A Guaranteed Income Plan provides predictable and guaranteed income to individuals. It provides long-term financial security after its expiry and protects your family members after your demise. There are many Guaranteed Income Plans available in the market. So, it is necessary to know the exact steps to follow to choose the best Guaranteed Income Plan.
Understanding your needs and financial capability
Firstly, try to focus on personal objectives that one has. You will require saving for 10 years or 20 years or whatever you want. Most importantly, you also have to identify how much you are investing when it comes to the first initial investment. You should never forget that the Guaranteed Income Plan is a life cover along with a savings product. With a higher amount, you achieve two benefits simultaneously without market risk. Thus, at all times, it becomes better to go for higher amounts. But, equally relevant is that one should go within the budget.
Effective research
The next step will be to conduct in-depth research on different types of Guaranteed Income Plans available. You can get help from the internet. It is necessary to compare the terms and conditions of different plans and to determine the cost of each of these. You can also ask your relatives and friends who know about Best Guaranteed Income Plan to get a better idea.
Determine the payout options
One of the main advantages of Guaranteed Income Plans is that it provides regular income after a certain point of time. In this case, you have to decide the kind of payout option you want to take. For example, you can choose between a fixed payment or a variable payment. One can also choose between lumpsum payments at one time or regular payments in periodic intervals. The kind of pay out you want will depend on your financial goals and your predicted expenses.
Understand the tax implications
Both the premiums paid and the maturity amount of the Guaranteed Income Plan are exempt from tax. But, the whole amount is not exempt. So, individuals need to determine the amount of tax they may have to give beyond the exempt amount. Also, the tax rates in India change from time to time. So, the tax amount may also differ, which every individual has to consider before taking a Guaranteed Income Plan.
Focusing on the flexibility
You also need to focus on the flexibility of the plan. Please consider optional features, such as critical illness benefits, spousal coverage, or accidental death riders. Also, it is important to take into consideration the liquidity options available to different plans. There are few plans which allow individuals to withdraw money after a certain period. This may be beneficial in emergency situations. Some plans allow partial withdrawals without penalties, which can be useful in emergencies.
Seek professional advice
Before finalizing the best Guaranteed Income Plan, it is necessary to take professional advice from an agent. Agents of different banks or other private financial institutes have proper knowledge about these plans and can guide an individual. But, individuals also need to make background checks about the agent and his credentials before trusting anyone with money and future plans.
