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5 Ways Guaranteed Payouts Secure your Family's Needs

dateKnowledge Centre Team dateFebruary 22, 2021 views181 Views
5 Ways Guaranteed Payouts Secure your Family's Needs

Attaining and sustaining financial stability is an aspiration for numerous people in India. However, it can become a difficult job to collect a huge sum of money to fulfill all your goals and aspirations, particularly when you have just started earning. Comprehending this requirement, financial institutions like Canara HSBC Oriental Bank Of Commerce Life Insurance offer various investment and saving plans that render guaranteed payouts. These investment policies can further assist you in strengthening your financial condition along with securing the future of your family and loved ones.

Guaranteed payout investment plans are income plans that are tailored to match the obligations of investors who don't prefer to bear contingencies that arrive with market-linked returns. These monthly investment plans provide people with fixed guaranteed payouts and maturity advantages. A person falling in the age group of 18-60 and drawing a fixed salary is eligible to make investments in plans that offer guaranteed payouts. The period of such policies ranges from 10-30 years.

How can Guaranteed payouts help in securing your family's needs?

Guaranteed payout monthly investment plans present both insurance and investment payout advantage. Some further generate a fixed deposit with appended riders that serve as a protective cushion. There is an exceptional need for guaranteed payouts investment plans. According to an official report generated by the Insurance Regulatory and Development Authority of India (IRDAI), presently, only 8% of the Indian citizens have chosen guaranteed payout plans and secured the future of their family, which is a substantially low number.

Every sole earning member of the family needs to invest in saving schemes in India that render guaranteed payouts to safeguard their family from any unforeseen mishap. Here are some of the benefits of having a savings plan.

1. Earnings replacer

Guaranteed payout investment plans render fixed payouts at a pre-decided rate of interest in the assured sum chosen by the person investing and the financial institution or the insurer. The most amazing thing about these is that a person can get fixed income at various intervals like monthly, periodically, semi-annually, or annually. Furthermore, these plans can assist you in financially guarding yourself and your family, particularly past your unfortunate demise or retirement.

2. Budgeting your funds

Another advantage of investing your corpus in a guaranteed payout monthly plan is that it can easily budget and compound your funds in a better way. You can invest some portion of your salary for meeting future expenditures like your kid's education or purchasing a house, or maybe your retirement expenses. These monthly investment plans assist in ensuring a guaranteed payout after the completion of the maturity period.

In the circumstance of the unfortunate demise of the person making investments in these schemes, the family members of such members can choose to withdraw the sum invested. Furthermore, they also have the option of receiving that sum as a fixed monthly income plan - that can work as a constant source of income for easy fulfillment of all their financial expenses.

3. Risk-free assured returns

These guaranteed payout policies always provide risk-free assured returns to people who are not willing to take any risk with their investments. Parking your funds in these kinds of fixed income plans will always ensure that you are under the minimum risk horizon in this volatile market, offering sound financial security to you and your family.

4. Tax advantages

If you choose to invest in these guaranteed payout schemes, say, for instance, you invest in a fixed payout insurance plan. Then, in that case, you will receive tax deductions under Section 80(C) of the Income Tax Act, 1961 on the payouts that are provided yearly. Furthermore, once the maturity moves forth under Section 10(D) of the act, you also receive tax exemptions.

5. Sufficing your long term and short-term goals

When you choose a guaranteed payout scheme, it is important to note that these plans fulfill all your short and long term goals as the needs and specifications of every individual are different. The Guaranteed payout monthly income plans present a multitude of benefits to the person choosing them. It further presents them with the choice of either withdrawing money in a lump sum or small monthly installments. This enables you to save money to accomplish both long-term and short-term goals.

Top guaranteed payout investment plans in India

A perfect fiscal investment plan with the guaranteed payouts is the most important component that enables you to fulfill all your long-term and short-term goals. However, before choosing a guaranteed payout yearly or monthly investment plan, you must consider all your personal situations and risk-taking capacity.

A guaranteed payout investment plan should split your monetary aims and requirements into time-specific goals. Mentioned below are some savings schemes in India that you can consider investing in for receiving fixed or guaranteed payouts.

