\u003Cspan>Plot No:31 & 32, Beside Union Bank Training Centre,\u003C/span>\u003Cbr />\u003Cspan>Financial District, Gachibowli,\u003C/span> \u003Cbr />\u003Cspan>Hyderabad-500032, India.\u003C/span>\u003C/p>"},{"title":"Helpline","heading":"Helpline","description":"\u003Cul>\u003Cli>\u003Ca href=\"tel:1800-103-5319\">Customer - 1800-103-6116\u003C/a>\u003C/li>\u003Cli>\u003Ca href=\"tel:1800-103-2671\">Agent - 1800-103-2671\u003C/a>\u003C/li>\u003C/ul>"}],"social_media_group":[{"title":"Follow us on","heading":"Follow us on","social_media":[{"title":"Facebook - Follow us on","icon":[{"media_img":null,"media_svg":"https://cdn.shriramlife.com/slic-kalam/files/2023-04/facebook.svg","media_svg_alt":"facebook","media_document":null}],"menu_link":{"url":"https://www.facebook.com/Shriramlife","text":"https://www.facebook.com/Shriramlife"}},{"title":"Twitter - Follow us on","icon":[{"media_img":null,"media_svg":"https://cdn.shriramlife.com/slic-kalam/files/2023-09/Twitter_X__1_%20%282%29.svg","media_svg_alt":"twitter","media_document":null}],"menu_link":{"url":"https://twitter.com/shriramlifeins","text":"https://twitter.com/shriramlifeins"}}]}],"app_group":[{"title":"Download App","heading":"Download App","Apps":[{"title":"Download App - Android","heading":"Android","icon":[{"media_img":null,"media_svg":"https://cdn.shriramlife.com/slic-kalam/files/2023-04/android.svg","media_svg_alt":"android","media_document":null}],"menu_link":{"url":"https://play.google.com/store/apps/details?id=com.svs.slic","text":"https://play.google.com/store/apps/details?id=com.svs.slic"}}]}],"copy_rights":"\u003Cp>© Shriram Life Insurance Co. Ltd. All the rights reserved. Registered with Insurance Regulatory & Development authority of India (IRDAI) as Life Insurance Company. Regn. No. 128. CIN: U66010TG2005PLC045616\u003C/p>"}],"headers":{"x-powered-by":["Express"],"x-frame-options":["SAMEORIGIN"],"content-type":["text/html; charset=utf-8"],"content-length":["15506"],"etag":["W/\"3c92-DMtZth+kJORpxEp4jpmlxZMmq4s\""],"vary":["Accept-Encoding"],"date":["Sat, 21 Dec 2024 15:24:22 GMT"],"connection":["keep-alive"],"keep-alive":["timeout=5"]},"status":200,"statusText":"OK","url":"http://127.0.0.1:4000/api/v1/footer","responseType":"json"},"2002562214":{"body":[{"category":[{"id":1781,"name":"Super Income Plan"},{"id":1782,"name":"Advice"},{"id":1930,"name":"Child Plan"},{"id":1979,"name":"Early Cash Plan"},{"id":1982,"name":"Assured Income Plan"},{"id":1984,"name":"Golden Premier Saver Plan"},{"id":1985,"name":"Premier Assured Benefit"}],"blogs":[{"title":"One plan Many benefits: How Super Income plan is the right at any age","heading":"One plan Many benefits: How Super Income plan is the right at any age","short_description":"\u003Cp>In an era marked by economic volatility and changing demographics, the need for stable financial planning has never been more critical.\u003C/p>","tile_image":[{"media_img":{"url":"https://cdn.shriramlife.com/slic-kalam/files/2024-12/12-6%20Things%20to%20Know%20Before%20Getting%20Shriram%20Life%20Super%20Income%20Plan_0.jpg?VersionId=3Nvr475rPtJv4eEGMULNzS9Nz2iFGKKW","alt":"One life insurance plan for many benefits"},"media_svg":null,"media_svg_alt":"","media_document":null}],"posted_on":"2024-12-20T11:00:29","updated_on":"2024-12-20T11:00:37","read_more_title":"Know More","slug":"/one-plan-many-benefits-how-super-income-plan-is-the-right-at-any-age","field_bl_tag":"\u003Ca href=\"/blog/guides/advice\" hreflang=\"en\">Advice\u003C/a>, \u003Ca href=\"/blog/guides/recent\" hreflang=\"en\">Recent\u003C/a>, \u003Ca href=\"/blog/guides/life-insurance\" hreflang=\"en\">Life Insurance\u003C/a>","description":"\u003Cp>In an era marked by economic volatility and changing demographics, the need for stable financial planning has never been more critical. The Super Income Plan emerges as a beacon of financial security, offering a unique blend of income generation and insurance protection. Whether you're a young professional embarking on your career, a mid-career individual navigating family responsibilities, or a retiree seeking to preserve and grow your wealth, this plan caters to diverse financial aspirations with its comprehensive suite of benefits.\u003C/p>\u003Cp>At its core, the Super Income Plan represents a strategic investment in your future, ensuring a steady income stream while safeguarding against unforeseen circumstances. By exploring its multifaceted advantages—from guaranteed income streams and tax benefits to flexible payout options and inflation protection—you'll discover why this plan is not merely a choice, but a cornerstone in securing financial stability across different life stages. Join us as we delve deeper into the myriad benefits of Super Income Plan and uncover how it can empower you to achieve financial freedom and peace of mind, today and for years to come.\u003C/p>\u003Ch2>\u003Cstrong>Understanding the Super Income Plan\u003C/strong>\u003C/h2>\u003Cp>The Super Income Plan is designed to provide a dual benefit of insurance coverage and regular income. It combines elements of investment and protection, making it a comprehensive financial tool for individuals looking to secure their future. This plan typically involves paying premiums for a specified period, after which it offers regular payouts throughout the policyholder's lifetime or for a predetermined duration.\u003C/p>\u003Ch2>\u003Cstrong>Benefits of the Shriram Life Super Income Plan\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>1. Guaranteed Income Stream:\u003C/strong>\u003C/h3>\u003Cp>One of the standout features of plans such as the Shriram Life Super Income Plan is its ability to provide a guaranteed income stream. This steady flow of income ensures financial stability, making it ideal for retirees or those nearing retirement who need predictable cash flows to cover living expenses.\u003C/p>\u003Ch3>\u003Cstrong>2. Financial Security and Protection:\u003C/strong>\u003C/h3>\u003Cp>Beyond income generation, the plan offers financial security through insurance coverage. It provides a lump sum benefit to the nominee in case of the policyholder's unfortunate demise, thereby ensuring that loved ones are protected financially.\u003C/p>\u003Ch3>\u003Cstrong>3. Flexibility in Payout Options:\u003C/strong>\u003C/h3>\u003Cp>The benefits of Super Income Plans extend to flexibility, allowing policyholders to choose from various payout options. They can opt for regular monthly, quarterly, or annual payments, depending on their financial needs and preferences. This flexibility makes it adaptable to changing life circumstances and financial goals.\u003C/p>\u003Ch3>\u003Cstrong>4. Tax Benefits of Super Income Plan:\u003C/strong>\u003C/h3>\u003Cp>Investing in a Super Income Plan can also offer tax advantages. Premiums paid towards the plan are often eligible for tax deductions under prevailing tax laws, providing additional savings and reducing the overall tax liability.\u003C/p>\u003Ch3>\u003Cstrong>5. Long-term Wealth Accumulation:\u003C/strong>\u003C/h3>\u003Cp>Besides providing immediate income, the plan also serves as a tool for long-term wealth accumulation. The invested premiums grow over time, potentially generating higher returns compared to traditional savings accounts or fixed deposits.\u003C/p>\u003Ch3>\u003Cstrong>6. Inflation Protection:\u003C/strong>\u003C/h3>\u003Cp>Accounting for inflation by offering indexed benefits of super income plan, the policy assures of periodic increases in payouts. This feature ensures that the purchasing power of the income remains intact over the years, safeguarding against the impact of rising living costs.\u003C/p>\u003Ch2>\u003Cstrong>Super Income Plan - Right at Any Age\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>For Young Professionals:\u003C/strong>\u003C/h3>\u003Cp>Young professionals can benefit from starting a Super Income Plan early in their careers. By leveraging the power of compounding, they can build a substantial corpus over time while securing insurance coverage. The plan offers them the flexibility to adjust payouts as their income needs evolve, providing a solid foundation for future financial goals.\u003C/p>\u003Ch3>\u003Cstrong>For Mid-career Individuals:\u003C/strong>\u003C/h3>\u003Cp>Mid-career individuals often face increased responsibilities and financial commitments. A Super Income Plan offers them peace of mind by ensuring a steady income post-retirement. It serves as a prudent addition to their investment portfolio, balancing risk with reliable returns.\u003C/p>\u003Ch3>\u003Cstrong>For Pre-retirees and Retirees:\u003C/strong>\u003C/h3>\u003Cp>Pre-retirees and retirees can derive immense benefit from the guaranteed income feature of the Super Income Plan. It serves as a reliable source of income during retirement years, supplementing pensions or through \u003Ca href=\"https://www.shriramlife.com/life-insurance/savings-plan\" target=\"_blank\">savings\u003C/a> and \u003Ca href=\"https://www.shriramlife.com/life-insurance/retirement-plan\" target=\"_blank\">retirement plans\u003C/a>. The plan's flexibility in payout options allows them to tailor payments according to their lifestyle and financial obligations.\u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>Plans such as the Shriram Life Super Income Plan exemplifies the synergy between financial security and wealth accumulation. Its dual benefits of guaranteed income and insurance coverage make it a compelling choice for individuals at any stage of life. Whether you're planning for retirement, \u003Ca href=\"https://www.shriramlife.com/life-insurance/family-protection-plan\" target=\"_blank\">safeguarding your family's future\u003C/a>, or seeking to build long-term wealth, this versatile plan offers a robust solution. By incorporating a Super Income Plan into your financial strategy, you can navigate uncertainties with confidence and enjoy a secure financial future.\u003C/p>\u003Cp>In essence, the Shriram Life Super Income Plan isn't just a plan- it's a pathway to financial resilience and peace of mind, ensuring that your hard-earned savings work for you efficiently throughout your life journey. Embrace the benefits of Super Income Plan today and pave the way for a prosperous tomorrow, regardless of your age or financial goals.\u003C/p>","category":"/blog/super-income-plan"},{"title":"Tax savings for salaried income: Super Income Plan benefits","heading":"Tax savings for salaried income: Super Income Plan benefits","short_description":"\u003Cp>Effectively managing personal finances requires a strategic approach to both preparing for future financial needs and minimizing tax liabilities.\u003C/p>","tile_image":[{"media_img":{"url":"https://cdn.shriramlife.com/slic-kalam/files/2024-12/6.%20Tax%20savings%20for%20salaried%20income_%20Super%20Income%20Plan%20benefits_0.jpg?VersionId=G37GPJ6ObJk6pNdF1dmQAs0r1Iyv6hNv","alt":"Tax benefits of insurance plan"},"media_svg":null,"media_svg_alt":"","media_document":null}],"posted_on":"2024-12-19T10:26:53","updated_on":"2024-12-19T10:27:00","read_more_title":"Know More","slug":"/tax-savings-for-salaried-income-super-income-plan-benefits","field_bl_tag":"\u003Ca href=\"/blog/guides/recent\" hreflang=\"en\">Recent\u003C/a>, \u003Ca href=\"/blog/guides/advice\" hreflang=\"en\">Advice\u003C/a>, \u003Ca href=\"/blog/guides/life-insurance\" hreflang=\"en\">Life Insurance\u003C/a>, \u003Ca href=\"/blog/guides/retirement\" hreflang=\"en\">Retirement\u003C/a>, \u003Ca href=\"/blog/guides/savings\" hreflang=\"en\">Savings\u003C/a>","description":"\u003Cp>Effectively managing personal finances requires a strategic approach to both preparing for future financial needs and minimizing tax liabilities. Salaried individuals often find themselves navigating these dual objectives to ensure long-term financial security. The Shriram Life Super Income Plan presents itself as an ideal solution tailored to address these challenges comprehensively. As a non-linked, non-participating individual savings life insurance plan such as \u003Ca href=\"https://www.shriramlife.com/life-insurance/assured-income-plan\" target=\"_blank\">Assured Income Plan\u003C/a>, it not only provides robust insurance coverage but also serves as a vehicle for wealth accumulation. This blog explores the nuances of the Shriram Life Super Income Plan, highlighting its flexible premium payment terms, guaranteed income benefits, and the substantial tax benefits of savings plans available under Section 80C of the Income Tax Act, 1961. By gaining a deeper understanding of these features, salaried individuals can strategically enhance their financial stability while optimizing their tax planning strategies with confidence.\u003C/p>\u003Ch2>\u003Cstrong>Understanding Shriram Life Super Income Plan\u003C/strong>\u003C/h2>\u003Cp>The Shriram Life Super Income Plan is a non-linked, non-participating individual savings life insurance plan. It serves dual purposes of providing life insurance coverage and generating wealth through regular payouts.\u003C/p>\u003Cp>Here’s a breakdown of its key features:\u003C/p>\u003Ch3>\u003Cstrong>1. Multiple Premium Payment Terms\u003C/strong>\u003C/h3>\u003Cp>One of the standout features of the Shriram Life Super Income Plan is its flexibility in premium payment. Policyholders can choose to pay premiums yearly, half-yearly, quarterly, or even monthly, depending on their financial preferences and capabilities.\u003C/p>\u003Cp>This flexibility ensures that the plan can be tailored to fit individual financial planning needs.\u003C/p>\u003Ch3>\u003Cstrong>2. Assured Earnings\u003C/strong>\u003C/h3>\u003Cp>Throughout the term of the plan, policyholders are assured of receiving benefits that act as a source of passive income. This predictable income stream can supplement other sources of income, providing stability and financial security to the insured and their dependents.\u003C/p>\u003Ch3>\u003Cstrong>3. Loans\u003C/strong>\u003C/h3>\u003Cp>An additional benefit of the plan is the option to avail loans against it. The loan amount is determined based on the surrender value of the policy at the time of loan application, offering liquidity and financial flexibility when needed.\u003C/p>\u003Ch2>\u003Cstrong>Benefits Overview\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>1. Death Benefits\u003C/strong>\u003C/h3>\u003Cp>In the unfortunate event of the insured’s demise, the Shriram Life Super Income Plan provides death benefits to the nominees or beneficiaries. The amount paid out is either the Death Sum Assured or the surrender benefit, whichever is higher, ensuring that loved ones are financially protected during challenging times.\u003C/p>\u003Ch3>\u003Cstrong>2. Maturity Benefits\u003C/strong>\u003C/h3>\u003Cp>If the insured survives till the end of the policy term, they receive the Guaranteed Maturity Sum Assured. This lump sum payment marks the conclusion of the policy term, providing a financial cushion for the policyholder’s future needs.\u003C/p>\u003Ch3>\u003Cstrong>3. Earning Benefits\u003C/strong>\u003C/h3>\u003Cp>A unique feature of the Shriram Life Super Income Plan is the Super Income Benefit. Starting from the end of the premium paying term and continuing until the policy term ends (or until demise, whichever comes earlier), policyholders receive monthly payouts. These payouts are calculated as a percentage of the annualized premium paid, offering a steady income stream that can support \u003Ca href=\"https://www.shriramlife.com/life-insurance/retirement-plan\" target=\"_blank\">retirement plan\u003C/a> or other financial goals.