Have you been dreaming of starting a business, retiring early or going on a sabbatical for higher education? Have you been planning for this a long time? What is the one factor that is delaying your decision? In most cases, the answer is the lack of the necessary financial assistance!
 

You may be seeking an alternative income source that serves as a guaranteed¹ monthly inflow of money and ensures that you have the necessary financial support. Where should you invest to get such a savings plan?
 

Financial service organisations provide different products to serve such financial needs. However, a life insurance product ensuring a guaranteed¹ monthly income, such as a monthly savings plan, is a good choice for many reasons.
 

What Is a Guaranteed¹ Monthly Savings Plan?
 

A guaranteed¹ monthly savings plan is a life insurance product that has life coverage and simultaneously provides you with a monthly income for a defined period from maturity. As the returns are guaranteed¹ and decided during the policy inception, you can precisely plan for your financial commitments.
 

Based on your income and financial requirements, you can decide on the premium amount and the policy term you can afford to commit to. As you pay the premium during the policy term, the guaranteed¹ income is accumulated for your benefit after maturity. This savings policy also provides beneficial features that you can customise based on your needs.
 

Salient Features of a Guaranteed¹ Income Plan
  

A guaranteed¹ income plan has been a popular financial product in the recent past. Here are some of the prominent features that distinguish it from the rest of the financial products:
 

1. Guaranteed¹ income
   
   A monthly savings plan assures a guaranteed¹ income for you after the plan matures. Based on your requirements, you can decide on the magnitude of the guaranteed¹ income. For example, if you consider it a retirement plan, you can calculate the average income that you will require based on your current spending and the inflation rate.
   
   When the plan matures, you will start receiving the income. As the returns are not market-linked, you can ascertain a fixed income as the desired monthly income. If you are looking for an excellent guaranteed¹ monthly plans, you can opt for a Tata AIA life insurance plan.
   
   
2. Multiple Benefits:
   
   As a monthly savings plan is a savings policy offered by an insurance provider, it offers the dual benefits of insurance and savings. Firstly, the life cover under the plan will provide a lump sum death benefit to your nominee in the case of your unfortunate demise.
   
   Secondly, the same policy offers a guaranteed¹ income benefit in the future. In addition to this, you can extend the benefits of life cover by choosing additional riders^#.
   
   
3. Flexibility:
   
   A monthly savings plan offers flexible features to enable you to customise the plan based on your needs. You can choose the premium payment term and the frequency of payment, whether it is monthly, quarterly, semi-annually, or annually. There is also the possibility to define the income period for the regular monthly income.
   
   You can also increase the monthly income during the policy term based on your Increased earning capacity. For example, you may start a business and buy a guaranteed¹ monthly income scheme for an alternate source of income until the business gets stable.
   
   However, with the passage of time and increasing challenges, if the business still does not provide adequate profits, you can increase the monthly income under your monthly savings plan to fulfil your financial obligations.
   
   
4. Tax* benefits:
   
   The premium amount paid and the benefits accrued under a monthly savings plan qualify for tax* deductions and tax* exemptions under Section 80(C) and Section 10(10D) of the Income Tax Act, 1961, respectively. You can avail of tax* deductions upto Rs 1,50,000 per annum under the former section and tax* exemption on the maturity proceeds under the latter.
   
   If you are the sole earning member of your family, it is your responsibility to ensure an income for their survival in your absence. And if you are planning to take a break from work, you should ensure the provision of additional financial support to keep their financial situation stable. Therefore, it becomes essential that you plan for such requirements early.
    

When Should You Save in a Monthly Income Insurance plan?
 

Investments in financial products have to be for the long term, particularly if you want the maximum benefits from them. For example, if you save in a guaranteed¹ income plan early in life, then you get the option to choose a longer policy term.
 

Furthermore, at a younger age, the extent of your financial commitments is usually low, which can enable you to invest more comfortably and freely. By paying monthly premiums, you also develop the discipline to save regularly for the future.
 

Conclusion
 

Life insurance companies in India offer guaranteed¹ monthly income plans that combine a life cover with a fixed monthly income for a specific period after maturity. The life cover serves as a protection to your family for the future, particularly in the wake of your demise.
 

In addition to the above, a monthly savings plan can help you plan for your future financial expenses. If your family is dependent on your income for their survival, you have to plan and invest in such a policy early in life for maximum protection and more returns!
 

L&C/Advt/2022/Oct/2677