Every person has many personal goals and achievement of these goals makes life more meaningful. However a cost is attached to every goal and proper financial planning can see us through the key goals in life, which includes child education, setting up a business, buying a house or planning for retirement. Some of these goals like a child’s education or retirement planning are definite and can’t be left to chance. In the last 10 years SBI FD rates have fallen from 9.25% to 5.4% which is a 40% decline. In 2012 a five year SBI FD offered a yield of 13.50%! In a continuously falling interest rates environment it is difficult to plan for our goals through a Bank fixed deposit. If the achievement of these goals is planned with a Life insurance Guaranteed Return plan than one is assured of fulfilling the goal. Also known as Guaranteed Savings Plan these plans offer the following benefits:
There are five important benefits that come with investing in a Guaranteed Return Plan
- Returns from these plans are fixed and guaranteed
- Returns earned are tax free under section 10 (10D) of the Income Tax Act
- Returns can be either lumpsum or regular or even both
- There is an insurance cover in every plan
- Premiums paid are tax deductible under section 80C upto Rs. 1,50,000
Guaranteed Savings plan is the only scheme apart from PPF (Public Provident Fund) where invested capital, income earned and maturity value all three are tax exempt In PPF returns are not fixed as government changes the interest rates from time to time. However once a Life Insurance Guaranteed Savings plan is bought there is no change in the returns. A guaranteed return plan hence makes an investor sure about his cash flow, and he can plan his finances accordingly.
With falling interest rates a Guaranteed Savings Plan offers fixed guaranteed returns thus safeguarding the investor against lower interest rates. This is one of the prime reasons why guaranteed return plans finds the preference of savers in the current times. On a post tax basis these plans offer better returns compared to Bank Fixed Deposits, post office deposits and other fixed interest bearing investment options. There is no other product where fixed guaranteed and tax free returns are available for lifelong!
At Wealth Baba we offer products of all the insurance companies. Connect with us to find out what is best for your requirement.