All of us strive to save money throughout our lives so as to have financial stability once we retire. To attain this goal, we consider different savings plans to park our savings in a beneficial avenue. However, money management can give rise to various challenging scenarios. For instance, your financial commitments towards your family may be on the higher side, or there could be a lack of financial planning to deal with uncertain life events.
 

Therefore, plans with regular income payouts have become popular. People are increasingly preferring a regular income payout plan rather than one that offers a lump sum benefit. As a result, insurance providers have introduced comprehensive life insurance policies that offer savings and regular income benefits along with a life cover!
 

What Is A Savings Insurance Plan?
 

A savings insurance plan is a comprehensive life insurance policy that provides a life cover and guaranteed¹ returns on maturity. Here are the basic features of the product:
 

1. The life cover ensures a death benefit for your family in case of your unexpected demise during the policy term. The benefits can be further enhanced by opting for additional riders^#, such as the accidental death rider^#, terminal illness rider^#, critical illness rider^# etc.
   
   
2. The guaranteed¹ returns under the plan are provided to you when the plan matures. There are different payout options that you can choose from, namely a lump sum benefit, regular income benefit, or a combination of the two.
    

Let us discuss in detail how a regular income plan works and how you can draw the best benefits from it.
 

How Does A Guaranteed¹ Regular Income Plan Work?
 

A regular income plan has three important aspects, namely the premium, the policy term, and regular income. These aspects are decided during the policy's inception. However, it is subject to revisions during the policy renewal process. Let us discuss these individual aspects in a little detail:
 

1. Regular Income: You can decide the amount of the regular income you need based on your financial goals. For instance, if your investment in an assured savings insurance plan is for your retirement life, you can focus on the regular monthly income necessary for survival. It can include the cost of groceries, utility bills, medical expenses, etc.
   

   
   On the other hand, if the regular income is planned to pay for your child's school or college fees, you can derive an estimate of the amount required in advance. You can avail of the regular income either monthly or annually. Furthermore, you can define the income period for the regular income, for instance, 20 to 50 years after the policy term ends.
   

2. Policy term: Policy term is crucial for your savings plan. It is always said that the longer you stay invested in a plan, the better are the returns. Hence you must make it a point to start investing in a savings plan early in life so that you can opt for a longer policy term.

   
   You are likely to be able to afford more amount for investment at a younger age as your family commitments may be lower than later in life. If your policy term is longer, you will also benefit from opting for a longer income period for the regular income plan.
   

3. Premium: Premium is one of the most important aspects of your regular income plan, and it is determined on the basis of the regular income required, sum assured for the life cover, and the policy term. You can choose to pay the premium as a single payment, as instalments for a limited period, or as instalments for the complete policy term.

    

   You can select the frequency of premium payment based on your income and expenses. This frequency can be a single payment, or monthly, quarterly, semi-annual, or annual payments.
    

Therefore, based on the regular income required and the policy term, you can estimate the premium amount you have to pay. Our online calculator can help you check and plan for your premium payments. This way, you can customise the regular income plan to work as per your financial requirements and capacity. You will start receiving regular income when the plan matures, provided you have made the premium payments without fail.
 

You can customise your regular income plan to suit your financial goals. For instance, with the TATA AIA savings plans, you can opt for regular income with an in-built critical illness benefit. With such a plan, the premium will get waived off when you are diagnosed with a critical illness, and you shall receive a lump sum amount as financial assistance. Despite no further premium payments, the regular income and the insurance for life cover will remain intact.
 

Who Should Opt For A Savings Insurance Policy?
 

A savings insurance policy is one of the best ways to accumulate a substantial corpus in the long term and pursue your financial goals. A regular income plan can be a good investment for people who are:
 

1. Planning for their retirement
2. Looking for an alternate source of income while starting a new business
3. Planning to pay for their child's school or tuition fees periodically
4. Going on sabbatical leave for higher studies
5. Going on a long vacation
    

Conclusion
 

Uncertain events in your life can have a deep impact on your financial status. Therefore, it is important to be prepared to accept the challenges in the best possible manner. If you feel a regular income is the way to sustain your life, then go for it!
 

A regular income plan in a life insurance policy works on the basis of your required regular income and the policy term. You must, thus, analyse your financial goals and decide the type of plan and payout options you want to opt for. As the returns under a regular income plan are guaranteed¹, it is considered one of the apt plans offering savings as well as insurance.
 

L&C/Advt/2023/Feb/0376