\u003C/p>\u003Ch3>\u003Cstrong>4. Flexibility in Premium Payments\u003C/strong>\u003C/h3>\u003Cp>The plan allows policyholders to choose from multiple premium payment terms, including yearly, half-yearly, quarterly, or monthly options. This flexibility accommodates varying financial capacities and ensures that individuals can adjust their contributions according to their income streams and financial goals.\u003C/p>\u003Ch3>\u003Cstrong>5. Loan Facility\u003C/strong>\u003C/h3>\u003Cp>Beyond its insurance and income benefits, the plan also offers the option to avail loans against the policy. This feature provides liquidity during emergencies or for planned expenditures, leveraging the policy’s surrender value as collateral and avoiding the need to liquidate investments prematurely.\u003C/p>\u003Ch3>\u003Cstrong>6. Additional Riders for Enhanced Coverage\u003C/strong>\u003C/h3>\u003Cp>Policyholders have the option to enhance their coverage with riders that cater to specific needs, such as critical illness, accidental death, or disability. These riders provide additional financial protection, ensuring comprehensive coverage against unforeseen circumstances that may impact the policyholder's financial stability.\u003C/p>\u003Ch2>\u003Cstrong>Tax Benefits Of Savings Plan\u003C/strong>\u003C/h2>\u003Cp>Beyond the comprehensive insurance coverage and income benefits, premiums paid under the Shriram Life Super Income Plan qualify for tax benefits of a savings plan under Section 80C of the Income Tax Act, 1961. This provision allows policyholders to reduce their taxable income by up to ₹1.5 lakhs per financial year, making it an attractive option for salaried individuals looking to optimize their tax planning strategies.\u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>The Shriram Life Super Income Plan stands out as a comprehensive financial solution for salaried individuals seeking to secure their future while optimizing tax benefits of savings plan. With its flexible premium payment terms, guaranteed income benefits, and the option to avail loans, this plan caters to diverse financial needs. Moreover, the tax benefits under Section 80C add a significant advantage, allowing policyholders to reduce their taxable income while building a secure financial foundation.\u003C/p>\u003Cp>For those considering long-term financial planning and seeking reliable insurance coverage coupled with tax-efficient savings, the Shriram Life Super Income Plan offers a balanced approach. By integrating this plan into your financial portfolio, you not only safeguard your family’s future but also align with prudent tax-saving strategies. Remember, it’s advisable to consult with a financial advisor to tailor the plan according to your specific goals and ensure comprehensive coverage based on your unique circumstances. Start securing your future today with a plan that offers both protection and prosperity.\u003C/p>","category":"/blog/advice"},{"title":"Comprehensive Guide on Annuity in Life Insurance","heading":"Comprehensive Guide on Annuity in Life Insurance","short_description":"\u003Cp>Planning for retirement is important for everyone because it will ensure one can have a steady source of income after one’s working life is over an\u003C/p>","tile_image":[{"media_img":{"url":"https://cdn.shriramlife.com/slic-kalam/files/2024-12/44.%20Comprehensive%20Guide%20on%20Annuity%20in%20Life%20Insurance_0.jpg?VersionId=rcYECkgBeO.rILNSgFjBFyDII9Wo4Yfx","alt":"Guide on Annuity in Life Insurance"},"media_svg":null,"media_svg_alt":"","media_document":null}],"posted_on":"2024-12-18T07:35:41","updated_on":"2024-12-18T07:35:47","read_more_title":"Know More","slug":"/comprehensive-guide-on-annuity-in-life-insurance","field_bl_tag":"\u003Ca href=\"/blog/guides/recent\" hreflang=\"en\">Recent\u003C/a>, \u003Ca href=\"/blog/guides/advice\" hreflang=\"en\">Advice\u003C/a>, \u003Ca href=\"/blog/guides/life-insurance\" hreflang=\"en\">Life Insurance\u003C/a>","description":"\u003Cp>Planning for retirement is important for everyone because it will ensure one can have a steady source of income after one’s working life is over and regular income stops post-retirement. While the Indian market provides numerous financial products for retirement planning, annuity plans are often desirable. In this blog, we cover what is an annuity plan, its benefits, different types of annuity plans, etc., so you can make informed retirement planning decisions.\u003C/p>\u003Ch2>\u003Cstrong>What is Annuity in Life Insurance?\u003C/strong>\u003C/h2>\u003Cp>An annuity is a formal, legal contract between a policyholder and an insurer that requires the insurer to pay the policyholder immediately or later on specified dates, in exchange for a lump sum premium payment or regular smaller premium payments.\u003C/p>\u003Cp>Since annuities are designed to provide guaranteed payment on pre-agreed terms, they are considered the safest retirement planning tool for most Indians. There are different types of annuity in life insurance, each with unique features, positives, and drawbacks, so invest in plans that align with your long-term financial goals.\u003C/p>\u003Ch2>\u003Cstrong>How do Annuities Work?\u003C/strong>\u003C/h2>\u003Cp>An annuity plan is a risk-free retirement tool in which the insurance company agrees to pay a specific amount immediately after a lump sum premium payment or later in the future (mostly retirement years) against regular premium payments.\u003C/p>\u003Cp>If you plan to rely on annuity payments as the major post-retirement income source, estimate your approximate financial requirements during the retirement phase and invest accordingly. You can use an online annuity plan calculator to ease the process.\u003C/p>\u003Ch2>\u003Cstrong>Benefits of Annuity Plan\u003C/strong>\u003C/h2>\u003Cp>Now that you have a basic understanding of what is an annuity, let’s explore the various benefits attached to this plan.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Guaranteed Income\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Annuity plans are among the best \u003Ca href=\"https://www.shriramlife.com/life-insurance/retirement-plan\" target=\"_blank\">Retirement Plans\u003C/a> because they guarantee stable and predictable payments, bringing ease and comfort during retirement. However, the returns may fluctuate for unit-linked annuity plans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Lifetime Coverage\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you research ‘what is Annuity Insurance’ online and the different types of annuity insurance, you will come across some life annuities that provide lifetime income options. These plans ensure your expenses don’t outlive your savings till you’re alive.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The premiums you pay toward annuity plans are exempt from tax u/s 80 C, making them great tax-saving tools. Annuity earnings are covered by tax-deferred growth, meaning these earnings won’t attract tax until you start making withdrawals.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Risk-free Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Fixed annuities provide risk-free and predictable payments, irrespective of the market conditions. Fixed annuities are ideal if you have a low-risk profile and want to enjoy a steady, fixed income during retirement.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Payment Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Policyholders can choose to receive payments monthly, quarterly, or yearly, depending on their preference and financial obligation. It provides flexibility and ease in managing finances during golden years.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Potential for Higher Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Investing in unit-linked annuity plans, like \u003Ca href=\"https://www.shriramlife.com/life-insurance/pension-plus\" target=\"_blank\">Shriram Life Pension Plus\u003C/a>, enables policyholders to build wealth over a period through market-linked gains.\u003C/p>\u003Ch2>\u003Cstrong>Different Types of Annuity Plans\u003C/strong>\u003C/h2>\u003Cp>The best way to understand what is annuity insurance is to get into the specifics of the product instead of stopping at the fundamentals. Currently, the Indian market has the following different types of annuity plans:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Immediate Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>As the name suggests, an \u003Ca href=\"https://www.shriramlife.com/life-insurance/immediate-annuity-plus\" target=\"_blank\">immediate annuity plan\u003C/a> is designed for individuals who want to receive income after investing a one-time, single payment. These plans can start giving regular income as early as within a month. Immediate annuity policies are better suited for those nearing retirement.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Deferred Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Deferred annuity plans are tailored for individuals who want to accumulate wealth over time before receiving payouts. You can invest in this plan by making a lump sum or regular premium payments, and these investments will grow during the accumulation phase. Unlike immediate annuity plan, deferred annuity plans’ payment phase begins at a later date, typically after retirement. It is well suited for young individuals or those in their 40s or 50s.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Fixed Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Fixed annuities are great for people who want a stable and predictable income to lead a comfortable post-retirement life. They are considered the safest annuity plan for individuals who seek financial security, regardless of market conditions. Insurers pay a fixed rate of interest on such investments and the payment also remains fixed unless specified otherwise in the policy documents. You can consider diversifying your retirement portfolio by investing in our \u003Ca href=\"https://www.shriramlife.com/life-insurance/savings-plan\" target=\"_blank\">Savings Plans\u003C/a> and \u003Ca href=\"https://www.shriramlife.com/life-insurance/protection-plan\" target=\"_blank\">Protection Plans\u003C/a> for additional income potential.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Variable Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Variable Annuities are a dynamic retirement planning tool because they provide variable returns in exchange for a lump sum investment. The premiums paid in Variable Annuities are invested in different financial securities like mutual funds, bonds, stocks, etc., whose returns are tied to market performance. You should choose such annuity plans only if you have a moderate to high-risk profile.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Life Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A life annuity plan is designed to give you a steady income stream throughout your life. It ensures you don’t outlive your savings, giving you a relatively comfortable life. Some life annuities extend this benefit to the policyholder’s spouse so they continue receiving timely payments even after their partner’s death.\u003C/p>\u003Ch2>\u003Cstrong>How to Select an Annuity Plan?\u003C/strong>\u003C/h2>\u003Cp>Simply knowing what is annuity insurance won’t help you choose the right plan aligned with your financial goals. If you want to select the best annuity plan for your retirement, follow the below-mentioned tips:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Assess Your Financial Goals\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Before looking for any retirement annuity plans, calculate your anticipated monthly expenses during retirement, including daily expenses, potential medical costs, unexpected expenses, etc. Now, search for plans that can help you receive the estimated figure.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Evaluate Risk Tolerance\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Different annuities have varying levels of risks involved, so choose a plan that aligns with your preferred risk tolerance level. For example, people with low-risk profiles can stick to fixed annuities, while those with moderate to high-risk profiles can explore variable annuity plans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Factor in Inflation\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Inflation can erode your purchasing power significantly, and even affect your retirement fund if you don’t consider it during your planning phase. Consider looking for annuity plans with inflation-adjusted payouts, so your income stays at par with the rising living cost.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Research about the Insurer\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A trustworthy insurer with a good track record will provide a hassle-free and seamless experience throughout the policy tenure. So, always check the insurer’s reputation, claim settlement ratio, reviews, news, etc., before finalizing one. It will save you from unwanted stress later in life.\u003C/p>\u003Ch2>\u003Cstrong>Compare Similar Annuity Plans\u003C/strong>\u003C/h2>\u003Cp>Whether you’re looking for deferred & immediate annuity or fixed annuity, you should always compare similar types of policies before finalizing one. Comparing similar options will ensure you get a better plan with the best features and reasonable premiums.\u003C/p>\u003Ch2>\u003Cstrong>Which Annuity Plan is Most Suitable for You?\u003C/strong>\u003C/h2>\u003Cp>Different annuity plans are recommended for people with varying goals and risk appetite. For example, an immediate annuity can be more suitable for retirees or those nearing retirement seeking instant income. On the other hand, deferred annuities can be more suitable for young individuals who want to build wealth and a large retirement fund over time.\u003C/p>\u003Cp>Fixed annuities are great for people seeking a stable and risk-free income during retirement, whereas variable annuities are ideal for people with moderate to high-risk appetites. Always evaluate your financial condition, goals, obligations, etc., before choosing the right annuity plan. \u003C/p>\u003Ch2>\u003Cstrong>What is the Best Time to Buy an Annuity Plan?\u003C/strong>\u003C/h2>\u003Cp>It depends on your current life stage and financial readiness. People in their 30s and 40s can consider buying a deferred annuity plan because it builds a substantial retirement fund over a period, generating higher returns. Those nearing retirement or in their 50s and 60s can purchase immediate annuity plans to convert their accumulated savings into a steady income stream.\u003C/p>\u003Ch3>\u003Cstrong>Example of an Annuity\u003C/strong>\u003C/h3>\u003Cp>Atal Pension Yojana (APY) is a great example of an annuity because this government-backed pension scheme works exactly like traditional annuity plans. It requires individuals to pay a fixed premium during their active working years. Once they reach the age of 60, they can start receiving pension payment for life. The payment amount is determined based on the contribution amount and the age at which they started contributing. The pension benefit can be passed to their spouse in case of their death. \u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>Your retirement years should be reserved for enjoying life, not worrying about daily expenses. While numerous retirement plans in the market can be strategically chosen to build a significant retirement fund, an annuity plan comes across as the ideal option for most individuals. If you want a sense of stability and predictability for post-retirement income, consider checking our \u003Ca href=\"https://www.shriramlife.com/life-insurance/assured-income-plan\" target=\"_blank\">Shriram Life Assured Income Plan\u003C/a>. It features the benefits of savings, retirement, and \u003Ca href=\"https://www.shriramlife.com/life-insurance/child-plan\" target=\"_blank\">child plans\u003C/a> in a single policy.