A safety net with assured returns

Tax free returns if annual premium is less than ₹5 lakh

- SAIKAT NEOGI

GUARANTEED RETURNS INSURANCE plans ensure stable income post-retirement, helping individuals maintain their lifestyle without worrying about market volatility. In addition, a life cover provides an added layer of financial protection to their loved ones in case of an unfortunate incident.

A fixed premium is paid by the policyholder for 10 to 15 years. And the returns can be received as a lump sum upon maturity or as a regular stream of income for 30 years. Returns can also be received as a mix of both income and lump sum. The maturity proceeds from guaranteed plans are tax-free if the annual investment is less than ₹5 lakh, under Section 10(10D) of the Income Tax Act 1961.

No market-linked risks Unlike fixed deposits which face reinvestment risks upon maturity, guaranteed life insurance plans are an ideal option for those who do not want to take risks with their money. "By investing in these plans, risk-averse individuals can achieve financial security with predictable returns and no market-linked risks," says Sameep Singh, product head, Investments, Policybazaar.com.