Guaranteed is a very comforting word, especially when it comes from a credible source. You may have heard this word often in routine conversations or at the neighbourhood store when the salesman tried selling you an appliance or a gadget. When these verbal assurances are backed by a document issued by a legitimate, reputed authority, it gives you peace of mind that the guarantor will step in if things go wrong. Similarly, returns are guaranteed in some of the life insurance plans, and hence, they are known as Guaranteed Savings Plan.
What are Guaranteed Savings Plan?
Guaranteed Saving Plans are life insurance plans that offer guaranteed maturity benefits. These plans not just offer a guarantee on the maturity value but can also offer protection of your financial goals in case of a mishap.
So, if your life continues without hiccups and you continue with the plan, your family is assured a specific maturity value. However, even if you cannot be there to continue with the plan due to early demise, the plan will be in force. Thus, giving your family the maturity value, you intended even after your death.
Guaranteed Savings Plan and Guaranteed Income4Life Plan from Canara HSBC Oriental Bank of Commerce Life Insurance are two such plans. In this plan, you can choose premium protection option, which enables the insurer to continue the policy on your behalf, if anything happens to you.
When is a Guaranteed Savings Plan Helpful?
What do you think of when you visualize your future? The future is unpredictable despite all the plans you make and dreams you cherish. You aspire to take care of your ageing parents, dream of helping your child with the best education and hope to lead a comfortable life with your spouse before and after retirement.
If you have a lot of financial commitments, you may refrain from taking any chances where the risk is higher. Any wrong moves can affect your dependent parents, your spouse, and your kid.
Here are three such situations, where you would like all guarantees, especially when it comes to financial matters:
1. Child’s Higher Education Goal
You want your child’s education to continue without any hiccups and interruptions. Child insurance plans can help you ensure this continuity. A child insurance policy has single purpose-to help your child achieve the goal, even if you cannot be there to ensure the same.
If you want to stay away from the stock market, you may buy an endowment plans that offer a guaranteed maturity value. This assures you of the amount you will receive at the end of the term. These policies have a limited premium paying term too, so that you do not have to keep paying the premiums throughout the policy tenure.
For example, if your child is 5 years old, and you buy a child insurance plan of 15 years term, you can opt to pay premiums for, say, 10 policy years, i.e., when your child turns 15. From the age of 18 years, they can receive annual pay outs to help them finance their education.
Also, on maturity, you will get the Guaranteed Sum Assured + accrued bonuses, if any. You may use this amount for post-graduate education or marriage.
2. Financial Safety Net for your Spouse
Guaranteed Savings Plan is a comprehensive financial instrument designed to meet multiple objectives such as protection, wealth creation, tax benefits, and a range of other benefits. In case of untimely demise, the family gets higher of the following as a lump sum amount:
a. 11 times the annual premium
b. 105% of premiums paid until the death
c. Sum Assured
This assurance will help you remain stress-free and ensure that your spouse gets a lump sum amount that should financially secure their future expenses. Also, if you have taken on any debt, the maturity benefit will help your family payoff the debt.
3. Financial Support for Parents
With increasing uncertainties in health, it is natural to be concerned if you are the sole breadwinner in the family. Your aged parents may also be dependent on you for financial support. Guaranteed Income4Life Plan is a life insurance cum savings plan that is suitable for you, if you are looking for an income stream to match a future expense, such as post-retirement. You can choose a specific period (say 10 years) and defer the pay outs by another 5 years. You can also opt to receive the future regular income pay-outs as a lump sum calculated as the current value of the amount.
The policy also offers some additional features under premium protection option. Premium protection will financially secure the goal in case of your death or disability within the policy tenure. Some key highlights of this plan:
a) Future premiums are waived off in case of untimely demise or permanent disability.
b) In case of untimely demise, the family will receive the sum assured immediately. The family will receive the fund value at the time of maturity-either in regular income streams or as a lump sum.
Guaranteed Savings Plan is ideal if you have low risk appetite and you are looking for a sustainable income flow to support your dependants and achieve your life goals. Guaranteed maturity benefits can help you plan your finances well in advance. Also, it is a thoughtful way to take care of your loved ones. Explore various saving plans online and assess your financial circumstances, need and expenses before finalising on a plan for yourself.