\u003C/p>\u003Cp>This plan provides a regular income option to assist you with your monthly expenses. Our \u003Ca href=\"https://www.shriramlife.com/life-insurance/early-cash-plan\" target=\"_blank\">Shriram Life Early Cash Plan\u003C/a> is a better choice if you want to get a larger lump sum on retirement or policy maturity. It features cash bonus guarantee, power of compounding, life cover, etc., to help you achieve your long-term financial goals. You can also explore the different annuity plans provided by Shriram Life Insurance to secure your golden years.\u003C/p>","category":"/blog/advice"},{"title":"What Is a Life Insurance Premium and How Is It Calculated?","heading":"What Is a Life Insurance Premium and How Is It Calculated?","short_description":"\u003Cp>Buying life insurance can be one of the prudent, responsible decisions to secure your family’s future.\u003C/p>","tile_image":[{"media_img":{"url":"https://cdn.shriramlife.com/slic-kalam/files/2024-12/43.%20Life%20Insurance%20Premium_%20What%20it%20is_%20How%20does%20it%20calculated__0.jpg?VersionId=Lc7uH5s7_p8CRqDBVB9zmnK8pj6a4BI4","alt":"How is life insurance premium calculated?"},"media_svg":null,"media_svg_alt":"","media_document":null}],"posted_on":"2024-12-17T05:19:39","updated_on":"2024-12-17T05:19:44","read_more_title":"Know More","slug":"/life-insurance-premium-what-is-it-how-does-it-calculate","field_bl_tag":"\u003Ca href=\"/blog/guides/recent\" hreflang=\"en\">Recent\u003C/a>, \u003Ca href=\"/blog/guides/advice\" hreflang=\"en\">Advice\u003C/a>, \u003Ca href=\"/blog/guides/life-insurance\" hreflang=\"en\">Life Insurance\u003C/a>","description":"\u003Cp>Buying life insurance can be one of the prudent, responsible decisions to secure your family’s future. However, the world of life insurance can appear overwhelming and difficult to navigate because of its terminologies. One of the most common words you’ll see throughout your policy search is ‘insurance premium.’ This seemingly simple term is the financial backbone of all life insurance policies. This blog aims to simplify the understanding of insurance premium and explain how it is calculated so you can proceed with your research with confidence and ease.\u003C/p>\u003Ch2>\u003Cstrong>What is Insurance Premium?\u003C/strong>\u003C/h2>\u003Cp>When one is exploring insurance policies, it is useful to begin by understanding what is life insurance premium. You can view it as an amount paid/payable to the insurance company to keep your policy active. One way to think of it is the cost of securing financial protection for your loved ones. Insurance premiums can be paid at varying frequencies, depending on the policy’s terms. Life insurance premium varies from one policy and individual to another and is calculated based on various factors.\u003C/p>\u003Ch2>\u003Cstrong>How Does Insurance Premium Work?\u003C/strong>\u003C/h2>\u003Cp>When you make the first insurance premium payment after signing the life insurance policy documents, you enter into a legal contract with the insurer. It makes the insurance company liable to pay the agreed sum assured to the nominee in case of your death, provided the policy was active at the time of death.\u003C/p>\u003Cp>Continuous premium payments ensure the validity of the policy. If you’re buying your first life insurance policy and are unsure of how much premium it will require, use an online life insurance premium calculator to get an approximate estimate.\u003C/p>\u003Ch2>\u003Cstrong>How is Insurance Premium Calculated?\u003C/strong>\u003C/h2>\u003Cp>Knowing what is the premium for life insurance isn’t enough to find the right policy; you must also know how insurers calculate premiums to get the best policy with competitive premiums. While insurers use several factors to calculate insurance premiums, the following are the most common:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Age\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Age plays a crucial role because elders are perceived as more prone to diseases and life-threatening conditions than their younger counterparts. Hence, premiums for young individuals are comparatively lower than those for elders.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Lifestyle\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Insurers generally keep higher premiums for individuals who frequently engage in risky activities like hiking, diving, racing, etc. You can expect slightly lower premiums if you don’t participate in similar activities.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Medical History\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Assessing medical history helps insurers determine the risk associated with an individual’s life. People who have suffered severe diseases in the past, underwent surgery, or have a family history of critical illnesses, etc., are more likely to be charged higher premiums than those who don’t.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Profession\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>People employed in risky professions or industries, such as mining, the oil & gas sector, etc., are required to pay higher premiums because they’re regularly exposed to working environments that have some inherent risks.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Policy Duration\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A longer policy term typically increases the insurer’s risk exposure. Hence, longer policies may have slightly higher premiums than shorter policies. However, exceptions are always there.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Income\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Many insurers assume higher-income people have higher coverage requirements and a relatively lower perceived financial risk. Hence, premiums in such cases are comparatively lower.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Marital Status & Dependents\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The number of dependents influences the eligibility for life insurance coverage and premium payment capacity. Some insurers may reduce the sum assured cover and premium if you have a higher number of dependents.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Sum Assured Amount\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The higher the policy’s sum assured amount, the higher the premium and vice-versa.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Rider Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Every rider has an additional cost. Your premium will increase in direct proportion to the number of riders you add to the main policy.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Residential Location\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>All residential locations have varying crime rates and environments. Hence, those residing in safer localities may get lower premiums than those living in risky locations.\u003C/p>\u003Cp>These factors determine premiums for all \u003Ca href=\"https://www.shriramlife.com/life-insurance\" target=\"_blank\">types of life insurance\u003C/a>, but some insurers can have additional factors in place. If you’re overwhelmed with premium calculations, always use a reliable life insurance premium calculator online to get approximate premium estimates.\u003C/p>\u003Ch2>\u003Cstrong>Types of Insurance Premiums\u003C/strong>\u003C/h2>\u003Cp>Now that you’ve understood what is life insurance premium is and how it’s calculated, let’s take a quick look at some other common types of insurance premiums shared below:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Health Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>It is the amount you pay to keep your health insurance policy active. A health insurance policy typically covers medical expenses like hospitalization, surgeries, treatments, etc. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Auto Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>As the name suggests, it is the amount you pay to insure your vehicles against financial damages arising from potential risks like accidents, theft, natural disasters, etc.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Home owners Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Homeowners make periodic premium payments to financially protect their homes and belongings against risks like fire, natural calamities, theft, and riots.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Renters Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Renters premium is the cost you pay to insure the contents of the rented home, such as furniture, appliances, personal belongings, and other possessions, against unfortunate events like theft, damage, fire, etc.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Life Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A life insurance premium is paid to secure your family’s financial future in case of your death. \u003C/p>\u003Ch2>\u003Cstrong>Factors to Consider When Buying an Insurance Premium Policy\u003C/strong>\u003C/h2>\u003Cp>There are different types of life insurance products in the Indian market, so always use the following factors to find, evaluate, compare, and buy the right policy.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Financial Requirements\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>You should begin by analyzing your current financial condition and deciding how much you want your family to receive for financial security in case of your death. In addition to insurance, you can consider investing in our Savings Plans or Protection Plans to diversify the safety net.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Affordability\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>It is the most crucial factor that no one should ignore. Policies are generally long-term and demand steady premium payments to ensure validity. So, pick policies with reasonable premiums that can be paid easily and consistently. Consider doing a life insurance premium calculation based on your financial standing to maintain a balance between adequate coverage and affordability.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Inclusions and Exclusions\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>No two policies are designed equally, so you must go through the policy’s inclusions and exclusions for clarity. Also read the terms and conditions regarding coverage, life insurance premium paying terms, exclusions, riders, maturity benefits, etc., to avoid hiccups at a later stage.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Claim Settlement Ratio\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Check the insurer’s previous claim settlement records to ensure your family receives the policy amount without hassle.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Riders\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If standard policy coverage seems insufficient, you can purchase riders that enhance the coverage, providing additional benefits to beneficiaries. Not all insurers provide the same riders, so check the insurer-specific website for accurate details. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Policy Duration \u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>You should always pick a policy duration that aligns with your long-term financial goals. It should also make it easier for you to make consistent premium payments without putting financial strain. \u003C/p>\u003Ch2>\u003Cstrong>What are the Key Factors Affecting Insurance Premium?\u003C/strong>\u003C/h2>\u003Cp>Numerous factors affect insurance premiums, such as the person’s age, medical history, marital status, number of dependents, profession, location, and much more. We have discussed all these factors above, so head to the ‘how is insurance premium calculated’ section for detailed explanation. \u003C/p>\u003Ch2>\u003Cstrong>What Determines an Insurance Premium?\u003C/strong>\u003C/h2>\u003Cp>In India, actuaries are responsible for determining insurance premiums. They use several financial theories, relevant statistics, and formulas to calculate the probability of various events, such as accidents, unemployment, marriage, retirement, etc., to determine the cost required to cover future claims, administrative expenses, and profit margin. They also use various factors, as discussed above, to ensure they finalize financially viable and fair premiums.\u003C/p>\u003Ch2>\u003Cstrong>How to Pay Insurance Premiums?\u003C/strong>\u003C/h2>\u003Cp>Insurance premium payments can be made via multiple options. You can pay online using net banking, debit and credit cards, mobile apps, and online wallets like Gpay, Paytm, etc. Offline payments can also be made by issuing checks. Busy professionals can issue online standing instructions to their credit card partners for fixed, automatic deductions. Policyholders have the option to choose their premium payment frequency, such as monthly, quarterly, semi-annually, annually, or a single payment, depending on their preference.\u003C/p>\u003Ch2>\u003Cstrong>What does an Insurance Company do with the Premiums?\u003C/strong>\u003C/h2>\u003Cp>Insurance companies use the premiums to cover potential claims arising from insured events. They also invest a portion of the premium in various financial securities and instruments, such as bonds, stocks, etc., to generate additional income. This income offsets operational costs and maintains competitive, fair pricing for all insurance policies.\u003C/p>\u003Ch2>\u003Cstrong>What is an Actuary?\u003C/strong>\u003C/h2>\u003Cp>Actuary is a certified professional trained to use advanced statistical and mathematical methods to assess and manage financial risks and uncertainties, especially in the insurance industry. They calculate the potential cost of future events, helping insurance companies design policies to minimize those risks. \u003Cbr />Since actuaries are qualified experts in analyzing financial implications of uncertainty and risk through complex models based on social factors, demographics, economics, etc., they finalize the premiums for different types of life insurance products.\u003C/p>\u003Ch2>\u003Cstrong>What Happens if You Stop Paying Life Insurance Premiums?\u003C/strong>\u003C/h2>\u003Cp>Delay in premium payment or entirely stopping premium payments can result in policy lapse. As a result, your family no longer remains eligible to claim the policy benefits. Most insurers provide a grace period to enable policyholders to make timely payments without incurring any penalty or coverage termination.\u003C/p>\u003Cp>The grace period can be 15-30 days, but it varies from insurer to insurer. We encourage policyholders to review their policy’s life insurance premium-paying terms and grace period to avoid untimely policy lapse or penalties.\u003C/p>\u003Ch2>\u003Cstrong>How Can I Save on my Life Insurance Premiums?\u003C/strong>\u003C/h2>\u003Cp>Buying a policy when you’re young is the best way to save on insurance premium payment. Maintaining a healthy lifestyle, avoiding risky activities, comparing quotes before finalizing a policy, and disclosing pre-existing medical conditions are additional ways to save on your premiums. We have discussed how different factors influence life insurance premium above, so you can use that information for extra savings. \u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>Having the right life insurance policy will ensure your family’s financial needs are met, even when you’re not around. To enjoy optimal benefits of life insurance policies, always invest in a policy with reasonable premiums and adequate coverage. You can explore our \u003Ca href=\"https://www.shriramlife.com/life-insurance/early-cash-plan\" target=\"_blank\">Shriram Life Early Cash Plan\u003C/a> because it provides dual benefits of wealth creation through compounding and cash bonus guarantee, while giving life insurance protection.