What are Monthly Income Schemes?

A monthly income scheme is an investment plan that provides a steady stream of income regularly. You invest a fixed sum regularly over a specified period. This money accumulates and grows over time. After the maturity of the plan, you receive the returns as a fixed, monthly income for a predetermined period of time.

One such scheme is a life insurance plan with monthly income option.

Features of Monthly Income Schemes – Life Insurance Plans

The features that make monthly income life insurance plans beneficial are as follows:

Monthly Payment

A monthly income scheme provides regular payouts every month. The income is guaranteed, ensuring a stable inflow of funds. This income can act as a supplement to your existing income, or as a replacement to salaries after retirement.

Life Cover

If an unfortunate event occurs during the policy period, your loved ones receive an assured payout. It can cover for your family’s living costs, helping them avoid financial challenges in your absence.

Flexibility in Premium Payment

You can pay the premiums at frequencies that suit your budget. Options include regular monthly, half-yearly or annual premium payments throughout the policy term. You can also opt for a one-time lump sum payment.

Limited pay plans are another convenient alternative which allow you to complete premium payments within the first few policy years.

Flexibility in Payout Options

You can choose how your loved ones receive the money in case of an unfortunate event. If they would need funds to repay immediate dues like outstanding debts, a lump sum payout is suitable. Monthly payouts are suitable for ensuring their standard of living is maintained.

Tax1 Benefits

Life insurance monthly income plans offer deduction under Section 80C of Income Tax Act, 1961. You can claim deduction of up to ₹ 1.5 lakh from your taxable income for the premiums you pay.

Things to Consider Before Buying a Monthly Income Scheme

Assess Your Requirements

Different schemes offer different benefits. These plans have different entry ages, premium payment terms, coverage, and payout options. Assess your family’s needs and choose the best monthly income scheme keeping in mind your immediate needs and your long-term life goals.

Income Amount Needed When You Retire

You can use the monthly income from these plans as a pension to secure financial independence once your regular earnings stop. But first, you must estimate the funds needed to cover for your expenses after retirement. This will enable you to buy a suitable plan offering a sufficient monthly income.

Check Your Current Insurance Plan

Evaluate your existing life insurance plan. Is it enough to cover your family’s needs in case of an eventuality? You can use a life value calculator to estimate the ideal coverage for your life. If there is any gap between your existing coverage and your ideal coverage, a monthly income scheme’s life cover can help to bridge this gap.

To generate a substantial monthly income, you can invest in monthly investment plans2 by ICICI Prudential Life. The benefits include:

Limited pay plans are another convenient alternative which allow you to complete premium payments within the first few policy years.

  • Budget-friendly premiums
  • Built-in life cover3 to protect the financial future of your family in case of an unfortunate event
  • Facility to buy online
  • Flexible premium payment options as per your resources
  • Choice of monthly, yearly, half-yearly income or lump-sum payouts

A monthly income scheme is a tool that not only acts as a supplement to the regular income, but can also provide protection to you and your loved ones. Invest in a monthly income scheme now.

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1 Tax benefits under the policy are subject to conditions under Section 80C, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Good and Service tax and Cesses, if any will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for more details.

2 This is not a product brochure. For more details on the risk factors, terms and conditions, and the charges and benefits related to Surrender, Premium Discontinuance, Revival etc., please read the sales brochure carefully before concluding the sale.

Past performance is not indicative of future performance.

3 Life Cover is the benefit payable on death of the life assured.

COMP/DOC/Feb/2022/252/7487

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