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.

People like you also read...

1 Tax benefits under the policy are subject to conditions under Sections 80C, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods 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 the future performance.

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


Back to Top