\u003C/p>\u003Cp>Our \u003Ca href=\"https://www.shriramlife.com/life-insurance/assured-income-plan\" target=\"_blank\">Shriram Life Assured Income Plan\u003C/a> is another great option that provides assured income and life insurance cover at low premium payment plans. We have various \u003Ca href=\"https://www.shriramlife.com/life-insurance/retirement-plan\" target=\"_blank\">retirement plans\u003C/a>, \u003Ca href=\"https://www.shriramlife.com/life-insurance/protection-plan\" target=\"_blank\">protection plans\u003C/a>, etc., designed to achieve different financial goals, so explore the plans right for you. Consider using the information in this guide and an online life insurance premium calculator to pick the right policy with reasonable premiums.\u003C/p>","category":"/blog/advice"},{"title":"What is a Pension Payment Order and Why is it Important for Pensioners?","heading":"What is a Pension Payment Order and Why is it Important for Pensioners?","short_description":"\u003Cp>Timely pension payments are the backbone of a stable and worry-free life post-retirement.\u003C/p>","tile_image":[{"media_img":{"url":"https://cdn.shriramlife.com/slic-kalam/files/2024-12/52.%20What%20is%20a%20Pension%20Payment%20Order%20%28PPO%29%20and%20Why%20is%20it%20Important__0.png?VersionId=tvKRLsWdZV.Oa6i1x1RgASb2Tg2E4P58","alt":"What is Pension Payment Order and Why is it Important?"},"media_svg":null,"media_svg_alt":"","media_document":null}],"posted_on":"2024-12-16T06:00:21","updated_on":"2024-12-16T06:01:35","read_more_title":"Know More","slug":"/what-is-a-pension-payment-order-and-why-is-it-important-for-pensioners","field_bl_tag":"\u003Ca href=\"/blog/guides/advice\" hreflang=\"en\">Advice\u003C/a>, \u003Ca href=\"/blog/guides/retirement\" hreflang=\"en\">Retirement\u003C/a>, \u003Ca href=\"/blog/guides/recent\" hreflang=\"en\">Recent\u003C/a>, \u003Ca href=\"/blog/guides/life-insurance\" hreflang=\"en\">Life Insurance\u003C/a>","description":"\u003Cp>Timely pension payments are the backbone of a stable and worry-free life post-retirement. In fact, it is the only income source some individuals will have after retirement. If you’re nearing retirement, you must start the process of obtaining a Pension Payment Order (PPO) a few months before your retirement date so you can start receiving the pension benefits right after your retirement. \u003C/p>\u003Cp>Without a PPO, your pension amount can be withheld, delayed, or lowered, creating unwanted stress. This article aims to help government and public sector employees registered under the Employee Provident Fund (EPF) understand the fundamentals and importance of PPO. It will empower them with the knowledge needed to obtain a PPO and plan their retirement better.\u003C/p>\u003Ch2>\u003Cstrong>Introduction to Pension Payment Order (PPO)\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>Definition and Overview\u003C/strong>\u003C/h3>\u003Cp>A Pension Payment Order (PPO) is an important legal document that acts as an official authorization for pension disbursement. It is a detailed document that lists crucial details, such as the pensioner’s name, retirement date, last drawn salary, pension amount payable, mode of payment, pensioner’s bank account details, etc.\u003C/p>\u003Cp>This order is obtained after a thorough review of the retiree’s service records, pension entitlements, and other relevant details so the final rights and obligations can be determined. If you’re registered under the EPS pension scheme, you will need this order to receive consistent pension income throughout your retirement years.\u003C/p>\u003Ch3>\u003Cstrong>Purpose and Importance\u003C/strong>\u003C/h3>\u003Cp>Since a PPO facilitates the pension disbursement process and determines the pension amount, retirees can rest assured of receiving a fixed income every month in their non-working years. The details in this order can help them plan their retirement expenses for a smooth and stress-free life. \u003Cbr />We recommend not relying on pension retirement benefits alone and investing in reliable retirement and pension solutions during active work years for better returns. \u003C/p>\u003Ch2>\u003Cstrong>Components of a PPO\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>PPO Number\u003C/strong>\u003C/h3>\u003Cp>Every PPO order contains a unique PPO number that helps identify a pensioner registered under the Employee Provident Fund (EPF). It is a 12-digit alphanumeric code used as a reference number for all pension-related transactions and communications. Whether you want to file a pension-related complaint to the EPFO pension authority or track your pension payments, you will always need your PPO number.\u003C/p>\u003Ch3>\u003Cstrong>Pensioner’s Details\u003C/strong>\u003C/h3>\u003Cp>A PPO lists the pensioner’s details, such as their date of retirement, date of birth, last drawn salary, pension-paying authority, pension benefits, bank details, etc. All these details are obtained after a thorough pension verification process, which facilitates error-free, hassle-free, and timely pension disbursement to the retiree.\u003C/p>\u003Ch3>\u003Cstrong>Pension Amount and Date of Commencement\u003C/strong>\u003C/h3>\u003Cp>It is the most crucial component of any PPO because it offers clarity about the fixed monthly payments a retiree will receive, along with details of the first payment date. This information can help retirees plan their monthly and annual budgets accordingly. If you’re entitled to a big pension after retirement, consider investing in reliable pension fund management solutions for diversifying retirement income. \u003C/p>\u003Ch2>\u003Cstrong>Why is PPO Important in Retirement Planning?\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>Ensures Financial Stability\u003C/strong>\u003C/h3>\u003Cp>Retirees registered under the EPS pension scheme can use their PPO to plan their retirement. PPO guarantees a steady and predictable income, reducing retiree’s dependence on their savings. This financial cushion makes it easier to plan expenses and investments for a secure and stable future.\u003C/p>\u003Ch3>\u003Cstrong>Complements Life Insurance Products\u003C/strong>\u003C/h3>\u003Cp>While pensions provide financial security during retirement, no one should rely on pensions as the sole income source during non-working years. It can be best used as a complementary financial tool with goal-aligned life insurance products, like our \u003Ca href=\"https://www.shriramlife.com/life-insurance/early-cash-plan\" target=\"_blank\">Early Cash Plan\u003C/a> and \u003Ca href=\"https://www.shriramlife.com/life-insurance/pension-plus\" target=\"_blank\">Pension Plus\u003C/a>. A diversified retirement plan like this strikes the perfect balance of consistent income and emergency support. \u003C/p>\u003Ch3>\u003Cstrong>Acts as a Proof of Pension Entitlement\u003C/strong>\u003C/h3>\u003Cp>Employees entitled to EPFO pension will need a valid Pension Payment Order (PPO) as legal proof of a pensioner’s entitlement to pension benefits. This order will always come in handy while handling legal matters related to pensions or tracking pension payments and complaints. It will ensure you continue to enjoy financial stability in the form of timely, predictable pension income. \u003Cbr />Obtaining a PPO and Choosing the Right Retirement Plan\u003C/p>\u003Ch3>\u003Cstrong>Application Process\u003C/strong>\u003C/h3>\u003Cp>You can apply for a PPO by submitting a pension application to the Accountant General (A&E) through your department. After processing the pension papers, the Accounts Office will issue the Pension Payment Order (PPO). If you want to strengthen your financial security by diversifying your retirement income, we recommend choosing the right retirement plan.\u003C/p>\u003Cp>The retirement plan’s application process will vary depending on the plan provider, so we recommend checking the precise application process after finalizing a retirement and pension fund management provider. You can explore our retirement plans to find goal-aligned options along with their detailed application processes. \u003C/p>\u003Ch2>\u003Cstrong>Required Documentation\u003C/strong>\u003C/h2>\u003Cp>You will need the following documents while applying for a Pension Payment Order (PPO):\u003C/p>\u003Cul>\u003Cli>Identity proof\u003C/li>\u003Cli>Age proof\u003C/li>\u003Cli>Bank account details for pension disbursement \u003C/li>\u003Cli>Two passport-size joint photographs with your spouse duly attested by the Head of Office\u003C/li>\u003Cli>Two copies of identification marks duly attested by a Gazetted Officer\u003C/li>\u003Cli>Two sets of specimen signatures duly attested by a Gazetted Officer\u003C/li>\u003Cli>Family details, including the age, marital status, and details of handicapped members (if any)\u003C/li>\u003Cli>Updated service book\u003C/li>\u003Cli>Death certificate or Legal Heirship certificate for family pension\u003C/li>\u003Cli>Form 19\u003C/li>\u003Cli>Nomination for Life Time Arrears of CVP/Gratuity/Pension\u003C/li>\u003C/ul>\u003Cp>When applying for a retirement plan, you will typically need identity and age proof, along with other documentation as specified by the retirement plan provider. \u003C/p>\u003Ch2>\u003Cstrong>Common Issues with PPO and Retirement Planning Solutions\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>Lost PPO Number\u003C/strong>\u003C/h3>\u003Cp>Losing a PPO number for any reason can affect your pension disbursement process or make it challenging to raise complaints to relevant authorities or track pension-related transactions. If you ever lose your PPO number, contact your bank or Pension Disbursing Authority (PDA) for assistance. Alternatively, you can also visit the EPFO pension website to access the pensioner’s portal and find your PPO number by providing your bank account number or Employee Provident Fund (EPF) account number. \u003C/p>\u003Ch3>\u003Cstrong>Errors in PPO Details\u003C/strong>\u003C/h3>\u003Cp>While pension verification requires thorough review, it doesn’t eliminate any chances of accidental errors in the issued PPO. Incorrect date of birth, bank details, family member list, revised pay, etc., are some common errors reported in PPOs, but they can be corrected by contacting your Head of Office or Pension Disbursing Agency (PDA).\u003C/p>\u003Ch2>\u003Cstrong>Maximize Your Retirement Income with Shriram Life Insurance\u003C/strong>\u003C/h2>\u003Cp>EPFO pension often forms a significant portion of one’s retirement income, but you cannot get it automatically on retirement. You need a PPO order that authorizes and streamlines your pension payments. This legal document is crucial for your retirement planning because it lists the steady income you will receive during your non-working years. If you want to live a life free of financial challenges after retirement, we recommend combining your EPS pension scheme with complimentary insurance and \u003Ca href=\"https://www.shriramlife.com/life-insurance/retirement-plan\" target=\"_blank\">retirement plans\u003C/a> from Shriram Life Insurance for extra retirement benefits. Our retirement plans such as \u003Ca href=\"https://www.shriramlife.com/life-insurance/immediate-annuity-plus\" target=\"_blank\">Shriram Life Immediate Annuity Plus\u003C/a> and \u003Ca href=\"https://www.shriramlife.com/life-insurance/assured-income-plan\" target=\"_blank\">Shriram Life Assured Income Plan\u003C/a> can give you the benefits of regular savings and assured income, easing your retirement years.\u003Cbr /> \u003C/p>","category":"/blog/advice"},{"title":"Understanding the Benefits of NPS and PPF for Retirement","heading":"Understanding the Benefits of NPS and PPF for Retirement","short_description":"\u003Cp>Every working individual dreams of living a comfortable and worry-free retirement life.\u003C/p>","tile_image":[{"media_img":{"url":"https://cdn.shriramlife.com/slic-kalam/files/2024-12/51.%20Understanding%20the%20Benefits%20of%20NPS%20and%20PPF%20for%20Retirement_0.png?VersionId=mS10E7cDSwwnDbXd.TIag1FfaKINRqqW","alt":"Understanding the benefits of NPS and PPF"},"media_svg":null,"media_svg_alt":"","media_document":null}],"posted_on":"2024-12-13T07:16:55","updated_on":"2024-12-13T07:17:04","read_more_title":"Know More","slug":"/understanding-the-benefits-of-nps-and-ppf-for-retirement","field_bl_tag":"\u003Ca href=\"/blog/guides/recent\" hreflang=\"en\">Recent\u003C/a>, \u003Ca href=\"/blog/guides/advice\" hreflang=\"en\">Advice\u003C/a>, \u003Ca href=\"/blog/guides/life-insurance\" hreflang=\"en\">Life Insurance\u003C/a>","description":"\u003Cp>Every working individual dreams of living a comfortable and worry-free retirement life. This can only become a reality with strategic retirement planning. Whether you’re working in an start up or employed in a top MNC, you must invest in secure retirement plans in India that align with your retirement goals.\u003C/p>\u003Cp>It will ensure you receive a steady income post-retirement. While there are numerous retirement plans in India, NPS and PPF are the most popular choices. These government-backed retirement schemes have a lot in common, yet there are differences too.\u003C/p>\u003Cp>Not knowing the specific benefits of each may result in making suboptimal choices that significantly lower the retirement funds. This article highlights a clear NPS and PPF comparison, along with fundamentals and clear benefits, so you can plan and invest correctly for optimal gains.\u003C/p>\u003Ch2>\u003Cstrong>Overview of NPS and PPF\u003C/strong>\u003C/h2>\u003Cp>NPS is a voluntary pension system for all Indian citizens, including NRIs and OCIs. It is currently regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and is considered one of the best market-linked defined contribution schemes that enable people to build their retirement income and save tax. Many people are drawn to this scheme because of the lucrative NPS tax benefits that we will discuss later in this article.\u003C/p>\u003Cp>For risk-averse individuals, PPF is typically the first consideration for retirement planning in India. It is one of the oldest long-term savings schemes regulated by the Ministry of Finance that provides guaranteed returns. Unlike NPS, your PPF investment isn’t affected by market volatility, making it a safe retirement plan for conservative investors who want assured retirement funds.\u003C/p>\u003Ch2>\u003Cstrong>Key Benefits of NPS\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexibility\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you assess NPS vs. PPF regarding flexibility, NPS clearly wins. It allows you to decide how much of the invested amount you want to allocate to equity, corporate debt, government bonds, and alternative investment funds.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Self-employed individuals can avail NPS tax benefits u/s 80CCD (1). They are eligible for tax deductions up to 20% of their gross income, with a ceiling of ₹1.50 lakh u/s 80 CCE. An additional deduction of ₹50, 000 is allowed over the ₹1.50 lakh limit u/s 80 CCE.\u003C/p>\u003Cp>If you’re an employed individual, you can claim up to 10% of salary (basic + DA) u/s 80 CCD (1) on your contribution as deduction, with a ceiling of ₹1.50 lakh limit u/s 80 CCE, and an additional ₹50, 000 u/s 80 CCD (1B).