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How to enroll in a monthly income plan for good returns?

dateKnowledge Centre Team dateJanuary 27, 2021 views123 Views
How to enroll in a monthly income plan for good returns?

In today's world, everybody seeks security and stability in life; to be financially secure and stable. To live the life of your dreams, you not just need financial backing but also a steady income for the future endeavours. As you grow in the journey of life, you might find yourself in a position where you are no longer financially independent or have a monthly income source. That's when retirement hits you; you are either dependent on your children or on your savings(if any) provided that you had planned it well.

In India, by 2050 there's a report by the United Nations claiming that nearly 20% of the population will be over 60. Meaning a majority of people will be dependent on someone or something for their financial needs, the retirees will have no choice but to feed in their savings (if any). And according to a report, only a handful of 33% of the working-Indians put anything aside for their life after retirement.

It's high time for any working individual to understand the importance of saving money and investing when they still have a job and monthly pay. Yes, not just saving but also investing in good saving plans. As they say, "Don't work for money, let the money work for you." And that's exactly what you want when you retire.

One of the best plans anyone can opt for is the "Monthly Income Plan", where you can expect fixed monthly income, over a very long period which can be up to 25yrs. Seems too good to be true!

Why should you invest in a Monthly Income plan?

When we talk about savings, the majority of people think of term insurances. And to be honest term insurance never really gives you the stability you seek. Term Insurance only works in case of death or disability where the amount usually gets exhausted due to immediate expenses leaving little to no funds for the future.

Whereas a Monthly Income plan is a debt-oriented mutual fund which enables the investors to receive monthly payouts. It is a mutual fund where the investment goes to the equity and debt market in a ratio of 20:80 or other similar proportions. This investment avenue guarantees monthly income after retirement with minimal risk designed to avail financial stability in your old days.

How does it work?

The investor or the policyholder pays the premium regularly as per the premium paying term. At the end of the term, if the investor survives, they get a regular monthly payout till the end of the policy tenure as mentioned in the policy (Where the policy tenure is longer the premium payment term.). When the policy tenure terminates, the investor gets some bonus, and with the payout of these bonuses, the Monthly Income plan ends.

Whereas, if the policyholder dies during the tenure, his/her nominee will be entitled to get the monthly payouts and the premiums paid by the investor until death. As usual, the tenure terminates giving bonuses to the nominee.

Who should invest in a Monthly Income plan?

Monthly Income Plans (MIP) are for risk-averse investors those who are willing to take the minimum risk possible. MIP's are best suited to retired persons or those who are soon going to retire and are willing to invest somewhere safe.

A Monthly Income plan is for those who want to have a backup for their regular income or simply looking for a guaranteed monthly income after retirement.

What are the types of Monthly Income plan?

Essentially, there are two types of Monthly Income Plans:

  • Dividend based Monthly Income plan:- These plans provide the investors monthly payouts made out of dividends. The dividends received by the investors are tax-free.
  • Growth Based Monthly Income plan:- If you opt for this option, you'll not receive any monthly or periodic payments. When you redeem the units, you get paid along with the capitals. Although this Monthly Income Plan does not give you a steady inflow of monthly payout, it results in wealth creation.

How to find the best Monthly Income Plan that guarantees good returns?

Not all Monthly Income plans (MIP) are the same. And with the market flooded with a plethora of MIPs to choose from it can be a little intimidating to pick one. The best Monthly Income plan will have the right combination of risk and returns suited to your needs and desires.

Given are our top picks to look for while deciding a Monthly Income Plan or MIP for yourself or your family members:

  • Financial Goals:- Firstly, you need to figure out, why are you choosing the Monthly Income Plan for investment? Meaning what are your reasons for choosing so, or what are your expectations or needs that you need to fulfil via this plan. What is the duration in which you want to achieve it? Have these things clear inside your mind. This is the very first step to choose the right MIP.
  • Risk Craving:- Although MIPs are well-known for their minimal risk, usually 70% or more in the debt funds and rest in stock, there can be plans with varying proportions and risk. If you are not willing to take too much risk, you can invest in a scheme with an equity component of 10 per cent. For high-risk takers, they can go for an equity component of 25- 30% accordingly.
  • MIP's Performance:- Before selecting any Monthly Income plan, it is essential to check their past returns over several years. It would be best if you choose a life insurance plan that has shown promising growth and steady performance over the past years in the bull and bear phases.
  • Maturity Profile:- Maturity profile is the term for which you will invest in the scheme till it matures and starts providing monthly returns. Please consider this point because bonds of longer tenure may involve bigger interest risks. And it also depends on you for how long you want to invest in the scheme.
  • Expense Proportion:- The expense proportion or ratio is the amount charged by these funds to run your investment. The best plans for you could be those that have a low expense ratio. The plans with higher expense ratios will catch up on your returns.

