Insurance as an industry has grown by leaps and bounds. It has evolved to give insurance and investment benefits to the customers from merely providing financial cover to the families. Apart from the life cover sum assured, there are guaranteed¹ returns provided by the life insurance companies as a comprehensive savings plan. However, we must understand how the return from insurance is calculated to make the best decision.

Why consider Guaranteed¹ Returns Plans?

A guaranteed¹ returns plan offers the dual benefits of life cover and assured returns on investment. In a this plan, the return is pre-determined. Therefore, we can calculate the exact value of the guaranteed¹ return. We can compare it with our financial commitments in the long term to decide if we can accomplish the goals with the return and choose to purchase the plan.

Guaranteed¹ return plans offer the following benefits

1. Provides life cover: The sum assured is provided to the insured person if he or she survives the policy duration and the nominees in case of a policyholder's unexpected death. The sum assured benefits can be extended by opting for various riders^#. If you purchase a plan at an early age, the premium is less. Also, if you plan for a long-term investment, the sum assured will increase. Tata AIA life premium calculator will help you understand this co-relation as you feed in details and derive the amount.  
   
   
2. Guaranteed¹ additions on maturity: There will be a guaranteed¹ bonus² provided as an addition to the sum assured. It will be based on a rate fixed for each year completed during the policy term. It can be availed as a maturity benefit or as a death benefit.
   
   The guaranteed¹ returns can have different pay-out options. 
   

• As a single lump sum amount on the maturity.
• As a lump sum amount and guaranteed¹ annual income until death.
• As regular monthly income for a fixed number of years post maturity.

Plans can be customised based on your return requirements, considering the terms and conditions of the policy. However, the value of returns is important in insurance. Let us understand how to calculate it.

How to calculate return from insurance?

Investors always believe that calculating return is imperative. However, they feel the quantum calculations involved are too proficient and difficult to understand. With a clear understanding and appropriate input values, you can always make the return calculation exact. Follow these simple and easy steps to calculate the return from insurance for your understanding. 

1. Before you start, take a quick look at your income and expenses. Find the affordable premium amount that you can pay every year. Premium is the primary factor and input for calculating returns. Tata AIA life insurance premium calculator calculates the premium value appropriately. You can explore different relevant options and find the most affordable premium. 
   
   
2. Read through the policy document carefully and find out the different charges that apply to the policy. Also, find the rate at which the benefits are calculated. Keep in mind that there are different pay-out options provided.
   
   • Lump-sum benefit (sum assured) and guaranteed¹ returns,
   • As regular income after the policy term for defined years along with sum assured,
   • As whole life regular annual income until death with sum assured.
     
     
3. The sum assured is common and can be calculated as a product of death benefit multiple and annual premiums. The multiple will vary based on the insured person's age, policy term, and the plan that you choose.
   
   

Sum assured = death benefits multiple X annual premiums.




4. For the lump sum benefit option, the guaranteed¹ maturity benefit is calculated as a product of premiums paid and a benefit factor. And the guaranteed¹ additions will be a percentage of this guaranteed¹ maturity benefit. The benefit factor and the rate at which the guaranteed¹ additions are calculated are provided in the policy document. For better understanding, it is mentioned in tables.
   
   

Purchasing in an insurance policy at an early age will have varied kinds of benefits. As the return calculation is always based on the entry age of the policyholder and the policy duration, it is highly possible to get a better sum assured and guaranteed¹ returns.



Conclusion



With the basic information, rate, and charges well detailed in the policy document, you can easily calculate the return from guaranteed¹ return plans. Use the insurance premium calculator, derive the affordable premium first, and then proceed with the calculations to find the exact returns.



Enlist your long-term financial objectives and strategise your life insurance decision based on the returns to satisfy your goals in the best possible manner. Ensure you make maximum benefits out of the policy options provided!



Check out Savings Solutions from Tata AIA Life Insurance and find the right guaranteed¹ returns plan for your needs. For any queries, you can get in touch with our insurance advisors!



L&C/Advt/2022/Nov/2977