Rs 1 crore guaranteed income life insurance plan: how much premium you have to pay


A guaranteed income life insurance plan has a predefined schedule and a specified amount that is paid to the policyholder. The income from this plan can be provided to the insured on a monthly, quarterly, semi-annual or annual basis.

Unlike term insurance, which only provided coverage until the expiration of the term or years for which the policy was purchased, the guaranteed income plan provides a fixed amount for a specified period after maturity. of the police.

The amount of income that is provided under the guaranteed income plan is fixed and calculated either as a percentage of the sum insured or the annualized premium.

The premium paid under the term plan is lower. However, since the savings component is involved, you have to pay a very high premium in a guaranteed income plan. Before purchasing a guaranteed income plan, one must first determine the purpose of purchasing the insurance policy.

READ ALSO | Should You Buy Guaranteed Income Plans From Life Insurance Companies?

According to Aatur Thakkar, co-founder and director of Alliance Insurance Brokers, one should buy guaranteed plans if fixed and assured returns are preferred over low returns.

“These plans offer capital protection and stable returns. Life insurance coverage provides financial security for the family and a guaranteed insurance plan also helps clients to a large extent remove the uncertainty of future income streams, ”Thakkar told FE Online.

What the cover costs Rs 1 crore

Actual returns depend on many factors in a guaranteed income plan. This can be the age, duration and amount of the premium, as well as the internal rate of return (IRR) in most traditional plans, including repayment and endowment, Thakkar said.

Each insurer has their structure of guaranteed plans and the guaranteed returns are based either on premiums or on the sum insured.

While choosing the right plan, one must also fully understand the payment structure.

“Guaranteed plans with or without fixed returns are very expensive. For example, if a full-length plan costs you 15,000 per year for Rs 1 crore coverage, on the other hand, guaranteed return plans will cost you around approx. Rs 3.5 lakhs to Rs 4 Lakh premium per year, ”Thakkar said.

“The returns from a guaranteed plan will not yield more than 6% to 8%,” he added.

If the purpose of buying insurance is the financial protection of the family in the event of the unexpected death of the policyholder, then a term plan should be purchased. As the premium is low. In addition, one can invest in better financial products for high returns.

“As an advisor, we always suggest that you take out pure term insurance that will always help you cover your loved ones in your absence and at the same time invest the remaining premium amount somewhere that will pay you better. is coming back, ”Thakkar said.

Do you know what it is? FE Knowledge Desk explains each of these and in more detail on Financial Express Explained. Also get live BSE / NSE stock quotes, latest mutual fund net asset value, top equity funds, top winners, top losers on Financial Express. Don’t forget to try our free income tax calculator.

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