Benefits:

The Smart Monthly Income plan by Canara HSBC Oriental Bank Of Commerce Life Insurance brings peace to you for being a trustworthy entity and packs tremendous benefits.

  • Death benefits:- After the death of the life assured a death benefit equals to Death Benefit Sum Assured [Higher of Sum Assured or ten times Annualised Premium]. Including added You shall pay annual bonus and inherit the reward for the part of the year in which death happens and final bonus(if any) subject to at least 105% of Total Premiums Paid by the policyholder (excluding extra premiums, if any) to the nominee.
  • Income Benefit:- You will receive the decided monthly income during the last 15 years of the plan or from the end of 121st policy month (not the calendar month) up to the end of the policy term. "Set-off Option:" This option is for your benefit and will help you to adjust the premiums payable during year 11 to 15 from the profit receivable in these years.
  • Maturity Benefit:- On survival till maturity, Added Annual bonuses and final bonus, if any will be paid to the policyholder.
  • Tax Benefits:- You can avail tax benefit on the premium paid subject to currently applicable provisions of Section 80C of income Tax Act, 1961. The scheme guarantees a tax-free monthly income for 15 years to accomplish your dreams and desires.

Besides these, there are tons of other benefits and perks. Leave a legacy behind by choosing one of the most trusted plans out, the Smart Monthly Income plan by Canara HSBC Oriental Bank Of Commerce Life Insurance. Hopefully, now you are convinced about why you should enrol in a Monthly Income plan and how you can do it. If you are fully pumped up already to invest in a Monthly Income plan, then you might consider checking out our top recommendation for the Monthly Income plan, which will provide you great returns with minimal risk.

Check out Canara HSBC Oriental Bank of Commerce Life Insurance Smart Monthly Income plan. We are one of the leading and most trusted entities out there, with us you can never go wrong!

This plan by Canara HSBC Oriental Bank Of Commerce Life Insurance offers guaranteed tax-free monthly income for 15 years to accomplish your dreams and desires. Alongside life cover of 25 years, and annual and final bonuses to create enough financial backup for you and your loved ones.

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Frequently Asked Questions

What is saving plan?

A savings plan is likely to be different for everyone depending on the financial goal, risk profile, returns, and investment horizon. If you are young and want to save for your retirement, ULIPs like Invest 4G or Titanium Plus plan would be the best option. You are likely to create a large corpus by your retirement through market-linked returns if you invest in this savings plan. If capital protection is your aim, then traditional insurance plans such as Guaranteed Money Saving Plan should be suitable for you.

Who should invest in a Savings Plan?

If you are looking for a guaranteed income plan, then saving plans should be on your list of investments that you are planning to make. Savings plan require you to invest a pre-decided amount on a regular basis. People with a regular stream of income who require a lump-sum amount after a period should opt for a savings plan. Working professionals, self-employed people and businessmen should consider a savings plan to meet their long-term financial obligations. Saving plans are also ideal for people who are risk-averse and want to accumulate funds through relatively safer mediums. These saving plans inculcate financial discipline in policyholders which make them crucial for every portfolio.

How much money should you put in savings each month?

The amount that should be invested in a savings plan each month depends on the income, existing financial obligations and the long-term financial goal. If you have a steady income, you should save at least 20% of your monthly income. It is not necessary to invest your entire money into a savings scheme as investments should be diversified. Ideally, you should aim to have a financial buffer of over 10 times of your annual income. Choose an income plan based on your financial circumstances to stay afloat.

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What is the difference between saving and investing?

Saving is the money that you keep aside for emergencies or for buying any big-ticket item. Investing means growing or multiplying the wealth that you have by buying savings plan, or any other assets. Buying a savings plan will help you in achieving your investment goals such as retirement, your child’s higher education or marriage, or for buying a new house.

Which savings plan is best for retirement?