\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Low Cost\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Besides the generous NPS tax benefits, this scheme also provides the lowest account maintenance costs. For example, the annual Permanent Retirement Account (PRA) maintenance charge per account by CRA is ₹69, a charge per transaction is ₹3.75, etc. Such low costs make NPS a relatively affordable retirement product compared to other similar options.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Portability\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>In the NPS vs. PPF comparison, NPS provides greater ease of portability. Whether you’re switching to a new company in a new city or changing your career path altogether, you can continue using the same PRAN for convenience. All NPS accounts can be easily transferred across locations and employment, provided you update the details linked to your PRAN.\u003C/p>\u003Ch2>\u003Cstrong>Key Benefits of PPF\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Safety and Security\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Conservative investors often include PPF in their retirement planning in India because of its assured returns. Since the government sets PPF account rates, investors can expect risk-free and guaranteed returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax-free Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>While NPS tax benefits are limited, PPF provides full tax exemption on the maturity and earned interest amount. You can also claim a tax deduction on the PPF contribution in a financial year u/s 80C, subject to a maximum of ₹1.50 lakh. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Long-term Savings\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>PPFs have a lock-in period of 15 years to support long-term financial goals during retirement. Working individuals in their mid-30s and 40s should include PPF in their retirement planning in India because it will give them a guaranteed and steady monthly income post-retirement. Avoid making partial or early withdrawals before the maturity period to get optimal returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Loan Facility\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>PPFs have a long lock-in period and partial withdrawals cannot be made in the first six years. However, you can take a loan against your accumulated PPF balance if you need urgent funds during this phase. You can get a loan between the 3rd and 6th year. The loan amount cannot exceed 25% of the PPF balance available two years before placing a loan application.\u003C/p>\u003Ch2>\u003Cstrong>Comparing NPS and PPF\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Risk and Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you’re evaluating the NPS vs. PPF option from a risk perspective, PPF emerges as the safest option. Since PPF is backed and regulated by the Ministry of Finance, investors can rest assured of receiving guaranteed and risk-free funds during retirement. NPS is a better option for more risk-tolerant individuals because all NPS returns are market-linked, making them volatile. Since risk and returns are directly proportional, NPS has a relatively greater potential to generate higher returns than PPF.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Suitability\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Investors wanting assured, steady, risk-free retirement funds must choose PPF over NPS. Those with a risk-taking appetite can consider investing in NPS for potentially higher returns. You can explore our retirement plans to find options aligned to your risk appetite and retirement goals.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Diversification\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The best part about retirement planning in India is that you can create a diversified retirement plan that provides a healthy mix of safety, higher returns, and flexibility. Instead of relying only on PPF or NPS, you can allocate your investment in both plans according to your risk profile. You can also include financial products from our retirement and investment plans to diversify your retirement planning.\u003C/p>\u003Ch2>\u003Cstrong>How to Maximize Benefits?\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Investment Strategy\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>We recommend investing in NPS and PPF early in your career to benefit from compounding growth. You can also set a monthly or quarterly contribution schedule instead of lump-sum yearly payments to avoid market timing risks and smooth out price fluctuations in NPS’s equity component. To enjoy optimal returns, avoid early withdrawals to prevent tax implications.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Planning\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you have invested in NPS, we recommend withdrawing up to 60% on maturity and using the remaining balance to buy the best annuity plan, like our \u003Ca href=\"https://www.shriramlife.com/life-insurance/immediate-annuity-plus\" target=\"_blank\">Immediate Annuity Plus plan\u003C/a>. Such withdrawals will be tax-free, and the annuity purchase will create more avenues for steady income throughout your retirement. \u003Cbr />PPF account holders must avoid withdrawing any amount in the first five years; otherwise, it will be taxed as normal income. Keep your PPF untouched for 15 years and enjoy full withdrawal at zero tax, including tax-free interest income.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Regular Reviews\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Investments in \u003Ca href=\"https://www.shriramlife.com/life-insurance/retirement-plan\" target=\"_blank\">retirement plans\u003C/a> require constant monitoring and adjustment, especially if you’re investing in NPS. If your income and risk appetite increases, consider reassessing your asset allocation for potentially higher returns. You can also invest in other retirement insurance plans that further support your retirement goals.\u003C/p>\u003Ch2>\u003Cstrong>Secure Your Retirement with Shriram Life Insurance\u003C/strong>\u003C/h2>\u003Cp>Planning early for retirement isn’t just a wise decision but an essential one. Knowing the fundamentals isn’t enough if you want to invest in retirement plans in India like NPS and PPF. You must know the precise benefits of each plan, including their tax implications and key differentiator points, to make informed investment decisions. It will ensure you receive a predictable and steady income throughout your retirement. \u003C/p>\u003Cp>While investing in both schemes is a better choice from a diversification perspective, it is also ideal for supporting a worry-free and comfortable retirement. You can plan your retirement with Shriram Life Insurance because we offer a wide range of retirement, \u003Ca href=\"https://www.shriramlife.com/life-insurance/protection-plan\" target=\"_blank\">protection\u003C/a>, \u003Ca href=\"https://www.shriramlife.com/life-insurance/investment-plan\" target=\"_blank\">investment\u003C/a>, and \u003Ca href=\"https://www.shriramlife.com/life-insurance/assured-savings-plan\" target=\"_blank\">savings plans\u003C/a> that can help you achieve financial freedom in your post-retirement phase.\u003C/p>","category":"/blog/advice"},{"title":"Difference Between Linked and Non-Linked Insurance Plans","heading":"Difference Between Linked and Non-Linked Insurance Plans","short_description":"\u003Cp>When one has to choose a life insurance plan, the variety and options available across different types of life insurance plans, can pose a challeng\u003C/p>","tile_image":[{"media_img":{"url":"https://cdn.shriramlife.com/slic-kalam/files/2024-12/12.%20Participating%20vs.%20Non-Participating_%20Understanding%20Life%20Insurance%20Policy%20Types_0.jpg?VersionId=DmmnfsZPucA048vK90CH_5mhMHCj04vz","alt":"Linked vs Non- linked insurance plans"},"media_svg":null,"media_svg_alt":"","media_document":null}],"posted_on":"2024-12-12T09:59:52","updated_on":"2024-12-12T09:59:56","read_more_title":"Know More","slug":"/difference-between-linked-and-non-linked-insurance-plans","field_bl_tag":"\u003Ca href=\"/blog/guides/advice\" hreflang=\"en\">Advice\u003C/a>, \u003Ca href=\"/blog/guides/recent\" hreflang=\"en\">Recent\u003C/a>, \u003Ca href=\"/blog/guides/life-insurance\" hreflang=\"en\">Life Insurance\u003C/a>","description":"\u003Cp>When one has to choose a life insurance plan, the variety and options available across different types of life insurance plans, can pose a challenge. The information one needs to process to make this decision can seem difficult, affecting one’s ability to choose the right policy. If you’re buying your first life insurance policy, you will come across Linked and non-linked insurance plans. These are the most common types of insurance policies. We aim to explain what these plans are and how they differ from one another, so that you can select the right life insurance plan.\u003C/p>\u003Ch2>\u003Cstrong>What is a Non-Linked Insurance Policy?\u003C/strong>\u003C/h2>\u003Cp>It is a traditional life insurance Plan designed to provide a stable and assured financial safety net through life coverage and guaranteed benefits. Unlike linked insurance plans, the returns of Non-Linked Insurance Plans aren’t tied to market performance. If your risk tolerance is low and you want fixed returns on maturity, then Non-Linked Insurance Plans are better suited to your profile.\u003C/p>\u003Cp>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">While most non-linked insurance plans (traditional plans) such as \u003C/span>\u003Ca href=\"https://www.shriramlife.com/life-insurance/assured-income-plan\" target=\"_blank\">\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Shriram Life Assured Income Plan\u003C/span>\u003C/a>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">, \u003C/span>\u003Ca href=\"https://www.shriramlife.com/life-insurance/early-cash-plan\" target=\"_blank\">\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Shriram Life Early Cash Plan\u003C/span>\u003C/a>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\"> etc., provide fixed returns, those clubbed with Endowment Plans guarantee additional value. Term Plan such as \u003C/span>\u003Ca href=\"https://www.shriramlife.com/life-insurance/smart-protection-plan\" target=\"_blank\">\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Shriram Life Smart Protection Plan\u003C/span>\u003C/a>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\"> is also a popular Non-Linked Plan, but it only provides life cover to the family in the unfortunate event of the policyholder’s death during the policy term.\u003C/span>\u003C/p>\u003Ch2>\u003Cstrong>Advantages of Non-Linked Insurance Policy\u003C/strong>\u003C/h2>\u003Cp>The following \u003Ca href=\"https://www.shriramlife.com/blog/golden-premier-saver-plan/comprehensive-benefits-of-non-linked-participating-insurance-plans\" target=\"_blank\">benefits of non-linked insurance plans\u003C/a> make them the ideal choice for conservative investors:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Guaranteed Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>One of the biggest differences between linked and non-linked plans is assured returns. Unlike linked insurance plans, Non-Linked Plans provide a guaranteed return on maturity, regardless of the market condition.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Policyholders can claim tax deductions equivalent to the premium paid in a particular financial year u/s 80 C. However, the maximum deductions are capped at ₹1.50 lakh/annum. The maturity proceeds from such plans are tax-free u/s 10 (10D) if the premium payment for any year doesn’t exceed 10% of the sum assured value.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Low Risk\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you evaluate linked vs. non-linked insurance plans regarding risk factors, non-linked plans emerge as the winner for individuals with a lower risk tolerance. Since market volatility doesn’t affect Non-Linked Policy returns, they appear as a safe plan for people who value stability.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Long-term Wealth Creation\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Most non-linked insurance plans have a long tenure, so they encourage disciplined saving over time. They help people build a substantial fund for future needs, securing their life financially. You can amplify your long-term wealth creation goals by pairing Non-Linked Plans with other Retirement Plans and Savings Plans that complement your financial goals.\u003C/p>\u003Ch2>\u003Cstrong>What is a Linked Insurance Policy?\u003C/strong>\u003C/h2>\u003Cp>A linked insurance policy blends investment and insurance aspects in a single financial product. Unit Linked Insurance Plans (ULIP) are the most common type of linked insurance plans. When you invest in such plans, a part of the premium goes toward life coverage while the balance is invested in market-linked funds.\u003C/p>\u003Cp>Since the premium is invested in market securities, policyholders may earn higher returns. These plans are recommended for risk-tolerant individuals who can handle market volatility. You can check our \u003Ca href=\"https://www.shriramlife.com/life-insurance/wealth-pro\" target=\"_blank\">Shriram Life Wealth Pro plan\u003C/a>, as this Unit-Linked Policy provides the best of investment and protection in a single plan.\u003C/p>\u003Ch2>\u003Cstrong>Advantages of a Linked Insurance Policy\u003C/strong>\u003C/h2>\u003Cp>The following advantages of linked insurance plans make them an ideal choice for risk-tolerant individuals.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Growth Potential\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>It is among the best life insurance Investment options that allows your money to grow based on the performance of your chosen funds. Instead of receiving a fixed amount, you have a higher potential to earn great returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Fund Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>What makes linked plans more advantageous in the linked vs. non-linked life insurance comparison is its flexibility. Policyholders can choose between debt, equity, or balanced funds to align the investment with their risk appetite and financial goals. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Transparency\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Unlike non-linked plans, ULIP policyholders receive detailed reports on fund performance and related charges. It helps them understand and track their investment and potential returns for clarity and convenience.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Payments made toward insurance premiums are eligible for tax deductions u/s 80 C, up to a maximum of ₹1.50 lakh/annum. Maturity proceeds received on ULIP plans will be tax-free u/s 10 (10D) if the aggregate annual premium payment doesn’t exceed ₹2.50 lakh. However, maturity proceeds received by the nominee in the event of a policyholder’s death will be entirely tax-free.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Switching Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Some ULIPs provide free fund switches within a specific limit, so you can adjust your portfolio in response to changing market conditions or personal shifts in financial goals. \u003C/p>\u003Ch2>\u003Cstrong>How do Linked Insurance Plans Differ from Non-Linked Insurance Plans?