You are alive now, and the next moment you will live will be entirely unpredictable. So you act only as the time rolls next.
As an ordinary individual and everybody else around, you just want a safe and secure future for you and your loved ones. At times when you spend, you go overboard without realizing that the speed you give away your money can lead to your miseries. Expenses in life should always be planned keeping in mind the level of income. But not everyone takes care of their expenses; hence individuals like these would need a savings plan.
A habitual spender must always buy an insurance plan with assured income. The reasons to buy insurance are obvious but still, let us look at reasons to have a savings insurance plan?
Why should you have a savings insurance plan?
It is simple and goes without saying that savings are essential for:
- Unpredictable times.
- Accidental happenings.
- Larger goals in life like education, marriage, and retirement.
Individuals have a common perception that a life insurance policy does not benefit the policyholder until their survival. It pays only after the death and to the dependent survivors. But with varying products launched in the market, the buyers can now pick different savings plans that include endowment policies.
Endowment plans guarantee returns if you invest the money over a period of time.
Let us discuss in detail what an endowment plan is and how it helps?
What is an Endowment Policy?
Learning with an example would be a great idea.
Rishab was in a banking job and lived in Delhi, where the cost of living for the whole family was too high. Despite a handsome package, Rishab was left with hardly any amount to make good savings for the future. He lived with his wife, one son and dependent parents. The expenses were high, which led him to think that he should start saving as early as possible. But at heart, Rishab knew that saving a few thousand won’t solve the more extensive purposes in life.
Gradually, Rishabh found out about the savings life insurance plan. He realized that putting aside this considerable amount would not help him much. Soon Rishabh spoke to his uncle in a life insurance company and bought the endowment plan.
For Rishabh and everyone, an endowment plan is a savings life insurance policy that provides life protection to the policyholder. But the coverage does not confine to this much. This type of life insurance policy pushes you to save regularly over a specified period. Savings over a considerable period help you set a lump sum amount aside.
The policyholder will get this huge amount only at the maturity of the policy. In this case, discussed, Rishabh could take care of his child’s education when he could receive a considerable amount of savings.
If the policyholder dies during the policy term, then the whole sum assured is given to the beneficiary of the policyholder. Thus, an endowment plan guarantees the income as well as provides the life cover.
How do Endowment Plans ensure guaranteed returns?
Endowment plans ensure guaranteed returns because they are savings plans, and second, they are not linked with the market risks. When they are not related to the market’s performance, the guaranteed returns come upfront.
Key Takeaways of the Guaranteed Returns (Endowment) Policy: Savings Life Insurance Policy.
- Endowment policies are of two types with profit and without profit.
- Profit Endowment Policies: Under this type, the basic sum assured will be provided to the policyholder. It is the guaranteed amount that is promised to the policyholder at the beginning of the policy. The final payout is higher depending on the bonuses announced by the companies.
- Non-Profit Endowment Policies: These are the policies that do not participate in the profit generated by the company. But these plans offer guaranteed additions in the plans, which is ultimately an income for the policyholder.
- The plan provides financial protection to the loved ones of the policyholder.
- A guaranteed returns savings life insurance policy offers you tax benefit under section 80C and section 10(10D) of the Income Tax Act.
If you are considering buying an endowment plan, you are at the right spot. Aditya Birla Sun Life Insurance Income Assured Plan assists you to protect your life goals. The protection is guaranteed where in the end, you will be benefited from the amount of money you invested over some time.
Just a hint of the product will not suffice your purpose. Instead, you should dig deeper to keep aware of how the ABSLI Income Assured Plan will help you.
What is ABSLI Income Assured Plan?
ABSLI Income Assured Plan indicates that the plan is for saving money that you might need in the future. The plan’s goal is to protect your life with complete assurance of benefit on the survival also.
- The plan from the insurer enables you to fulfil the rising needs of life at different stages.
- The returns are guaranteed no matter how uncertain life is.
- The policyholder receives the monthly payouts starting after paying the premium for one complete term.
- Apart from you paying the premium amount, the insurer makes guaranteed additions till maturity.
- Under the ABSLI Income Assured Plan, you can choose from a short premium paying term of 5/7/10 years.
- You can also earn tax benefits under this savings life insurance.
If the plan and its coverage excite you, you must check for eligibility whether or not you can buy it.
Eligibility check: Whether you can buy the ABSLI Income Assured Plan?
If you are willing to make a lump sum money collection for you, check here your eligibility.
|Entry Age||8 year to 60 years. The maximum age at the end of the policy term must be 75 years.|
|Premium Paying Term|
YearsPolicy Term5 years15 year7 years17,22 year 10 years20,25 year
|Minimum Premium Paying Term||Attained age at the end of policy term must be 18 years or more.|
|Maximum Premium Paying Term||Attained age at the end of policy term must be 75 years or less.|
|Minimum Sum Assured you will get||Rs.1,00,000|
If, after reading the eligibility criterion, you believe that you can buy ABSLI Income Assured Plan, you must look into the policy’s benefits.
Benefits of ABSLI Income Assured Plan
Guaranteed income is the primary lure that fascinates you to buy plans like Income Assured from ABSLI.