The Invest 4G plan with its multiple investment options and various portfolio management strategies for capital protection is an ideal saving plan for retirement. Also, Guaranteed Income4Life is also another savings plan that you can consider for building your retirement corpus as it acts as a guaranteed income plan that will provide you maturity benefits to manage your post-retirement expenses.

Which savings plan is best for long-term goals?

Smart Goals Plan is a savings plan with its unique features such as modification of the sum assured partial withdrawal and fund switch can help you plan for your long-term financial goals. Canara HSBC Oriental Bank of Commerce Life Insurance offers a wide variety of saving plans that you can invest in as per your risk appetite and investment goal.

Which savings plan is suitable for girl child?

The Future Smart unit-linked plan from Canara HSBC Oriental Bank of Commerce Life Insurance is the ideal savings plan for the girl child. Monthly Income Advantage Plans are also a good option if you are planning to invest in a savings plan for your girl child.

Where should I invest my money?

You should spread your investments across financial instruments. However, having the best savings cum guaranteed income plan in your portfolio is extremely important. Savings plan ensures financial stability and also helps in fulfilling short, medium and long-term monetary goals.

What is a monthly income advantage plan?

A monthly income advantage plan ensures that you lead a stress-free life with your loved ones as it provides a life cover along with giving you guaranteed monthly income. In short, it is a life insurance and income plan that will financially secure commitments made to your loved ones. Canara HSBC Oriental Bank of Commerce Life Insurance Guaranteed Income Advantage Plan is a monthly income advantage plan that provides life cover for the entire term while you pay premium only for a limited period.

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What is a good age to start saving money?

When you plan to invest in a financial product, it always pays well to start early. The earlier you start saving and investing, the better. When you start investing early, the capital gets adequate time multiply. Even a small amount invested for a long time can give substantial returns due to compounding in a savings plan. Invest in an income plan as early as possible to build a significant corpus that will later help you in life. Ensure that you buy the best saving plan in India that can be aligned with your investment goals.

Should you use a savings plan for retirement planning?

Yes. Retirement planning is one of the most important financial decisions of our lives. The best saving plan offers a host of features that may help you build your retirement corpus. Some of the saving plans like Guaranteed Income4Life offer guaranteed returns at policy maturity. Such returns can act as a regular income stream even after your retirement to help you stay financially stable.

Are saving plans beneficial for managing unexpected expenses?

Yes. Best saving plans in India offer partial withdrawal system that can be utilized during your rainy days. Being financially prepared to tackle such odds will help you manage any unforeseen expenses in a smooth manner. Buy a monthly income advantage plan that will generate a steady source of income for you to take care of both long-term and short-term financial goals.

How to save tax by using savings plan?

Saving plans are known for helping us achieve our financial goals. Best saving plans allow you to grow your wealth while providing life cover. Saving and investment plans are also beneficial for tax planning. Premiums of savings cum protection plans come with tax benefit under Section 80C of the Income Tax Act. Moreover, proceeds received upon the death of the policyholder or upon the maturity of the policy are tax free under Section 10 10(D).

What is the right age to start saving money?

When you plan to invest in an income plan, it always pays well to start early. The earlier you start investing in a savings plan, the better. When you start investing early, the appreciation in capital is significant. Even a small amount invested in the best saving scheme for a long time can give substantial returns due to compounding. Buy the best savings plan as soon as you start earning to achieve all your milestones on time.

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How a savings plan can help in building your child’s education fund?

Saving plans help in building wealth over time against the investments that you make. Buy the best savings plan to build an education fund for your child. The best saving plan for kids offered by Canara HSBC Oriental Bank of Commerce Life Insurance eases the stress of planning your child's future by providing a lump-sum payout on the investment. Consider investing in a monthly income advantage plan to assist you in fulfilling your financial goals.

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How Savings Plans by Canara HSBC Oriental Bank of Commerce Life Insurance can help you?

Every person has a unique reason to save and invest. With ULIP savings schemes, the company caters to people seeking wealth creation through capital appreciation. Contrarily, the traditional plans can help you save for important life goals without worrying about the fluctuation in fund value. All major savings plan offers partial withdrawal facility that can help you take care of unplanned contingencies. With savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance, you get adequate flexibility while investing and receiving the savings benefits, which makes them a good investment choice for investors looking for income plans.

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