A regular income plan is one of the most competitive products in the insurance industry serving dual benefits: insurance and savings. With more product offerings in savings plans, choosing the right one for your needs becomes extremely difficult. The type of savings plan chosen depends on how much you can save and invest, the time horizon for investment, and your target returns.
You can choose the right money-saving plan by first estimating your requirements and comparing the different options available to buy a regular income plan in India that meets your needs.
What is a regular income plan?
It is a guaranteed return insurance plan that ensures life cover and, additionally, guaranteed returns. The guaranteed returns are paid as a maturity benefit in the form of regular monthly income for a set income period.
Why should you purchase a regular income plan?
Here are five benefits of a savings insurance plan. They can help you in developing a financial plan to meet your future goals.
- Guaranteed income with protection: If you are the sole earning member in the family or your family is dependent on your income, you should ensure a steady income to meet their needs, even in your absence. Moreover, if you or your family members need a smart avenue to invest a lump sum, this money-saving plan can be an ideal choice.
- Retirement planning: During your working years, your regular income may help you meet your expenses. An increase in income can lead to a certain lifestyle. It is quite common that you would like to retain the same lifestyle even after retirement. Therefore, having a guaranteed income is essential if you do not have any fixed income to supplement.
Thus, a well-defined regular income plan will suffice your needs during your retirement phase. Further, if you start investing early through a long policy term, premiums are lower while the sum assured on death and the maturity benefit can be a huge amount.
- Safest investment: If you are looking for an investment and have low-risk tolerance, a savings insurance plan is the best choice. Even a low-risk market-linked investment plan can suffer losses due to market fluctuations. There is a certain possibility of losing money. With a monthly income plan, you can avoid such difficulties easily.
- Tax-saving investment: Tax benefits are a major reason to purchase a savings insurance With the monthly income plan, you get a tax deduction for the premium amount paid and tax exemption for the amounts received under the Income Tax Act, 1961.
- Flexible options: A regular income plan also provides flexible options to customize the savings plan according to your requirements. You can pay the premium monthly, quarterly, half-yearly or annually according to your income flow. You should aim to pay the premium on time. Also, you can decide the income period for which you want to receive the regular income post maturity of the savings plan.
There is also the return of premium option for receiving a complete refund of the premium amount paid against the policy. Based on your earnings, financial goals and risk appetite, you can modify the plan.
You can check out the TATA AIA life insurance policies with extensive features that can be tailored optimally for better personal financial management.
We have seen some of the reasons for purchasing a regular income plan. It is a comprehensive savings plan that can satisfy your family’s financial needs in the future. However, start the plan at the right time, invest more and stay invested for a long time to acquire maximum benefits in the best possible manner.