During retirement years, it is not always possible to have the same level of income as compared to when you were younger. At such times payouts from an income plan can substitute one’s primary income and help one and one’s family meet their everyday needs without any financial strain.
For instance, having the payouts from a guaranteed income plan can substitute your primary income during retirement.
With a guaranteed income plan, you can also meet any additional future expenses as there may be additional expenses to account for. For instance, there may be some debts that need to be repaid, or perhaps, you’ll need to meet medical expenses or any other financial obligations. Payouts from such income plans may help you set up a source of extra income to meet these additional expenses.
Experts point out, that another advantage offered by such plans is the life cover – In case of death of the life assured, the death benefit will be paid to the nominee or family members so that they continue to maintain their standard of living.
Along with that, you can also customize the plan and its payouts to fulfil your life goals, with a guaranteed income plan.
These plans can also be customized in many ways to meet one’s specific requirements. Such as you can choose your premium payment mode, the premium payment term, and the income payout period. In some guaranteed income plans, experts say one can even choose to defer the payouts by a certain number of years, so the income payments align with one’s needs better.
The regular payouts from an income plan can also help pay for other major life goals like your child’s higher education, their wedding etc.
As the costs of living is a rise, industry experts say inflation is another reason one could consider an income plan. With the costs of living rising steadily, our everyday costs will also increase over time, even if we do not spend on any additional heads of expenses.
Note that even to maintain the same standard of living that you currently enjoy, you will need a higher income, and this is where the payouts from an income plan can be of great help.
Additionally, with the markets being unpredictable, one’s portfolio with market-linked investments like equity/ stocks or equity funds comes with a high degree of risk. Experts point out, that a guaranteed income plan has none of these market-linked uncertainties because the payouts are guaranteed at the beginning.
Lastly, this financial product comes with the added benefit of tax exemption. The income received is exempt from tax u/s 10(10D) of the Income Tax Act, 1961, subject to conditions stated therein. Hence, the investor earns tax-free benefits that are guaranteed to help one retain one’s standard of living over the years.