Income is one of the goals which take the major chunk of our personal effort and time since birth. Then again, if you are to rely only on your earning capacity for this income, you will find yourself earning only for a limited time in life. That is unless you start saving and investing your money for growth and income safety. A lot of smart investors consider putting their money in saving plans that offer life cover along with an avenue for the growth of investment.
When you start earning, your savings make up a small part of your financial life. However, after sometime this trickling water should accumulate and form a larger pool. It is this pool that should provide you with a reliable alternative source of income.
When your financial pool grows large enough to replace your income from the profession, your income safety is guaranteed.
Figure: Your Journey from being dependent on the income from job or profession to being independent
Why Should you Invest in Guaranteed Income4Life Plan?
Here are five important reasons for you to invest in the Guaranteed Income4Life plan from Canara HSBC Oriental Bank of Commerce Life Insurance:
#1 Guaranteed Regular Income
The regular income from the plan which starts at maturity is guaranteed for the chosen period. For example, you can choose an income pay-out period ranging from 10 years to a lifetime, i.e., until you reach the age of 99.
#2 Limited Premium Pay Option
The plan does not need a long-term investment commitment from you. Regardless of the tenure of the plan you can choose a shorter premium payment (investment) period as per your convenience.
The premium payment period for the Guaranteed Income4Life plan can range from five years to 12 years depending on the maturity period of the plan.
#3 Acts as a Retirement and Pension Plan
You can use the guaranteed income pay-out feature of this plan to enhance your pension income after retirement. What more, the income can continue for your surviving spouse until your age reaches 99 even after your natural death.
#4 High Sum Assured
The plan offers a large life cover amount for your family along with the other benefits. The sum assured can be as high as 11 times the annual premium of the policy. Thus, providing an effective umbrella of safety from contingencies to your loved ones.
#5 Tax Benefits
The premiums you pay for the plan is deductible from your taxable income for the year under section 80C. You can claim a deduction of up to Rs. 1.5 lakhs under this section of the Income Tax Act.
Features of Guaranteed Income4Life Plan
Guaranteed Income4Life plan as the name suggests is a safe investment option to ensure a regular income from your accumulated money. You can invest in the plan at a pace convenient for you and decide when you want to receive the income from the plan.
Some of the prominent features which make this plan an attractive choice for income generation are:
- Safe investment: Zero market risk. Your investment only grows as the plan invests only in the safest corporate and government debt instruments.
- Long-term investment: You can continue this plan for 5 years to up to 99 years of age
- Flexible investment option: You can invest in this plan in a single instalment, or with regular sums over multiple years
- Flexible income option: You can select an income start date, length and frequency in this plan.
- Buy completely online: In today’s environment of COVID, you would want to avoid travelling to different offices. And you can buy this plan completely online.
The plan also provides you with the following safety features to protect you and your family from the impacts of unforeseen mishaps:
- Life Cover: Available to your dependents in case of your early demise
Understand how Guaranteed Income4Life Plan acts as a financial safety net.
- Premium Protection Option: Continues the investment part of the plan after the payment of the life cover amount. This option will help your dependents meet their life goals even if you are gone before fulfilling the same.
- Accidental Total & Permanent Disability: This option will continue the life cover and investment benefits of the plan without requiring additional premiums. This benefit covers your family’s financial goals if you suffer from a permanent loss of limbs due to an accident.
How to Ensure a Large Financial Pool?
Saving money to build a large enough pool for a secure income is only half the step. The second half is to invest the money in such a way that it is:
- Growing more than inflation and taxes
- Protects you financially in case of a mishap
- Available to your dependents after you
Most of the investment options allow you to meet only one of these three objectives. While you should have a mix of instruments to enjoy better growth on your money, the last two are also important.
Guaranteed Income4Life plan from Canara HSBC Oriental Bank of Commerce Life Insurance helps you to achieve the three goals at the same time.
How to Choose the Best Savings Plan for your Needs?
Two factors that should be your primary concern while selecting the best savings plan for your needs are:
1. Plan Benefits
2. The past performance record of the life insurer
While we have already seen the three types of benefits the best savings plan should offer – growth, financial safety in case of a mishap and financial safety for the family.
The second aspect about the life insurer will include looking through the following stats for the insurer:
- Claim Settlement Ratio: This shows how quickly and efficiently the insurer had been settling the death claims for life insurance policies. A ratio of above 95% is good.
- Solvency Ratio or Insurer’s Credit Rating: Solvency ratio or an A+ credit rating for the insurer means that the insurer is financially strong and can honour the investments in the rough market as well.
- Persistency Ratio: This ratio draws a picture of the insurer’s customer engagement activities. An insurer with happy and engaged customers can easily boast a higher investor retention rate (persistency rate) over the years.
Thus, you can compare the stats between two insurers offering seemingly similar benefits on their best savings plans.