You work hard your entire life to ensure a good life for your loved ones. You deserve the same, especially in your golden years. However, it can be hard to experience all the good things in life post-retirement if you don’t have enough finances to fall back on. With a stop to your regular income, you might have to rely on your savings. However, counting on your saved money to pay the bills and lifestyle spending is not a wise option. Instead, you can do the smart thing and invest in a regular income plan to give you a fixed stream of income.
How can I make regular income post-retirement?
You can make regular income post-retirement and live a stress-free life with a regular income plan. As the name suggests, a regular income plan is a financial product that gives you the dual benefit of regular income from investment plus life insurance with returns. With it, you get interest-based returns after a pre-determined period in the form of monthly instalments on maturity or completion. Or, if you choose a regular income planwith flexible terms, you can even receive these payments in lump-sum plus monthly instalments on maturity. All you have to do is pay the premiums fixed under the plan. Different income insurance plans have different premium rates and depend on the insurer.
Moreover, you have the freedom of paying your premiums in a series of regular monthly instalments or at one-go with a lump-sum. However, it is better to go for the former option, as you can stay aligned with the current inflation rate and set aside a fixed sum from your regular income source.
Is a regular income plan safer than fixed deposits?
A regular income investment plan is one of the safest investment instruments. Although bank products like fixed deposits are generally considered risk-free instruments, their return rates tend to be lower (between 2%-7% per annum). A regular income plan is not only safe but also gives higher profits than fixed deposits. One of the main reasons why income insurance plans are safe, is because they are non-linked products. Non-linked products are those in which the returns generated do not depend on the investment market’s performance. This means that you get guaranteed and fixed returns (around 7-9% per annum) at the end of the term.
Moreover, income insurance plans also offer the benefit of whole life insurance protection by giving a guaranteed death benefit to your beneficiaries (family members) on your unfortunate demise. This makes them the best option strategy for regular incomeand securing your loved ones in your absence. Moreover, they also receive the full value of the premiums paid by way of a refund. That way, your loved ones will not have to compromise on their dreams even if you are not around.
Which monthly income plan should I opt for?
There are plenty of regular income plans to aid you in proper retirement planning. Look for a plan that offersmaturity payout options, such as the fixed monthly instalment payout option or the lump-sum plus monthly instalment option. Additionally, look for some primary features, like:
- Base or regular income plan that allows you to pay your premiums in one-go
- Secured income plan that allows you to pay your premiums in monthly instalments
- The option to choose your own payout date and month
- Additional critical illness benefits that:
- Provides coverage for life-threatening diseases such as cancer, heart attack, kidney failure, etc.
- Compensates your family members in case of your demise or hospitalization due to a critical illness
- Continues to confer the benefits of the regular income investment plan in your absence
- Waives off the payment of future premiums to ease the burden of the eventuality
- Pays a guaranteed death benefit on your unfortunate demise as per the plan chosen.
- Additional riders such as:
- An accidental death benefit rider that provides extra financial security in addition to the base coverage under the regular income investment plan
- The accident total and permanent disability rider give you a lump-sum benefit in case you develop an injury of a permanent nature due to an accident
- The income benefit rider that provides regular income to your family members in your absence due to your demise
- The waiver of premium rider that waives off the premium payment in case you develop a critical illness
- The premiums you pay for availing of the regular income plan should be exempt from tax deductions if they are below ₹1,50,000 per year according toSection 80C of the Income Tax Act, 1961.
- The maturity payout you receive at the end of the regular income plan should also be exempt according to Section 10(10) D of the Income Tax Act, 1961.
To sum it up:
To get a regular income source post your retirement, it is best to search for an investment that helps you do so. Only relying on your savings might not be enough to meet the rising costs of various goods, services, and amenities. Rememberthat your golden years open the door for self-love, relaxation and enjoyment, but also increase the need for advanced healthcare, day-to-day living costs, supporting your spouse and helping your children when the need arises. Getting a regular income plan will be a strong investment for regular income.