\u003C/strong>\u003C/h2>\u003Cp>You can effortlessly choose the right insurance plan if you clearly understand the difference between linked and non-linked plans. The following table will give you a better picture of the linked vs. non-linked life insurance plans:\u003C/p>\u003Ctable>\u003Ctbody>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Basis of Differentiation\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Linked Insurance Plans\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Non-Linked Insurance Plans\u003C/strong>\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Market Association\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Linked plans are affected by market volatility because a portion of the premium is invested in market securities\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Non-linked plans aren’t affected by market volatility\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Returns\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Policyholders don’t receive a fixed amount on maturity because the returns are determined by market performance\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Policyholders receive a fixed amount on maturity because these plans aren’t affected by market performance\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Investment Flexibility\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Policyholders can invest in debt, equity, or balanced funds depending on their financial goals, risk appetite, etc.\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Policyholders don’t have any control because the insurer decides where to invest\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Risk\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">The risk profile is medium to high, depending on your choice of funds and policy\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">The risk profile is relatively low\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Switching Funds\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Policyholders can switch funds if their existing funds aren’t performing well\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">This facility isn’t available to policyholders\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Partial Withdrawal\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">10% of the premiums can be partially withdrawn to support emergency financial needs. The withdrawal limit and terms can vary from one insurer and plan to another.\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Partial withdrawal isn’t typically allowed, but some insurers may allow you to withdraw a certain amount. \u003C/span>\u003C/td>\u003C/tr>\u003C/tbody>\u003C/table>\u003Ch2>\u003Cstrong>Which Insurance Policy is best for Your Investment Planning?\u003C/strong>\u003C/h2>\u003Cp>You must always choose your life insurance investment options based on your financial objectives, risk tolerance, and budget because not all plans are designed the same. Non-linked insurance plans will be a better choice if you want a stable return without market risk. Conversely, linked insurance plans are recommended if you are comfortable with market-linked fluctuations and want to take advantage of the high growth potential.\u003C/p>\u003Cp>Since both types of life insurance Plans have pros and cons, understand the policy clearly before investing. Learn how linked and non-linked plans work before making a decision. Consult a financial planner for personalized guidance if you’re still confused or overwhelmed by the options.\u003C/p>\u003Ch2>\u003Cstrong>Get the Best Life Insurance Coverage with Shriram Life Insurance\u003C/strong>\u003C/h2>\u003Cp>Life is unpredictable, and one of the most responsible aspects of financial planning is enabling that the policyholder’s family is taken care of financially, in the event of the insured’s unfortunate demise. This is where life insurance plans play a role in providing security and peace of mind. We recommend that an individual could explore the different types of life insurance Plans and invest in the right plans to secure their future. You can also explore our \u003Ca href=\"https://www.shriramlife.com/life-insurance/protection-plan\" target=\"_blank\">Protection Plans\u003C/a> to find the ideal financial product to suit your requirements.\u003C/p>\u003Cp>Shriram Life Insurance provides various insurance plans designed to achieve varying financial goals, each with varying features and benefits. You must check our \u003Ca href=\"https://www.shriramlife.com/life-insurance/family-protection-plan\" target=\"_blank\">Shriram Life Family Protection Plan\u003C/a> if you want to secure your family’s financial future in case of your untimely demise. Our Shriram Life Early Cash Plan is a better option if you want to grow your wealth over a period while enjoying insurance coverage.\u003C/p>","category":"/blog/advice"},{"title":"Guide to Avail Loan Against Your Life Insurance Policy","heading":"Loan Against Your Life Insurance Policy – Things to Know","short_description":"\u003Cp>It is common for individuals to save money to meet short-term and long-term expenses.\u003C/p>","tile_image":[{"media_img":{"url":"https://cdn.shriramlife.com/slic-kalam/files/2024-12/Loan%20Against%20insurance%20policy_1.jpg?VersionId=LcGCJcDQPEkAaU_fRvd92zrnJCgmBxYV","alt":"Loan Against Your Life Insurance Policy"},"media_svg":null,"media_svg_alt":"","media_document":null}],"posted_on":"2024-12-11T12:13:45","updated_on":"2024-12-11T12:13:49","read_more_title":"Know More","slug":"/guide-to-avail-loan-against-your-life-insurance-policy","field_bl_tag":"\u003Ca href=\"/blog/guides/recent\" hreflang=\"en\">Recent\u003C/a>, \u003Ca href=\"/blog/guides/life-insurance\" hreflang=\"en\">Life Insurance\u003C/a>, \u003Ca href=\"/blog/guides/advice\" hreflang=\"en\">Advice\u003C/a>","description":"\u003Cp>It is common for individuals to save money to meet short-term and long-term expenses. However, it is often the big expenses that come unexpected or suddenly such as medical bills, marriage expenses, higher education fees, property purchase/renovation, etc., that disrupt one’s financial condition. In such cases, people often fall short of the required funds and turn to financial institutions or others for loans. While people with a good credit score and assets can easily get loan approvals, others may not. In any case, becoming debt-ridden during such times is not financially prudent and one can save and plan ahead to avoid such a situation.\u003C/p>\u003Cp>If you don’t have assets like gold, properties, etc., to use as collateral but need funds to meet sudden expenses, you can use your life Insurance Policies to get secured loans. In this blog, we explain more about getting a loan against life Insurance policy so you can fulfil all your needs without stress and pressure.\u003C/p>\u003Ch2>\u003Cstrong>What is Loan against Policy?\u003C/strong>\u003C/h2>\u003Cp>As the term suggests, it refers to obtaining a loan against an existing life insurance policy. You use your insurance policy as collateral when you take such loans. Unlike personal loans, life insurance Loans are secured and give security to the lender. Hence, the loan on life insurance Policy typically has a lower interest rate than most personal loans.\u003C/p>\u003Cp>The loan amount depends significantly on the policy’s surrender value, premiums paid to date, policy type, and the eligibility of the policy. It is the best option to secure funds if you don’t have any \u003Ca href=\"https://www.shriramlife.com/life-insurance/savings-plan\" target=\"_blank\">Savings Plans\u003C/a> to meet unexpected expenses. So, if you’re wondering, ‘Can I take a loan on my life insurance,’ we recommend checking your policy’s eligibility and the shortlisted lender’s terms and conditions for life insurance Loans.\u003C/p>\u003Ch2>\u003Cstrong>How to Get a Loan from a Life Insurance Policy?\u003C/strong>\u003C/h2>\u003Cp>Not all life insurance Policies are eligible for securing a loan, so start by determining your policy’s eligibility status. You can assess the policy type and check whether your insurance provider or other financial institutions offer loans against the particular policies. For eligible policies, you can contact our team on our toll-free number (1800-103-6116) to get step-wise guidance on how to avail a loan against your existing policy. You can also visit one of our branches for assistance. Use our ‘\u003Ca href=\"https://www.shriramlife.com/contact-us/branches\" target=\"_blank\">branch locator\u003C/a>’ to find a branch near you. \u003C/p>\u003Cp>The precise application steps may vary from one lender to another, so we recommend checking the particular lender/insurer’s website for accurate step-wise application details. You can also contact the lender’s online customer support executives for more details on how to take a loan from life insurance.\u003C/p>\u003Ch2>\u003Cstrong>Which Insurance Policies Are Eligible for a Loan?\u003C/strong>\u003C/h2>\u003Cp>Endowment Policies, Money-Back Policies, and Whole Life Policies are generally eligible for securing a personal loan against life insurance. If you’re covered under a group health insurance policy, Unit-Linked Insurance Plans (ULIPs), and term insurance plans, then you may not get loans against them. Some insurers may provide insurance against ULIPs, but not all will. Read your policy’s terms and conditions thoroughly and talk to potential lenders/insurers executives to determine whether you can get a loan on life insurance policy. You can assess your \u003Ca href=\"https://www.shriramlife.com/life-insurance/retirement-plan\" target=\"_blank\">Retirement Plans\u003C/a> to find existing policies eligible for loans. \u003C/p>\u003Ch2>\u003Cstrong>Some Important Points for Loan against Insurance\u003C/strong>\u003C/h2>\u003Cp>If you often ask yourself, ‘Can I take a loan on my life insurance?’ The answer is yes. It is a straightforward process, but you must consider the following points before taking out a Loan against life insurance Policy.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Rate of Interest\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The rate of interest varies from one lender to another, but it is comparatively lower than personal loan interest rates. Unless specified in the loan documents, the interest rate remains fixed throughout the loan tenure. We recommend reading the loan’s full terms and conditions for clarity.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Repayment\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Loan on life insurance Policy offers flexible payment terms, but it also attracts severe repercussions on failed payments. The repayment tenure for such loans is generally six months, but it can sometimes be extended until the policy tenure. Individuals can repay the loan in fixed EMIs or as a lump sum at the end of the loan term. Some even pay the interest and get the principal deducted from the policy’s maturity value. You can talk to the lender and choose a loan repayment method that works best for you.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Loan Amount\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Most lenders offer loans up to 80%-90% of the policy’s surrender value, so calculate the loan amount accordingly before applying for any life insurance loans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Impact on Policy Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The outstanding loan amount and the accumulated interest will be deducted from the maturity proceeds, lowering your policy returns and safety net. You can prevent it by making timely repayments. \u003C/p>\u003Ch2>\u003Cstrong>What are the Documents Required to Avail Loan against Insurance?\u003C/strong>\u003C/h2>\u003Cp>If your policy qualifies for securing Life Insurance loans, then you will need the following documents for a smooth loan application process:\u003C/p>\u003Cul>\u003Cli>Life insurance policy document\u003C/li>\u003Cli>Duly filled loan application form\u003C/li>\u003Cli>Identity proof (Driver’s license/passport/PAN card/Aadhar card, etc.)\u003C/li>\u003Cli>Address proof (utility bill/rental agreement, etc.) \u003C/li>\u003Cli>Passport-size photographs\u003C/li>\u003Cli>Assignment of the policy document\u003C/li>\u003Cli>Proof of premium payment\u003C/li>\u003Cli>Bank statement\u003C/li>\u003Cli>Income proof\u003C/li>\u003Cli>Loan agreement\u003C/li>\u003C/ul>\u003Cp>Some lenders may require additional documents. \u003C/p>\u003Ch2>\u003Cstrong>The Benefits and Concerns of an Insurance Policy Loan\u003C/strong>\u003C/h2>\u003Cp>Many individuals have a basic understanding of what is policy loan in life insurance, yet they don’t have a clear picture. The following benefits and concerns will strengthen the awareness of loans against insurance policies so anyone can proceed with confidence.\u003C/p>\u003Ch3>\u003Cstrong>Benefits of an Insurance Policy Loan\u003C/strong>\u003C/h3>\u003Cul>\u003Cli>\u003Ch4>Lower Interest Rate\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>The interest rates on loans against insurance policies vary from one lender to another, but they are comparatively lower than those on most traditional, unsecured bank loans. \u003C/p>\u003Cul>\u003Cli>\u003Ch4>Less Scrutiny\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Since you’re applying for a loan by placing your insurance as collateral, there is less scrutiny involved in the application and approval process.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Faster Disbursement\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Unlike personal loans, the loan disbursal is faster for life insurance Loans. You may receive the loan amount within a few days of approval.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Higher Approval Chances\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Applying for a loan to your existing insurer has minimal chances of rejection, especially if you’ve never defaulted on your premium payments for three consecutive years.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Flexible Repayment Structures\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Getting a loan on life insurance Policy is desirable because it doesn’t have rigid repayment structures. You can choose to pay only the interest during the loan tenure and have the principal deducted from the maturity value. \u003C/p>\u003Ch2>\u003Cstrong>Concerns of an Insurance Policy Loan\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch4>Impact on Policy Benefits\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>If you take a personal loan against life insurance, you may receive a lower maturity value, especially if you default on repayment. This can affect your financial planning and status.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Interest Accumulation\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Failure to repay timely interest can result in hefty interest accumulation. If the interest combined with the principal exceeds the policy’s cash value, the insurer may terminate your policy, stripping you of your coverage benefits.\u003C/p>\u003Ch2>\u003Cstrong>Personal Loan and Life Insurance Policy\u003C/strong>\u003C/h2>\u003Cp>If you’re struggling to choose between a personal loan and a loan against life insurance policy, we recommend understanding the difference between both to make an informed choice.