Why choose a guaranteed savings plan

A guaranteed savings plan is a traditional life insurance product which also helps to achieve your savings goal with the least possible risk.

Author:IndiaFirst Life | Date:11 Jul 2021 | Time:19:30:00

Read More 19273 Views

When it comes to investing your hard-earned money, you need to ensure that your money will be put to work for you in the most optimal way possible. The goal of investing is to make maximum returns while staying within your risk appetite.
Gone are the days when earning a fixed monthly salary was enough to cover your daily expenses and put some of it aside as savings. Today, saving what you can spare is no longer enough.

Your money must grow. However, it is also important that your savings are not placed at risk. If you are looking for an investment plan that offers maximum returns with minimum risk, a guaranteed savings plan is the one for you.

What is a guaranteed savings plan?

The word 'guaranteed' is a strongly positive one. It symbolises something that you cannot lose under any circumstances. A guaranteed savings plan is a life insurance product that offers life insurance cover and fixed returns that are not linked to market fluctuations.

A guaranteed savings plan is a traditional life insurance instrument that also serves to help you achieve your savings goal with the least possible risk. With a guaranteed savings plan, you can bank on life cover and guaranteed pay-outs at a fixed frequency. The guaranteed savings plan policyholder can choose to receive the fixed pay-outs in the form of monthly, quarterly, or annual pay-outs to be paid after a predetermined period.

Once the policy reaches maturity, the policyholder receives a guaranteed monthly income plan pay-out similar to a monthly salary for a fixed number of years. While purchasing the guaranteed monthly income plan, you can choose your policy term, premium paying term, vestment age, and pay-out frequency.

As you walk through different levels of life, you will come across many time-sensitive goals which you cannot compromise on. For instance, if your child needs funds for educational expenses or you want to purchase a home. These expenses are substantial ones that you cannot put off for a long time.

At this juncture, imagine the ease of having a guaranteed savings plan that is ideally placed to give you the influx of money that you require. With the right guaranteed savings plan, you can bank on guaranteed benefits to make your dreams come true.

What does a guaranteed savings plan offer you?

There are many reasons you should consider adding a guaranteed savings plan to your financial portfolio. However, before buying a guaranteed savings plan, the primary thing to consider is 'what's in it for me?'

The additional money that comes in periodically from a guaranteed monthly income plan is just the most tangible benefit of opting for a guaranteed savings plan. Here's a quick look at what a guaranteed savings plan offers you.

Peace of mind

A guaranteed savings plan or a guaranteed monthly income plan is a life insurance product at its heart. As a life insurance plus savings instrument, a guaranteed savings plan offers you life cover for the duration of the policy term.

While your guaranteed monthly income plan remains in force, your life is covered against any untoward eventuality. The premiums that you pay toward s the guaranteed savings plan also get used to cover your life. In the case of the policyholder's untimely demise during the policy tenure, the nominee stands to receive a substantial death benefit which is assured when purchasing the guaranteed savings plan.

Maturity benefit

In a pure protection term plan, the policyholder pays a fixed nominal premium to enjoy life cover for the duration of the policy. However, there are no maturity benefits to be earned if you survive the policy tenure—owing to this, term plans tend to be cheaper than other life insurance instruments. With a guaranteed monthly income plan, not only is your life covered for the policy tenure but you also get guaranteed maturity benefits in the form of periodic pay-outs at your chosen frequency.

Limited payment terms

For a guaranteed monthly income plan or guaranteed savings plan, there is a period during which you pay premiums and a vesting age upon which the pay-outs back to you begin. With a limited period guaranteed monthly income plan, you get to pay premiums for a limited time or even in one fell swoop as a single payment while you continue enjoying life cover for the entire term and periodic pay-outs after you reach the vesting age.

Flexible pay-out options

Depending on which stage of life you are in, you may require a lump sum of money to pay for a significant life expense. Alternatively, you may be looking at replacing your monthly salary or professional income. Keeping the sheer variety of policyholder requirements in mind, most guaranteed savings plan feature flexible pay-out options.

For example, you can choose a guaranteed monthly income plan to receive a fixed sum every month—this is a good option for those hoping to create an alternative source of income, particularly post-retirement. Other guaranteed savings plan options offer a lump sum amount that can be reinvested or used as a corpus.

Tax benefits

Similar to other life insurance products, a guaranteed monthly income plan also offers some tax benefits. Typically, the premiums paid toward a guaranteed savings plan can be claimed under Section 80C of the Income Tax Act of 1961. However, tax benefits are liable to change depending on the prevailing income tax laws in the country.

Loan facilities

Most guaranteed savings plan options allow you to avail of a loan equal to 80-90% of the policy's surrender value after the policy attains paid-up value. So, if you are stuck in a financial emergency, you may not need to break into your savings to get immediate help during a crisis. Instead, your guaranteed savings plan can work as a backup option—use your paid-up policy to avail of a loan to help you tide over a tough time in your life.

No surprises

With a guaranteed monthly income plan, you already know how much you will be earning at the end of the policy term. There are some government fixed income plans that offer a fixed interest rate. However, the interest rate could go up and down every quarter depending on what the government announces. With a guaranteed savings plan, you do not need to worry about your returns being affected by the market or the government. In a guaranteed savings plan, what you see is what you get.

IndiaFirst Life Guarantees

No matter what your life protection and savings goals, IndiaFirst Life Insurance has a guaranteed savings plan to fulfil your financial needs. The IndiaFirst Cash Back Plan offers the benefits of long-term investment with limited premiums and guaranteed pay-outs at regular intervals.

As a non-linked, participating, limited premium plan, the IndiaFirst Life Guaranteed Monthly Income Plan also offers an optional gap year, bonuses announced and guaranteed monthly pay-outs during the income period.

The IndiaFirst Life Long Guaranteed Income Plan features a definite income option for guaranteed pay-outs for 20 years and another option for whole life income till 99 years of age. You can also choose to customise your benefits with the IndiaFirst Guaranteed Benefit Plan via the Income Benefit Option.

Choose your guaranteed savings plan after considering all the benefits and facilities being offered by the insurer.


IndiaFirst Life

Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 663 crore, is one of the country's youngest life insurance companies. Our key differentiators are our simple, easy-to-understand products that are fairly-priced and efficiently serviced.We offer a diversified suite of over 46 need-based products & Riders (as of 31st March 2022) catering to varied customer segments, leveraging multiple distribution capabilities and augmenting various investment options. In all, propositions under the categories of Protection, Assured Savings, Wealth, Pension, Health and Group Funds for Employee Liabilities form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and competitively priced with risk management being our core strength.

Showing 1 to 75 of 140 entries.