Life insurers focus on guaranteed returns to customers amid uncertain times

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SME Times News Bureau | 21 Dec, 2020
With financial stability becoming quite difficult for most in the uncertain times and markets, especially after the spread and scare of Covid-19, life insurance companies have come up with insurance plans with guaranteed returns to help people meet their different life goals.

In the past few months, many life insurance companies increased the proportion of non-participating saving products with guaranteed returns as an alternative to the falling bank fixed deposit rates.

Recently, leading private insurer Bharti AXA Life Insurance introduced a unique plan -- Bharti AXA Life Guaranteed Income Pro -- that offers life insurance along with guaranteed returns and maturity benefits. This non-linked, non-participating savings insurance plan is designed to provide financial stability to individuals and ensure policyholders of future income requirements with dual benefits of savings and protection.

The new plan empowers policyholders with financial returns, fulfills the need to secure their financial obligations and helps achieve goals like child's education or marriage, retirement, a holiday, retirement income or a supplementary income.

Commenting on the introduction of the new protection-cum-savings plan, Bharti AXA Life Insurance MD and CEO Parag Raja said, "We designed Guaranteed Income Pro as an innovative solution that provides life insurance coverage and benefits of a savings product. The hallmark of our unique offering is the sound financial returns amid uncertain markets. It not only offers flexible short, medium, and long-term income options but also helps people meet different financial needs at various milestones of life."

Similarly, IDBI Federal Life Insurance launched a non-linked, non-participating life insurance Guaranteed Income Plan to provide a combination of protection and guaranteed returns. "In the prevailing uncertain scenario, with a large section of individuals experiencing financial worries and stress, it is necessary to safeguard one's investment portfolio with a financial solution that offers guaranteed pay-outs," said Karthik Raman, CMO and Head -- Products, IDBI Federal Life Insurance.

On the other hand, Max Life Insurance has stated that its Smart Wealth Plan provides a life insurance savings plan with guaranteed returns and helps meet important life-stage needs and achieve a financially secure future.

Explaining about the benefits of Bharti AXA Life Guaranteed Income Pro, Parag pointed out that it takes care of financial goals of policyholders by giving the flexibility to choose from Endowment and Income options, which offer promising benefits and help them sail through uncertain times.

Under Endowment Option, the insured will get lump sum benefits at maturity with guaranteed additions boosting annual corpus from the first year. The guaranteed addition of 10 per cent of one annualized premium shall be accrued from the end of first policy year till the end of policy tenure.

The new plan returns all premiums paid at the end of the payout period under Long-term and Deferred Income variants. Besides, under Long-term Income, the policyholders also get income for an income payout period of 25 or 30 years following the completion of policy term. The income payout under the Long-term Income option ranges from 25.7 per cent to 90 per cent of Annualized Premium. This enables customers to supplement their income for the golden years, the Bharti AXA Life Insurance MD and CEO added.

ICICI Prudential Life Insurance rolled out a new plan that guarantees life-long income after the policyholder retires. ICICI Pru Guaranteed Pension Plan is a non-linked non-participating individual annuity product that provides customers with the flexibility to choose between Immediate and Deferred Annuity. "It is a guaranteed life-long income solution that can provide certainty in today's unpredictable times, said Amit Palta, Chief Distribution Officer, ICICI Prudential Life Insurance.

Parag opined, "Guaranteed Income is ideal for risk-averse individuals who aim to generate a substitute source of regular income and achieve assured financial returns for tomorrow. We are helping people remove uncertainties from financial planning through an assurance of certain income."

Many life insurance plans like HDFC Life Sanchay Plus, Tata AIA Life Guaranteed Return Insurance Plan and Future Generali New Assured Wealth Plan among others also offer assured returns, apart from protection benefits.

In view of a higher life expectancy, soaring inflation and rising healthcare costs, according to industry experts, the combination of protection and savings with guaranteed returns and guaranteed additions in life insurance plans make them attractive for those who assured returns on their savings.

Such plans suit those who need a fixed amount on maturity and will not want to take any risk with their savings. And once purchased, the customers to make sure to run them till maturity as any exit before maturity will be very costly in such insurance plans, they advised.