Banking and financial institutions are now introducing a guaranteed income savings plan which works in smart ways that not only protects your income but also helps in saving money for the future. These are also called smart income protection plans because these are tax free and it guarantees a regular income benefiting at the rate between 10%-12% of sum assured or paid up capital assured with these institutions.
Guaranteed traditional saving plans
The leading new generation banks are coming with the new establishment of such plans to increase savings between the families so that people can earn more income while they are saving money for retirement. Guaranteed traditional saving plans are now available offering tax free regular income. In real terms these plans guarantee the best rate of income based on the sum assured for a long duration of years that can sum up to 10-20 years. The generated income is paid after the maturity of smart income protection plans which enables people to get lump sum money in the future plus they get the regular guaranteed payouts after the same defined period. These plans satisfy risk free investors.
These plans are designed in order to cater for a large part of Indian population. It is made for people who are content with risk free savings yields that offer guaranteed returns and these plans are at their best in delivering regular income as well as lump sum payouts to its consumers. On the other hand, banks and financial institutions are availing a wide range of smart and simple life insurance solutions just like these saving plans to attract customers for more saving experiences. Therefore, now it is the customer ‘s choice to determine its best saving plan. More and more private companies are also coming up with special designed plans which also convey the same relationship with investors.
Smart income protection plan
Smart income protection plan caters to people’s future needs. People need it most to secure life after retirement. Post retirement, there remains no earning source so these plans act as the best solutions which also manage other futuristic needs. Also, child future expenses can be met easily when these plans are in action because of its guaranteed regular returns. The plan is very simple as it denotes the payout of lump sum money at maturity whereas it also communicates the idea of guaranteed payouts for the next 15 years after maturity. In the case of the plan holder’s death, the registered nominee gets all the benefits along with the sum assured and bonuses.
Nowadays, the plans have become flexible meeting the exact needs of customers. These are designed while keeping the requirement of people in possible terms just like there are now premium payment plans concerning for more than 5 to 10 to 15 years based on the required income stream and the premium payment capacity of the customers. These plans meet the future needs in the desired way as specified by the customer while signing the contract or application of terms. These are also the guaranteed plans which promise lump sum returns in future. Plus, these customers can also avail other advantages combined with enhanced protection of services which may include accidental death benefits and total or permanent disability benefits.
Functionality of the guaranteed income savings plans
The functionality of these guaranteed income savings plans is explained in simple terms.
First of all, it helps policyholders in securing post retirement money and expense needs. It can be looked out as a policyholder of any age invests in the guaranteed income savings plan each year for the next fifteen years. At the time of maturity, he will receive a lump sum amount i.e. projected at some percent as agreed between both the parties. Afterwards, he or she will receive tax free annual payouts for 10 to 15 years after the period of maturity. During his premium payment term, in case any unfortunate uncertain event or situation occurs then his nominee or legal heir receives the sum assured amount whichever is governed.
It is advised to investors to refer to the product brochure before signing for any such plans because it has been found that these plans do not guarantee returns as specified in the details. This means that consumers get affected by the hidden details which are not presented at the time of detailing such plans to them. In the absence of such information a customer gets attracted to the features of plans and he forgets to know more in detail and what happens is that he does not get returns as promised before applying for the plan.
The agent can approach you with an attractive investment plan that may offer 10 % guaranteed annual income plus much more guaranteed benefit. He may also assure to present these things in a writing contract but it is very much important to find out whether these guaranteed returns are based on the fund value or the sum assured of the policy period. You must ask the details of money you will be getting while investing in such plans so that you can get assurance about the returns before the startup of any such income savings programs.
