LIFE COVER+ REGULAR INCOME! Investing on or before 31st March 2023, is the best time to grab high-value life insurance

Knowing the ideal path to a secure and protected life is what everybody desires; however, we rarely know what to do at the right time. Life Insurance taken at the right time not only provides peace of mind but also can be a source of income. What kind of insurance plan you take also decides the type of coverage you will have, along with other benefits.

How Regular Income and Life Cover together make a great combination?

A life insurance policy provides the much-needed life cover that one requires to safeguard one's loved ones. It is essential to have an adequate Life cover in all stages of life as it provides several benefits, including:

• Financial security: Life insurance provides financial security to the policyholder's family in the unfortunate event of their untimely death. The policy's death benefit can help cover the family's financial needs, such as living expenses, outstanding debts, and education expenses, etc.
• Tax benefits: Premium paid against Guaranteed Return Plans are tax deductible under Section 80C, and maturity is tax-free under Section 10(10D) of the Income Tax Act, subject to conditions (until March 31st, 2023).
• Savings and investment: Certain types of life insurance policies, such as endowment plans, offer a savings and investment component along with life cover. These policies can help policyholders save for their future financial goals while providing life insurance coverage.
• Loan facility: Policyholders can avail  loans against their life insurance policies, providing them with access to funds during emergencies or other financial needs.
• Additional riders: Life insurance policies offer additional riders, such as critical illness, accidental death, and disability, which can provide additional coverage and financial security to the policyholder and their family.
• Retirement planning: Certain types of life insurance policies, such as pension plans, can help policyholders plan for their retirement by providing a regular income stream after retirement.

The regular income provided by a few categories of Life Insurance Plans can be very useful, especially for retired person, when there is an ardent need for regular income. Under this category falls guaranteed income plans that not only provide life insurance cover but also give regular income and aid retirement needs.

Here Guaranteed Income plans give you a great combination of Life Cover, Regular Income and Tax Benefits along with various other advantages to make it a great instrument providing coverage to your life as well as proving regular income. Let's see some of the 

Guaranteed Income plans  offer several benefits, including:

• Regular income: Guaranteed Income plans provide a regular income stream to the policyholder, which can help meet their financial needs and ensure a steady cash flow. Regular income is especially needed in the retirement years when there is no regular income. 
• Risk management: Guaranteed Income plans offer protection against market volatility and other financial risks, as the insurer guarantees a minimum payout irrespective of the prevailing market conditions.
• Tax benefits: Premium paid against Guaranteed Return Plans are tax deductible under Section 80C, and maturity is tax-free under Section 10(10D) of the Income Tax Act, subject to conditions (until March 31st, 2023).
• Flexibility: Guaranteed Income plans offer a range of options to policyholders to choose the frequency and duration of payouts as per their individual financial goals and needs.
• Long-term financial planning: Guaranteed Income plans are designed to provide long-term financial security and stability, enabling policyholders to plan for their retirement or other long-term goals.
• Death benefits: In the event of the policyholder's death, the guaranteed income plan offers death benefits to the nominee, ensuring financial protection for the policyholder's family.

Why 31 March 2023 is so critical?

The much awaited 2023 Budget made several announcements. One of the critical announcements that were made in the Life Insurance Category declared that Returns from traditional plans( Life Insurance plans) issued on or after 01-04-2023 would be taxable if the premium from one or more policies( other than ULIPs) exceeded Rs.5,00,000. However, the death benefit remains unchanged, and tax benefits apply as before.

In short, a combination of regular income, tax benefits, life cover and several other benefits make a Guaranteed Income Plan a great choice. The tax exemption, however, will be affected for policies exceeding Rs.5,00,000( except ULIPs); hence alternatively, one can plan to avail of these plans before this timeline.