteed life insurance payout is one of the biggest attractions of these plans. These plans work as a reliable and convenient safety net when times are uncertain, while enabling higher peace of mind accordingly.
In this article, you will learn a little more about these plans.
How Guaranteed Life Insurance Works to Ensure Mental Peace
When it comes to guaranteed life insurance plans, there are several features that make them suitable for consumers.
1. Guaranteed life insurance plans offer a combination of assured returns and life cover. This means that if anything happens to the main policyholder, there is an assured guaranteed life insurance payout that is given to his/her nominees. It helps considerably in terms of enabling the family to meet costs, repay debts, and take care of future goals even when the main earning member is not around.
2. One of the best features of these policies is their fixed and stable returns. There are no market-linked fluctuations to worry about in any case. The investment is safeguarded and the guaranteed returns are known at the beginning of the policy itself.
3. These returns are paid out in the form of steady income after the policy matures. These returns can be locked in for 10-20 years, similar to some annuity and fixed deposit-based investments.
4. The tax-free status of maturity proceeds under Section 10(10D) applies only if the sum assured is at least 10 times the annual premium. If the annual premium exceeds ₹5 lakh for policies issued on or after April 1, 2023, the maturity proceeds may be taxable unless it is a pure-risk term insurance plan. Additionally, premiums paid are eligible for tax-deductible under Section 80C, but only if the sum assured is at least 10 times the annual premium.
5. Some plans also offer income benefits that start after pre-determined periods rather than at the end of the entire maturity period. Policyholders may also get the option to choose between lump sum returns or a regular flow of income every month or year. They can choose this at the start of the policy.
6. Thus, these plans offer a stable and secure source of income without worries about fluctuating market conditions. However, while these plans are a suitable option for risk-averse investors, their returns may not always outpace inflation.
Choose Guaranteed Life Insurance Plans for Maximum Benefits
You should go ahead and select a guaranteed life insurance plan above all else. This is because it will help you prevent investment risks and get locked-in returns for the future. You can use these funds to meet daily costs, build an income stream, invest further, or even meet your needs after retirement, depending on your specific needs. There are tax benefits under Sections 80C and 10 (10D) as well.
However, make sure the plan syncs with your future goals, including the policy duration, lock-in period, surrender value terms, and premium affordability. Once these factors are sorted, you can go ahead and invest in these plans. After all, what better way to gain mental peace and assured payouts than with a guaranteed life insurance plan? The best part is that it gives you adequate life coverage, too.
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