How to choose the right plan for a fixed monthly income

Tools to secure and plan a fixed future monthly income

Tools to secure and plan a fixed future monthly income

Today, planning ahead is more important than ever. One approach to it is a fixed monthly income. Below are three available tools that can ensure a fixed monthly income for you and your loved ones’ future.

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1. Annuity Plans
If you are a person who believes that certainty in investments and insurance is very important, then annuity plans are ideal for you. After paying a purchase price to the insurer as a single premium, you get a guaranteed monthly, quarterly or annual income throughout your life. Another attraction is that only the interest is taxed, the principal amount remains tax free.

2. MIPs – Monthly Income Plans
Similar to annuities, MIPs (monthly income plans) are investments that ensure specified monthly pay-outs. These plans are best suited for those who don’t want to overspend, but are looking for a stable income that is suited for retirement. Monthly income plans can be compared to earning a salary every month without the stress of having to deal with financial worries after retirement.

3. Term Plan
A term plan is all about providing a fixed income for your loved ones in case of an unfortunate event, which would otherwise put them in financial trouble. The term insurance is simply about paying a premium and getting covered for the chosen term.

Opting for an online premium payment simplifies the process even further. You can also plan and calculate with the help of an online premium calculator. Another important feature of a term plan is that they are eligible for tax benefits under section 80C*. Part of the sum assured is payable in the event of the insured person’s death, while the rest is paid as a monthly income to the beneficiaries for 10–15 years.

It is also advisable to seek guidance from an insurance advisor, especially if you are uncertain about the plan. The plan you choose should empower you and your loved ones, so select the one that is just right for you.

*Tax benefits are as per the Income Tax Act, 1961, & are subject to amendments made thereto from time to time.