  • Savings bank accounts

    A savings bank account is the most prevalent and conventional form of a monthly investment plan that can render guaranteed payouts. While the mediocre repo rate of a savings bank account is around 2 to 4%, it can be easily ensured that these guaranteed payout schemes do not get affected by the prevailing market volatility, assuring that your principal investment amount is safe, and so is the future of your family.

  • Realizable liquid funds

    Liquid funds are a type of mutual debt fund and are extremely open-ended income plans. These guaranteed payout schemes invest funds for the short-term that render fixed-interest with the assistance of money market instruments.

    If a person invests in highly liquid funds, they can hold easy access to the amount invested. Moreover, they get lucrative returns. These funds are the most beneficial monthly investment plan to receive guaranteed payouts and hence to secure the future of your family.

  • Equity Linked Saving Schemes (ELSS)

    Equity Linked Saving Schemes is yet again one of the best monthly income schemes in India that you can choose. These schemes invest 60 percent of your amount in equity funds and are completely tax-free. ELSS holds a three year lock-in period that enables you to multiply your funds without any impediment as there is zero redemption allowed.

    Post completion of this 3-year duration, you can sell these equities and use them for your expenses. A person can further make decisions depending upon their goals and the returns they are getting from these investments.

  • A fixed deposit (FD)

    Another excellent, guaranteed payout investment scheme is Fixed Deposit. It is one of the most secured and guarded investment alternatives that can be opted for a period of 3 years and renders fixed and guaranteed payouts. A fixed deposit always gathers higher returns for investors who are risk-averse.

    Furthermore, investing in a fixed deposit scheme is very easy, and the renewals render you with the advantage of interest compounding. When investing in a fixed deposit scheme, you need not fret regarding market volatility as the principal amount will always be secured. Along with all these benefits, you can receive a guaranteed return on investments beneficial in securing your future and accomplishing all your long term and short term goals.

  • Fixed maturity plans (FMPs)

    Fixed Maturity Plans (FMPs) are again the scheme that presents guaranteed payouts. These schemes invest your funds in close-ended debt mutual funds, the maturity period of which can be extended up to 5 years. These schemes offer the most lucrative returns and come with added tax benefits. You can always invest in this scheme for securing your family's requirements.

  • Treasury bills

    The government issued treasury bills are yet another way of receiving guaranteed payouts. You can choose to avail these treasury bills or bonds for a short term period like three years or for a long term duration like ten years. These treasury bills are completely secured from the market fluctuations and volatility and hold various maturity periods like 91 days, 182 days, or 364 days. Treasury bills are always presented at a discounted rate. However, they are always redeemed at the existing face value, which offers a more secured and lucrative rate of return.

    During the present times, there are a lot of expenses on healthcare, education, and other kinds of stuff. Investment products with guaranteed payouts can help stabilize your financial future. As there are hundreds of guaranteed payout investment plans available in the market, it is important to compare saving plans and then pick one as per your requirements.

If you are perplexed about your selection, you can choose Guaranteed payouts investment schemes like a fixed deposit or Equity Linked Savings Scheme that can secure the future of your family and fulfill all your requirements. Alternatively, you can connect with a financial advisor who can guide you with the required steps while choosing a monthly investment scheme that offers guaranteed payouts.

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Frequently Asked Questions (FAQs) for Term Insurance

This being a term plan doesn't offer any payout after maturity or expiration date.

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 70 years of age.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, a term plan pays a part of the sum insured to treat your disease.

Term insurance riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term policy remains active until the expiration date.
  • Income Rider: The rider ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while buying Term Insurance?

  1. 1. Amount of premium you have to pay based on your age, habits, education, and monthly income
  2. 2. The total number of benefits covered in the term plan. Do they include benefits that you care about the most?
  3. 3. How to save money on tax if you pay for the term plan?
  4. 4. Do they offer regular income options?
  5. 5. Can you change the coverage and premium in the future?
  6. 6. Does the claim consider valid if death occurs outside India?
  7. 7. Which kind of death is not covered by insurance?
  8. 8. Can NRIs take term insurance? If yes, what are the conditions?
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