Financial goals in life keep changing at different stages in life. It depends on the life stage of the family and the extent of family commitments. If you are the only breadwinner in the family, you have to properly estimate your needs for making an effective financial plan. A guaranteed return insurance plan helps you to have a savings plan for the requirements at different stages in your life. This can reduce the financial burden considerably.
What is a Guaranteed Return Plan?
A guaranteed return insurance plan is a savings insurance plan that will serve dual purposes. First, it will provide the death benefit to your nominee if you meet with an unexpected demise during the policy term. Second, it provides guaranteed returns. As the returns are guaranteed during policy inception, you can plan for a financial commitment close to accuracy.
The guaranteed returns can be available as a lump sum amount or as regular income monthly or annually. The guaranteed income benefit will be a discounted value of all the guaranteed annual income payable on maturity. The guaranteed annual income will be a certain percentage of the sum assured, and it is fixed. The percentage calculation varies between different insurers.
Here are three stages in life when a savings insurance plan can be beneficial.
- For your child’s higher education: Your child’s higher education is an important financial commitment. It is your responsibility to provide the right and best standards in education at different stages in your child’s life. You can decide on the amount required based on the type of education you are planning for your child. It will be based on the time horizon as well.
For example, if you want to send your child for higher education abroad in a reputed foreign university after ten years, you can invest in a savings insurance plan now. On maturity of the plan, you will receive a guaranteed return.
- For your retirement: Retirement planning is one of the most important priorities in your life. As the returns are guaranteed, you can decide on the amount required and fix the tenure and premium accordingly. As the savings insurance plan offers different payout options, you can use the guaranteed annual income or the regular income plan.
You can calculate the amount you require on maturity based on your living expenses and other financial goals after considering the inflation rate. With TATA AIA, purchasing a guaranteed savings plan is possible at the click of a mouse.
- Financial assistance to your dependents in your absence: Providing the necessary financial assistance to your dependents, spouse and parents is your primary responsibility. You have to ensure their financial security after your retirement and in your absence or a bad medical condition. With the insurance component in the guaranteed savings plan, you can avail of the rider options to extend the benefits.
For example, the critical illness rider benefit will ensure a portion of the sum assured payable for your medical expenses. It will reduce the burden on your dependents. In case of your sudden demise, your dependents can use the lump sum to pay off your debts and the guaranteed income as a regular monthly income for their routine requirements.
Conclusion
A guaranteed savings plan is one of the best investments for different stages in your life. You can use it for your child’s education at your middle age, your retirement expenses at your old age and your dependents’ financial security throughout your life or in your absence. So stay invested and live without financial worries