\u003C/p>\u003Ctable>\u003Ctbody>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Basis of Differentiation\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Personal Loan\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">\u003Cstrong>Loan Against Life Insurance Policy\u003C/strong>\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Interest Rate\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Higher\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Lower\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Credit Check\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Mandatory\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Not required\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Processing Time\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Longer\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Faster\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Collateral\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Needed\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Not needed\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Documentation\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Extensive\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Minimal\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Repayment Terms\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Rigid\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Flexible\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Chances of Rejection\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Higher\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\"EN-IN\" lang=\"EN-IN\">Lower\u003C/span>\u003C/td>\u003C/tr>\u003C/tbody>\u003C/table>\u003Cp>In a nutshell, obtaining a loan on life insurance policy is a more practical, hassle-free, and faster route to getting funds. Individuals with no assets for collateral can easily secure loans against eligible insurance policies.\u003C/p>\u003Ch2>\u003Cstrong>What Happens if You Fail to Repay?\u003C/strong>\u003C/h2>\u003Cp>Failed repayments will lead to increasing accrued interest over time, significantly reducing the maturity proceeds. If a person dies before repaying the loan and interest amount, the insurer reserves the right to deduct it from the policy’s maturity value before disbursing the balance. The insurer can also terminate the policy if the borrowed loan with interest exceeds the policy’s cash value to recover the dues.\u003C/p>\u003Ch3>\u003Cstrong>Get Easier Access to Insurance Loans from Shriram Life Insurance\u003C/strong>\u003C/h3>\u003Cp>Regardless of their financial planning, anyone may need urgent funds to meet unexpectedly large expenses. In such cases, obtaining a low-interest loan can be the best option. We recommend taking a loan against life insurance policy because it is fast, secure, and comes with flexible repayment terms. Many of the Shriram Life Insurance policies are eligible for securing a loan, like \u003Ca href=\"https://www.shriramlife.com/life-insurance/new-shri-vidya-plan\" target=\"_blank\">Shriram Life New Shri Vidya\u003C/a>, \u003Ca href=\"https://www.shriramlife.com/life-insurance/assured-savings-plan\" target=\"_blank\">Shriram Life Assured Savings Plan\u003C/a>, etc. So, you can consider buying a policy from Shriram Life Insurance for enjoying multiple benefits, like systematic saving, wealth creation, financial security, collateral-free loan, and more. Since every plan has different features, coverage, and benefits, explore relevant plans and invest in the ones that align with your financial goals.\u003C/p>","category":"/blog/advice"},{"title":"Best Child Plan for Education and Marriage","heading":"Best Child Plan for Education and Marriage","short_description":"\u003Cp>Every parent aims to secure their child’s future.\u003C/p>","tile_image":[{"media_img":{"url":"https://cdn.shriramlife.com/slic-kalam/files/2024-12/63.%20Best%20Child%20Plan%20for%20Education%20and%20Marriage_0.png?VersionId=LhtipHzByCAZXFc5fQxrCHv79CfTUuEw","alt":"Best child education for Marriage"},"media_svg":null,"media_svg_alt":"","media_document":null}],"posted_on":"2024-12-10T05:38:00","updated_on":"2024-12-10T05:38:07","read_more_title":"Know More","slug":"/best-child-plan-for-education-and-marriage","field_bl_tag":"\u003Ca href=\"/blog/guides/recent\" hreflang=\"en\">Recent\u003C/a>, \u003Ca href=\"/blog/guides/child-plan\" hreflang=\"en\">Child\u003C/a>, \u003Ca href=\"/blog/guides/life-insurance\" hreflang=\"en\">Life Insurance\u003C/a>, \u003Ca href=\"/blog/guides/advice\" hreflang=\"en\">Advice\u003C/a>","description":"\u003Cp>Every parent aims to secure their child’s future. Whether arranging funds for higher education or creating a sizable fund for hosting a grand wedding festivity for your child, the goal can differ for different parents. However, the process to achieve these financial goals remains relatively similar for most – investing in a Child Investment Plan. These financial products feature the dual benefits of investment and saving, providing two-pronged financial security. In this article, we explain how investment in Child Plans helps parents accumulate wealth for their children’s education and marriage needs through systematic savings. \u003C/p>\u003Ch2>\u003Cstrong>How Can Child Plans Help With Education?\u003C/strong>\u003C/h2>\u003Cp>Parents should consider investing in a Child Plan because it will support their child’s future educational needs in the following ways:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Wealth Creation for Future Education\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>When you begin investing in the best child plan for education such as \u003Ca href=\"https://www.shriramlife.com/life-insurance/assured-income-plan\" target=\"_blank\">Shriram Life Assured Income Plan\u003C/a>, you follow a disciplined, long-term saving approach to build a large fund for your child’s higher educational requirements. It ensures you regular set aside a fixed amount that can later be used for your child’s higher educational expenses.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Death Benefit\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Since the ideal plans have an insurance component, they ensure your child’s education doesn’t stop in the unfortunate event of the policyholder’s (parent) death. If you want to secure your child’s future, invest in plans with a built-in premium waiver feature.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Payout Structures\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>When you’re planning your child’s future, estimate timelines and approximate amounts you will need to support your child’s higher education. It will help you identify a plan whose payout aligns with your estimated education timeline. For example, you can purchase the \u003Ca href=\"https://www.shriramlife.com/life-insurance/new-shri-vidya-plan\" target=\"_blank\">Shriram Life New Shri Vidya plan\u003C/a>, which provides money-back benefits in the last four years of the policy. This flexible payout can be used to pay school fees, tuition fees, or other education expenses during that period.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Securing Collateral-free Loan\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If your child’s education plan changes over time and you need immediate funds to support those changes, you can use the existing best Child Plan For Education as collateral to secure a loan. You can typically get loans up to 80% of the policy’s surrender value, but this limit can differ from one insurer to another.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Enhanced Maturity Amount\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Some plans provide reversionary bonuses that get added to the maturity amount, increasing the educational fund. In case of a policyholder’s (parent) death, some nominees may also receive a terminal bonus, which enhances the maturity proceeds. We recommend exploring practical tips to select the best Child Education Plan for optimal returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Benefits of Investing in Child Plans\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Parents who want to secure their child’s future by systematically investing to aid their education & marriage funding must choose the right child plan. It has the following benefits:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Financial Safety Net\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Child plans are becoming popular because they provide two-pronged financial security. They help parents stick to systematic, routine savings to build a large enough fund to support their child’s major life goals, including education and marriage, without disrupting their retirement savings.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Insurance and Investment Combination\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Market provides numerous child plans with unique investment and insurance benefits for optimal returns. The right plan will help you accumulate and grow your investment while providing insurance and savings benefits to your child.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Parents should consider investing in a Child Plan because it provides short-term and long-term tax benefits while securing their child’s future. For instance, the premiums paid toward child plans can be deducted u/s 80 C in ITR, up to a maximum of ₹1.50 lakh.\u003C/p>\u003Cp>Maturity proceeds are typically tax-free u/s 10 (10D) if the premium payment does not exceed 10% of the policy’s sum assured value or ₹2.50 lakh in any year during the policy tenure. Starting April 2023, this limit has been set to ₹5 lakh for non-linked plans. Death benefits are fully tax-exempt.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Money Growth\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Policyholders investing early can enjoy the power of compounding, resulting in higher returns on maturity. If investing in ULIPs, you can pick the right financial securities for potentially higher returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Additional Coverage through Riders\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The top plans designed to support education & marriage funding provide numerous riders to strengthen the policy coverage and benefits. For example, besides standard coverage, you can also invest in Critical Illness Coverage, Accidental Death Benefit Cover, etc. Not all insurers provide the same riders for similar types of Child Plans, so always check the plan page on the website for accurate information.\u003C/p>\u003Ch2>\u003Cstrong>How Can Child Plans Help With a Child’s Marriage Goals?\u003C/strong>\u003C/h2>\u003Cp>Investing in the best Child Plan for marriage such as \u003Ca href=\"https://www.shriramlife.com/life-insurance/early-cash-plan\" target=\"_blank\">Shriram Life Early Cash Plan\u003C/a> can help you fulfil your financial obligations during your child’s marriage in the following ways:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Long-Term Wealth Creation\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Child Plans typically have a long policy tenure of 15-20 years, which is ideal for building a substantial fund for the child’s marriage. The power of compounding over this extended period amplifies the wealth creation process, so you don’t fall short of the expected marriage expenses. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Protection Against Market Volatility\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Many Child Plans are market-linked, so that policyholders can invest a portion of their premiums in select financial securities, such as debt instruments, equity, or a mix of both, for potentially higher returns. Equity-linked returns are risky but they can grow at a rate much higher than the inflation rate, resulting in larger returns to support marriage expenses. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Maturity Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The best Child Plan for marriage always provides flexible maturity options, so the policy matures during the expected marriage timeframe. For convenience, policyholders can extend the policy tenure by a few years if their child doesn’t plan to marry during that period. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Liquidity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Not all Child Investment Plans follow rigid payout, like lumpsum payment on policy maturity. Some plans also feature systematic withdrawal options so you can manage unexpected medical expenses or major property renovation without undue financial strain. \u003C/p>\u003Ch2>\u003Cstrong>How to Choose the Best Child Plan?\u003C/strong>\u003C/h2>\u003Cp>Your child’s future planning will remain incomplete if you don’t pick the right plan aligned with your specific financial goals. If you’re overwhelmed with the range of plans available, use the following tips to choose the right child plan to support education & marriage funding.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Start with a Clear Goal Assessment\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Every parent must calculate the estimated cost of education and marriage expenses, considering the growing inflation. Once done, look for plans with a sum assured and investment component that aligns with these calculated expenses.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Understand Policy Features\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Not every plan is designed the same, so parents must check and understand the plan-specific features to make an informed decision. The policy’s tenure, maturity benefits, lock-in period, inclusions & exclusions, and riders must also be evaluated. Always shortlist at least two to three similar plans and compare them critically to make the right choice. The same rule must be followed by choosing Protection Plans and other Savings Plans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Check Premium Waiver and Other Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The best Child Plan for education and marriage will provide a premium waiver as an in-built or additional feature so the child (nominee) can receive full policy benefits in the event of the policyholder’s (parent) death. Look for similar benefits to secure your child’s future fully, even when things don’t go as planned.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Compare Fund Growth and Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you have a moderate to high-risk appetite and want to benefit from the market’s potential for greater returns, ULIPs will be a better choice. You can compare the shortlisted plans by analyzing their growth potential. Risk-averse parents must stick to traditional, non-linked plans for assured and risk-free returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Consider Tax Implications\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Verify the plan’s tax implications to strategize investment and withdrawals for optimal tax savings. Check the latest guidelines u/s 80 C and 10 (10D) for proper planning. We recommend consulting with a professional finance planner for personalized guidance. \u003C/p>\u003Ch2>\u003Cstrong>Build a Substantial Education and Marriage Fund with Shriram Life Insurance \u003C/strong>\u003C/h2>\u003Cp>Whether you have a high-income job or multiple earning family members, it shouldn’t be used as an excuse not to invest in a child plan. Life is uncertain and the market conditions are unpredictable. Hence, investing in the best Child Plan for marriage and education will ensure your child’s future is secure, even when unfortunate or unexpected events occur. It will not only secure the child’s future, but also give you peace of mind and a sense of control, resulting in improved life quality. \u003C/p>\u003Cp>You can \u003Ca href=\"https://www.shriramlife.com/life-insurance/child-plan\" target=\"_blank\">explore the various child plans at Shriram Life Insurance\u003C/a>, like Shriram Life Assured Income Plan and Shriram Life Early Cash Plan because they provide several benefits: assured income, additional protection through riders, potentially higher returns, flexible payment terms, and more. If you’re exclusively looking for plans to support your child’s education, then our Shriram Life New Shri Vidya Plan will be a better choice.