Financial planning should be one of the most important goals in life. The selection of investment options should be done carefully. To the evidential and conservative people who crave to engage in a venture that has minimal risks and promises of high returns, a guaranteed return plan is a perfect solution. These plans give assured profits for a particular period; they can be useful for creating investments for a lifetime.
What Do You Understand by a Guaranteed Return Plan?
A guaranteed return plan is a financial service through which a client gets the ability to save and invest with certainty of fixed earnings. These plans are such that your investments grow constantly at a minimal level of risk while offering you the security that your money will not disappear. Unlike the investment market’s promising options that are risky in nature, the assured return products assure an assured return, and so you can be relaxed.
Why Opt for a Guaranteed Return Plan?
That being the case, the reasons for choosing a guaranteed return plan can be explained as follows:
Low-Risk Investment
For those who are not ready to take high risks in order to get high rewards, a guaranteed return plan is great. These plans are not tied to market fluctuations, which means that your invested capital and your earnings are safe.
Dual Benefits
Most of the guaranteed return plans come with life insurance benefits, which means in case of any unfortunate incident, your family shall be financially catered for. Because of this dual nature, these plans are a one-stop financial solution.
Tax Advantages
Amounts invested towards guaranteed return plans can in fact be claimed as tax deductions under Section 80C, while the maturity benefits are free from tax as per Section 10 (10D). This makes them a tax-efficient investment tool.
How to Choose the Right Guaranteed Return Plan
There are several issues to consider getting the right guaranteed return plan.
- Financial Goals-You need to have a clear understanding of what you wish to accomplish. Is it retirement funding, child education, or maybe something else? In knowing your goal, you will be able to choose a plan that will match your requirement.
- Compare Return Rates– Different plans offer different rates of return. You should check the guaranteed payout to ensure that it matches the financial expectation and personal objectives.
- Policy Terms-You need to check out the period of the plan and how flexible it can be. Some plans call for periodic payouts, while others might issue a lump sum at the time of maturity. Opt for one that best caters to your cash flow needs.
- Think about the Credibility of the Provider – Opt for plans from a reputed insurer who has an area of expertise in claim settlements. Reliable providers ensure that they deliver hassle-free policy administration and claim processing.
Benefits of Starting Early
Investing in a guaranteed return plan early in life amplifies its benefits. With a longer investment horizon, you can:
- Accumulate a larger corpus due to compounding.
- Enjoy lower premiums for life insurance components.
- Achieve your financial goals without stress.
Starting early not only secures your future but also instills a disciplined approach to savings.
