Why Guaranteed Return Life Insurance Plans Are a Smart Investment for the Future?

Should you choose guaranteed return life insurance plans as a future investment plan? Many financial experts recommend these plans for those seeking predictable returns and life insurance coverage. This is because these policies offer guaranteed returns without market risks, while also providing life coverage to safeguard nominees and family members. You can use them to gain financial security for the long haul, build wealth, and meet future goals. Let us look at why they make ideal investments.

Why Choose Guaranteed Return Life Insurance Plans for Investments?

Here are some of the biggest reasons to invest in guaranteed return life insurance plans.

1. Life Coverage- These policies offer life coverage for the entire policy tenure. As a result, you don’t have to worry about your family’s financial future in case something happens to you in the interim. The insurer will pay the fixed sum assured to your family in case you pass away within the policy period.  However, the life coverage amount is typically lower compared to term insurance policies. You can select a coverage amount that helps your family combat inflation and use the funds to meet future goals, household costs, immediate expenses, and even debt repayments.
2. Flexibility- There is ample flexibility for customers in terms of choosing the coverage amount, policy term, and premium payment frequency in most cases. At the same time, you should also be able to choose the payout type and frequency of the guaranteed return in question. This helps you tailor everything to your unique circumstances and future needs.
3. Secure Returns- You can get guaranteed returns once you invest in these plans. However, it is important to note that prematurely surrendering the policy may lead to deductions or surrender charges. These returns, along with bonuses, will accumulate at maturity. This can be provided in the form of regular payouts or income that you can customise depending on your specific preferences. These returns can be compared across insurers and are guaranteed, thereby ensuring financial stability for you at all times. You don’t have to worry about any market volatility and fluctuations. These returns can be used to meet goals like buying a home, paying for higher education, and so on, provided the maturity value aligns with these financial needs.
4. Tax Efficiency- Tax benefits are always available for those investing in guaranteed return life insurance plans. You can get deductions on your premium payments as per Section 80C and also exemptions on the maturity/death benefit amount under Section 10 (10D), provided the premiums do not exceed 10% of the sum assured. 
5. No Waiting Periods- Many insurers offer guaranteed payouts or income once the premium payments are over. Although payout schedules may vary between insurers and policies. It is important to carefully check the policy terms to confirm the availability of such benefits.
6. Rider Additions- You can also boost your plan with helpful riders like terminal or critical illness, accidental disability or death, premium waivers, and so on. Availability of riders will vary based on the insurer and the specific policy chosen. Riders require a nominal additional premium to avail yourself of these riders, and can considerably widen the scope of coverage for your loved ones.

These are the reasons why guaranteed return life insurance plans are smart future investments and value-additions to any portfolio. Explore your options and consult a financial advisor to determine if these plans align with your long-term financial goals.