Guaranteed Return Plans

Best Guaranteed Return Plans in India

Disclaimer: Policybazaar does not rate, endorse or recommend any specific insurance provider or insurance product offered by any insurer.

Eligibility

Guaranteed Income Plans are designed for salaried people who fall in the age bracket of 18 – 60 years. Policy term for them extends from 10 to 30 years.

Comparison Between

Fixed Deposits, Guaranteed Return Plans & Debt Mutual Fund

Guaranteed Return Plans, Fixed Deposits &
Debt Mutual Fund

Guaranteed Return Plans

Returns Before Tax

7.5% ^(TAX-FREE)

Returns After Tax

7.5%

Guaranteed Returns

Yes

Life Cover

Yes

Tax on Profit

Tax Free*

Risk

No Risk

Still Better than FD’s and Debt Mutual Fund

Fixed Deposits

Returns Before Tax

7% ^(TAXABLE)

Returns After Tax

4.8%

Guaranteed Returns

Yes

Life Cover

No

Tax on Profit

Taxable

Risk

Low Risk

Debt Mutual Fund

Returns Before Tax

8% ^(TAXABLE)

Returns After Tax

5.5%

Guaranteed Returns

No

Life Cover

No

Tax on Profit

Taxable

Risk

High Risk

VIEW PLANS

*For annual premium upto ₹5 Lacs

Features of Guaranteed Return Insurance Plans in India

Listed below are some essential features of the guaranteed return plans:

• Variant of life Insurance plan that offers regular income for a specified term varying from 10-30 years

• Offers vested reversionary bonus along with terminal bonus, if any, at the time of maturity

• Provides death benefits as well as maturity benefits.

• Provides the benefit of tax exemption.

• Policy terms vary from 10-30 years.

Benefits of Guaranteed Return Plans

1. Maturity Benefit

   As an NRI/OCI/PIO policyholder, when your insurance policy matures, you'll be entitled to a basic reversionary bonus and, if applicable, a terminal bonus. If your payout period spans around 15 years, you'll receive predetermined percentages of the sum assured at regular intervals.

2. Death Benefit

   • In case of an unfortunate event of death of the insured during the premium paying term, the nominee of the policy receives the basic sum assured amount along with the reversionary bonuses and terminal bonus, if any. The payouts are carried out for the next 15 years or as mentioned in the policy. 

   • In case of demise of the insured after premium paying term or during the payout period, the nominee receives the sum assured amount along with the other benefits

3. Income Tax Benefits

   Investing in guaranteed return plans offers tax benefits under Section 80(C) of the Income Tax Act, 1961, with a maximum deduction limit of 1.5 Lakhs. This reduces your taxable income, lowering your overall tax liability.

4. Tax Benefits on Returns

   Returns from guaranteed return plans are tax-exempt under Section 10(10D) of the Income Tax Act. Your maturity amount is not subject to income tax, allowing you to enjoy tax-free returns.

5. Additional Rider

   The traditional plans come with an inbuilt rider i.e., Accidental Death Benefit Rider.
   There are some traditional insurance plans offering fully guaranteed returns compared to their counterparts. The products available at Policybazaar are guaranteed in nature. 

How Does a Guaranteed Return Insurance Plan Work?

A Guaranteed Return Insurance plan is a type of life insurance policy that provides a fixed rate of return on the premium the policyholder pays. Here are the key points on its working:

• In Guaranteed Return Plans in India, the policyholder pays a premium to the insurance company. In return, the insurer guarantees a certain rate of return over a specified period, typically ranging from 5 to 30 years.

• The rate of return offered by the insurer may vary depending on the market conditions and prevailing interest rates at the time of purchase.

• Unlike traditional life insurance policies, where the death benefit is the primary focus, the Guaranteed Return Insurance plan is designed to provide a guaranteed return on investment.

• The policyholder can choose to receive the payout at the end of the policy term or opt for regular payouts during the policy term.

• The policyholder may also have the option to surrender the policy before the end of the term and receive a lump sum payout.

When Should You Buy a Guaranteed Return Insurance Plan?

Consider these factors to buy a guaranteed insurance plan in India:

• Determine your financial goals: Like all investments, guaranteed return plans should align with your goals. Consider what stage of life you're in and what you're saving for, such as securing your child's future, creating a second income stream, or planning for retirement.

• Stable Investment Option: Guaranteed Return Plans provide a stable and predictable return on your investment. This can be particularly appealing to NRIs, OCIs, and PIOs who want to ensure a secure financial future, even while living abroad.

• Long-term savings: Guaranteed return plans are typically long-term investments, ranging from 5 to 30 years. If you're looking for a savings plan that will generate a fixed income stream over the long run, a guaranteed return plan could be an option to consider.

• Planning for retirement: Guaranteed return plans can be a suitable option for retirement planning, providing a fixed income stream during retirement without any market risks.

*Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st august 2023
All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

In Conclusion

Guaranteed Insurance Plans in India offer a secure investment option for individuals who prioritize the safety of their funds over the potential for higher returns. These plans provide a guaranteed return on investment, which can help individuals plan their financial goals more effectively.