Working with an international bank, Roshni chose the savings life insurance product from ABSLI with a premium paying term of 10 years. As soon as she finishes the premium payment for the next 10 years, the policy will start paying her an assured income every month till the end of the policy term. The amount will be 8% of the sum assured per annum. At the time of the beginning of the policy, there is an option to choose how to receive the assured income in the following ways:
Option A: It provides that the policyholder can receive the assured income every month till the end of the policy term.
Option B: In another option, the policyholder can accrue the assured income to receive it as a lump sum at the end of the policy term or on death. There is a slight tweak in the policy benefit here that the accrued assured income will increase to the following percentage:
|Policy Term||% of Accrued Assured Income|
|15, 17, 20||137.5%|
In other benefits, Roshini got these:
- Guaranteed Additions1: After the beginning of each quarter, the company added 1/4th of the per annum rate as soon as the premium paying term is completed. The guaranteed additions are made until the policy maturity date.
- Death Benefit: Roshini was assured that in case of her sudden demise, the beneficiary in the policy shall be given the sum assured plus guaranteed additions accrued to date. This will happen only if Roshini loses her life during the policy term. Apart from these, the beneficiary will get increased accrued income if Roshini has opted for it.
- Maturity Benefit: If Roshini survives the complete term of the policy, she will be eligible to get the sum assured and the accrued benefit to date.
These are the typical earnings or savings you can say one can make from the policy. Roshini felt that the scope of the cover was broad, but then she thought of expanding it with the rider covers. So, yes, ABSLI Income Assured Plan can be extended to offer you comprehensive cover apart from guaranteed income.
The riders from which Roshini had to consider include these:
- ABSLI Accidental Death and Disability Rider provide additional protection for accidents leading to death or disability. The other cover comes at nominal costs.
- ABSLI Critical Illness Rider under which the policyholder gets a benefit amount as a lump sum if diagnosed with any of the 4 specified critical illnesses.
- ABSLI Surgical Care Rider provides a lump sum benefit amount to cover the surgical expenses.
- ABSLI Hospital Care Rider offers daily cash, additional ICU benefit, and lump sum recuperating benefit upon hospitalization.
- ABSLI Waiver of Premium Rider was another attractive cover under which all the future premiums will be waived in case of permanent disability, death or 4 specified major illness.
- ABSLI Accidental Death Benefit Rider Plus provides additional protection at a nominal cost for accidents leading to death.
The company has a condition that any individual can opt for either ABSLI Accidental Death and Disability Rider or ABSLI Accidental Death Benefit Rider Plus and not both.
Keeping her earning capacity and the growing age in mind, Roshini chose ABSLI waiver of premium, accidental death rider, and critical illness rider. She could afford it because the additional covers are available at a nominal premium. After 10 years of premium paying term, Roshini earned a monthly income as specified in the policy. She could happily manage her child’s education and other significant expenses as well.
Similar to what Roshini did, you can also customize the plan with additional riders. If you as a policyholder survive the plan’s term, you will be eligible to receive the total sum assured along with the accrued income.
Though the payouts of the policy will depend on the limit of the cover and other conditions being fulfilled or not. The payouts under this savings life insurance policy will also depend on different factors that include:
- Pre-existing medical conditions: If any individual seeking a saving life insurance plan like ABSLI Income Assured Plan, they might have to pay a little higher premium because of any pre-existing medical condition. It is like transferring your risk to the insurer, and hence they charge a slightly higher premium towards the policy.
- Choice of the profession: When the policy proposer works in a hazardous environment, they might have to pay a higher premium. It is because the probability of risk is higher, for which you will have to pay a higher premium.
- Tobacco use: If any proposer is a regular tobacco consumer or is a smoker, they will have to pay more premium.
- Age: A healthy person will have to pay a lesser premium towards the life insurance policy. This is why it is common to start investing money in a savings life insurance policy when young, as the probability of contracting the disease is significantly less.
- Location: The premium will be higher when the policy seeker lives in an area where harsh climatic conditions keep you away from exercise.
Life insurance policies with guaranteed income are about bringing surety of income when you cannot make the handsome money. It helps you bear the expenses that are bound to happen, such as a child’s marriage or child’s education.
ABSLI Income Assured Plan is one type of endowment plan. You have seen the benefits of the product and understood how it helped Roshini.
Now, let us see who all must buy an endowment plan?
Who must buy an endowment plan?
If you fall into any of these categories, it is a good time for you to buy an endowment plan:
- Individuals with a regular stream of income.
- People who want a lump sum amount after some time.
Endowment savings life insurance policy provides a routine for savings which is essential for salaried persons. If you are one of these and think that you cannot bear too many money risks, then this savings plan is for you.
ABSLI Income Assured Plan is a perfect option for those who look for a life cover for themselves. In simple words, it is a savings insurance plan for buyers to support their loved ones in the event of the untimely death of the policyholders. The plan assists you to have goal-based savings for which you save penny by penny. In the end, what you create is a corpus of money to fulfil your long term objective. This insurance plan with assured income will be your saviour at the time of need.
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