Monthly Income Schemes
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 a 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 ensures 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 Cover3
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 allows 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 the Income Tax Act, 1961. You can claim a deduction of up to ₹ 1.5 lakh from your taxable income for the premiums you pay.
Why Should You Choose a Monthly Income Scheme?
Adding a monthly income scheme to your investments can be helpful in many ways. The best monthly income scheme can provide you and your loved ones with financial stability, security, and peace of mind. Here are some reasons to consider a monthly income scheme:
Regular Income
A monthly income scheme can provide you with income, in addition to your regular salary. You can use this amount to meet your daily needs, plan your future goals and live the life you have always wanted. Since the income from the scheme is fixed at the time of purchase, you can be assured that you will receive the amount every month.
Tax1 Benefits of Monthly Income Scheme
The premiums paid under the policy qualify for tax1 deduction subject to conditions under Section 80C of the Income Tax Act, 1961. You can claim a tax1 deduction of up to ₹ 1.5 lakh and save up to ₹ 46,800 per annum in taxes.
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 cover3 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 allows 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.
Best Time to Buy a Monthly Investment Plan
Below are some factors that can help you decide the ideal time for investing in a monthly investment plan
When market conditions are favourable
The condition of the market at the time of purchasing the plan can impact your future returns. Therefore, it is essential to assess overall market conditions before purchasing a monthly income plan. You can look for signs, such as positive or negative price trends, market volatility and investor sentiment.
At the start of the month
Investing in a monthly income scheme at the beginning of the month can be a suitable approach. This is the time when you receive your salary and are likely to have adequate funds to invest. This helps you invest your money in a disciplined manner before it is spent on other essential and non-essential needs.
When you have surplus funds
Monthly income schemes can help you secure your future financially. Therefore, if you find yourself with surplus funds, you must consider investing it to maintain future financial stability. This ensures that your surplus funds are not kept idle and are generating returns.
When the source of income is stable
It is essential to have a consistent and stable monthly income before considering a monthly income plan. A steady income stream offers you a reliable source of funds to invest. It ensures consistency in investing and sets the foundation for a disciplined approach to long-term investing.
When you have clear investment objectives and plans
It is important to have a well-defined investment objective and plan before investing in a monthly income plan and to clearly outline your financial goals, risk appetite and the amount of time for which you want to invest. This helps you select a suitable plan and amount to invest.
A GIFT with Many Flexibilities - What Makes ICICI Pru GIFT Pro Suitable for You?
ICICI Pru GIFT Pro is a customisable protection and savings life insurance plan. It offers a life cover3 to help financially secure your family as well as guaranteed4 returns to help achieve your financial goals.
4 Conditions apply
Below are some key features of the plan:
Flexibility to choose the Guaranteed Income option5
The plan offers the flexibility to choose a constant guaranteed4 income that remains the same every year or choose income that increases by 5% simple interest every year. This helps you tailor the plan as per your financial requirements.
Flexibility to choose income period
With ICICI Pru GIFT Pro, you have the flexibility to choose the duration for which you receive the guaranteed4 income. This period can be 5, 7, 10, 12, 15, 20, 25 or 30 years.
Flexibility to choose percentage of MoneyBack Benefit6
Aside from guaranteed4 regular income, this plan also allows you to get a percentage of your total annualised premiums as a lump sum. This is called the MoneyBack Benefit6. You can choose to receive the benefit at the end of any year during the income period.
Flexibility to receive all future benefits
With ICICI Pru GIFT Pro, you have the option to withdraw all future payouts and the MoneyBack Benefit6 into a lump sum at a discounted rate. You can receive this amount at maturity or any time during the income period. In case of an unfortunate event, your loved ones can also choose this option.
4 Conditions apply
Who should buy ICICI Pru GIFT Pro?
Below are some categories of investors who can benefit from this plan:
Balanced investor
ICICI Pru GIFT Pro is not market-linked. It is a low-risk investment option that can help balanced investors diversify their portfolio.
Second income cushion
This plan offers guaranteed4 regular payouts. Salaried professionals can invest in the ICICI Pru GIFT Pro to get a secondary regular income. This income provides you with the flexibility to achieve your future goals while also taking care of your current responsibilities.
Goal-based savers
This monthly income plan helps you with investing for your future goals in a disciplined manner. You may invest in the plan for goals such as buying a house, higher education for your child, retirement and more. You can also customise when you receive the income. This allows you to align the returns from the plan to your major expenses. Additionally, the plan also offers a life cover3 that helps you financially secure your loved ones in case of an unfortunate event.
Retirement Planning
The returns from the plan can act as a steady source of income during your retirement years. This can help you maintain your current lifestyle after you retire while also achieving your post-retirement goals such as travelling, starting a venture, pursuing your hobbies and more. It can also help you in case of an unfortunate event.
4 Conditions apply
W/II/0038/2024-25
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