\u003C/p>","category":"/blog/advice"}],"blog_count":[{"count":122,"counts":122}],"nothing":"all","nothing_1":317}],"headers":{"x-powered-by":["Express"],"x-frame-options":["SAMEORIGIN"],"content-type":["text/html; charset=utf-8"],"content-length":["124787"],"etag":["W/\"1e773-g3JClLrRBXjtOFURbsIRl6HS8F0\""],"vary":["Accept-Encoding"],"date":["Sat, 21 Dec 2024 15:24:51 GMT"],"connection":["keep-alive"],"keep-alive":["timeout=5"]},"status":200,"statusText":"OK","url":"http://127.0.0.1:4000/api/v1/tagged-blogs/317/all","responseType":"json"},"2489646597":{"body":[{"title":"Api - Header","top_nav":[{"title":"Header - Top nav Test","menu_group":[{"title":"Initiate Claim","heading":"Initiate Claim","menu_link":{"url":"https://myaccount.shriramlife.com/CustomerPortal/ClaimIntimation","text":"Initiate 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Insurance\"}],\"url\":[\"/blog/guides/life-insurance\"]}],\"category\":[{\"id\":1781,\"name\":\"Super Income Plan\",\"blog_category\":\"/blog/super-income-plan\"},{\"id\":1782,\"name\":\"Advice\",\"blog_category\":\"/blog/advice\"},{\"id\":1930,\"name\":\"Child Plan\",\"blog_category\":\"/blog/child-plan\"},{\"id\":1979,\"name\":\"Early Cash Plan\",\"blog_category\":\"/blog/early-cash-plan\"},{\"id\":1982,\"name\":\"Assured Income Plan\",\"blog_category\":\"/blog/assured-income-plan\"},{\"id\":1984,\"name\":\"Golden Premier Saver Plan\",\"blog_category\":\"/blog/golden-premier-saver-plan\"},{\"id\":1985,\"name\":\"Premier Assured Benefit\",\"blog_category\":\"/blog/premier-assured-benefit\"}]}]","api/v1/tagged-blogs/317/all":"[{\"category\":[{\"id\":1781,\"name\":\"Super Income Plan\"},{\"id\":1782,\"name\":\"Advice\"},{\"id\":1930,\"name\":\"Child Plan\"},{\"id\":1979,\"name\":\"Early Cash Plan\"},{\"id\":1982,\"name\":\"Assured Income Plan\"},{\"id\":1984,\"name\":\"Golden Premier Saver Plan\"},{\"id\":1985,\"name\":\"Premier Assured Benefit\"}],\"blogs\":[{\"title\":\"One plan Many benefits: How Super Income plan is the right at any age\",\"heading\":\"One plan Many benefits: How Super Income plan is the right at any age\",\"short_description\":\"\u003Cp>In an era marked by economic volatility and changing demographics, the need for stable financial planning has never been more critical.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/12-6%20Things%20to%20Know%20Before%20Getting%20Shriram%20Life%20Super%20Income%20Plan_0.jpg?VersionId=3Nvr475rPtJv4eEGMULNzS9Nz2iFGKKW\",\"alt\":\"One life insurance plan for many benefits\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-20T11:00:29\",\"updated_on\":\"2024-12-20T11:00:37\",\"read_more_title\":\"Know More\",\"slug\":\"/one-plan-many-benefits-how-super-income-plan-is-the-right-at-any-age\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>In an era marked by economic volatility and changing demographics, the need for stable financial planning has never been more critical. The Super Income Plan emerges as a beacon of financial security, offering a unique blend of income generation and insurance protection. Whether you're a young professional embarking on your career, a mid-career individual navigating family responsibilities, or a retiree seeking to preserve and grow your wealth, this plan caters to diverse financial aspirations with its comprehensive suite of benefits.\u003C/p>\u003Cp>At its core, the Super Income Plan represents a strategic investment in your future, ensuring a steady income stream while safeguarding against unforeseen circumstances. By exploring its multifaceted advantages—from guaranteed income streams and tax benefits to flexible payout options and inflation protection—you'll discover why this plan is not merely a choice, but a cornerstone in securing financial stability across different life stages. Join us as we delve deeper into the myriad benefits of Super Income Plan and uncover how it can empower you to achieve financial freedom and peace of mind, today and for years to come.\u003C/p>\u003Ch2>\u003Cstrong>Understanding the Super Income Plan\u003C/strong>\u003C/h2>\u003Cp>The Super Income Plan is designed to provide a dual benefit of insurance coverage and regular income. It combines elements of investment and protection, making it a comprehensive financial tool for individuals looking to secure their future. This plan typically involves paying premiums for a specified period, after which it offers regular payouts throughout the policyholder's lifetime or for a predetermined duration.\u003C/p>\u003Ch2>\u003Cstrong>Benefits of the Shriram Life Super Income Plan\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>1. Guaranteed Income Stream:\u003C/strong>\u003C/h3>\u003Cp>One of the standout features of plans such as the Shriram Life Super Income Plan is its ability to provide a guaranteed income stream. This steady flow of income ensures financial stability, making it ideal for retirees or those nearing retirement who need predictable cash flows to cover living expenses.\u003C/p>\u003Ch3>\u003Cstrong>2. Financial Security and Protection:\u003C/strong>\u003C/h3>\u003Cp>Beyond income generation, the plan offers financial security through insurance coverage. It provides a lump sum benefit to the nominee in case of the policyholder's unfortunate demise, thereby ensuring that loved ones are protected financially.\u003C/p>\u003Ch3>\u003Cstrong>3. Flexibility in Payout Options:\u003C/strong>\u003C/h3>\u003Cp>The benefits of Super Income Plans extend to flexibility, allowing policyholders to choose from various payout options. They can opt for regular monthly, quarterly, or annual payments, depending on their financial needs and preferences. This flexibility makes it adaptable to changing life circumstances and financial goals.\u003C/p>\u003Ch3>\u003Cstrong>4. Tax Benefits of Super Income Plan:\u003C/strong>\u003C/h3>\u003Cp>Investing in a Super Income Plan can also offer tax advantages. Premiums paid towards the plan are often eligible for tax deductions under prevailing tax laws, providing additional savings and reducing the overall tax liability.\u003C/p>\u003Ch3>\u003Cstrong>5. Long-term Wealth Accumulation:\u003C/strong>\u003C/h3>\u003Cp>Besides providing immediate income, the plan also serves as a tool for long-term wealth accumulation. The invested premiums grow over time, potentially generating higher returns compared to traditional savings accounts or fixed deposits.\u003C/p>\u003Ch3>\u003Cstrong>6. Inflation Protection:\u003C/strong>\u003C/h3>\u003Cp>Accounting for inflation by offering indexed benefits of super income plan, the policy assures of periodic increases in payouts. This feature ensures that the purchasing power of the income remains intact over the years, safeguarding against the impact of rising living costs.\u003C/p>\u003Ch2>\u003Cstrong>Super Income Plan - Right at Any Age\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>For Young Professionals:\u003C/strong>\u003C/h3>\u003Cp>Young professionals can benefit from starting a Super Income Plan early in their careers. By leveraging the power of compounding, they can build a substantial corpus over time while securing insurance coverage. The plan offers them the flexibility to adjust payouts as their income needs evolve, providing a solid foundation for future financial goals.\u003C/p>\u003Ch3>\u003Cstrong>For Mid-career Individuals:\u003C/strong>\u003C/h3>\u003Cp>Mid-career individuals often face increased responsibilities and financial commitments. A Super Income Plan offers them peace of mind by ensuring a steady income post-retirement. It serves as a prudent addition to their investment portfolio, balancing risk with reliable returns.\u003C/p>\u003Ch3>\u003Cstrong>For Pre-retirees and Retirees:\u003C/strong>\u003C/h3>\u003Cp>Pre-retirees and retirees can derive immense benefit from the guaranteed income feature of the Super Income Plan. It serves as a reliable source of income during retirement years, supplementing pensions or through \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/savings-plan\\\" target=\\\"_blank\\\">savings\u003C/a> and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">retirement plans\u003C/a>. The plan's flexibility in payout options allows them to tailor payments according to their lifestyle and financial obligations.\u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>Plans such as the Shriram Life Super Income Plan exemplifies the synergy between financial security and wealth accumulation. Its dual benefits of guaranteed income and insurance coverage make it a compelling choice for individuals at any stage of life. Whether you're planning for retirement, \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/family-protection-plan\\\" target=\\\"_blank\\\">safeguarding your family's future\u003C/a>, or seeking to build long-term wealth, this versatile plan offers a robust solution. By incorporating a Super Income Plan into your financial strategy, you can navigate uncertainties with confidence and enjoy a secure financial future.\u003C/p>\u003Cp>In essence, the Shriram Life Super Income Plan isn't just a plan- it's a pathway to financial resilience and peace of mind, ensuring that your hard-earned savings work for you efficiently throughout your life journey. Embrace the benefits of Super Income Plan today and pave the way for a prosperous tomorrow, regardless of your age or financial goals.\u003C/p>\",\"category\":\"/blog/super-income-plan\"},{\"title\":\"Tax savings for salaried income: Super Income Plan benefits\",\"heading\":\"Tax savings for salaried income: Super Income Plan benefits\",\"short_description\":\"\u003Cp>Effectively managing personal finances requires a strategic approach to both preparing for future financial needs and minimizing tax liabilities.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/6.%20Tax%20savings%20for%20salaried%20income_%20Super%20Income%20Plan%20benefits_0.jpg?VersionId=G37GPJ6ObJk6pNdF1dmQAs0r1Iyv6hNv\",\"alt\":\"Tax benefits of insurance plan\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-19T10:26:53\",\"updated_on\":\"2024-12-19T10:27:00\",\"read_more_title\":\"Know More\",\"slug\":\"/tax-savings-for-salaried-income-super-income-plan-benefits\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>, \u003Ca href=\\\"/blog/guides/retirement\\\" hreflang=\\\"en\\\">Retirement\u003C/a>, \u003Ca href=\\\"/blog/guides/savings\\\" hreflang=\\\"en\\\">Savings\u003C/a>\",\"description\":\"\u003Cp>Effectively managing personal finances requires a strategic approach to both preparing for future financial needs and minimizing tax liabilities. Salaried individuals often find themselves navigating these dual objectives to ensure long-term financial security. The Shriram Life Super Income Plan presents itself as an ideal solution tailored to address these challenges comprehensively. As a non-linked, non-participating individual savings life insurance plan such as \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">Assured Income Plan\u003C/a>, it not only provides robust insurance coverage but also serves as a vehicle for wealth accumulation. This blog explores the nuances of the Shriram Life Super Income Plan, highlighting its flexible premium payment terms, guaranteed income benefits, and the substantial tax benefits of savings plans available under Section 80C of the Income Tax Act, 1961. By gaining a deeper understanding of these features, salaried individuals can strategically enhance their financial stability while optimizing their tax planning strategies with confidence.\u003C/p>\u003Ch2>\u003Cstrong>Understanding Shriram Life Super Income Plan\u003C/strong>\u003C/h2>\u003Cp>The Shriram Life Super Income Plan is a non-linked, non-participating individual savings life insurance plan. It serves dual purposes of providing life insurance coverage and generating wealth through regular payouts.\u003C/p>\u003Cp>Here’s a breakdown of its key features:\u003C/p>\u003Ch3>\u003Cstrong>1. Multiple Premium Payment Terms\u003C/strong>\u003C/h3>\u003Cp>One of the standout features of the Shriram Life Super Income Plan is its flexibility in premium payment. Policyholders can choose to pay premiums yearly, half-yearly, quarterly, or even monthly, depending on their financial preferences and capabilities.\u003C/p>\u003Cp>This flexibility ensures that the plan can be tailored to fit individual financial planning needs.\u003C/p>\u003Ch3>\u003Cstrong>2. Assured Earnings\u003C/strong>\u003C/h3>\u003Cp>Throughout the term of the plan, policyholders are assured of receiving benefits that act as a source of passive income. This predictable income stream can supplement other sources of income, providing stability and financial security to the insured and their dependents.\u003C/p>\u003Ch3>\u003Cstrong>3. Loans\u003C/strong>\u003C/h3>\u003Cp>An additional benefit of the plan is the option to avail loans against it. The loan amount is determined based on the surrender value of the policy at the time of loan application, offering liquidity and financial flexibility when needed.\u003C/p>\u003Ch2>\u003Cstrong>Benefits Overview\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>1. Death Benefits\u003C/strong>\u003C/h3>\u003Cp>In the unfortunate event of the insured’s demise, the Shriram Life Super Income Plan provides death benefits to the nominees or beneficiaries. The amount paid out is either the Death Sum Assured or the surrender benefit, whichever is higher, ensuring that loved ones are financially protected during challenging times.\u003C/p>\u003Ch3>\u003Cstrong>2. Maturity Benefits\u003C/strong>\u003C/h3>\u003Cp>If the insured survives till the end of the policy term, they receive the Guaranteed Maturity Sum Assured. This lump sum payment marks the conclusion of the policy term, providing a financial cushion for the policyholder’s future needs.\u003C/p>\u003Ch3>\u003Cstrong>3. Earning Benefits\u003C/strong>\u003C/h3>\u003Cp>A unique feature of the Shriram Life Super Income Plan is the Super Income Benefit. Starting from the end of the premium paying term and continuing until the policy term ends (or until demise, whichever comes earlier), policyholders receive monthly payouts. These payouts are calculated as a percentage of the annualized premium paid, offering a steady income stream that can support \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">retirement plan\u003C/a> or other financial goals.\u003C/p>\u003Ch3>\u003Cstrong>4. Flexibility in Premium Payments\u003C/strong>\u003C/h3>\u003Cp>The plan allows policyholders to choose from multiple premium payment terms, including yearly, half-yearly, quarterly, or monthly options. This flexibility accommodates varying financial capacities and ensures that individuals can adjust their contributions according to their income streams and financial goals.\u003C/p>\u003Ch3>\u003Cstrong>5. Loan Facility\u003C/strong>\u003C/h3>\u003Cp>Beyond its insurance and income benefits, the plan also offers the option to avail loans against the policy. This feature provides liquidity during emergencies or for planned expenditures, leveraging the policy’s surrender value as collateral and avoiding the need to liquidate investments prematurely.\u003C/p>\u003Ch3>\u003Cstrong>6. Additional Riders for Enhanced Coverage\u003C/strong>\u003C/h3>\u003Cp>Policyholders have the option to enhance their coverage with riders that cater to specific needs, such as critical illness, accidental death, or disability. These riders provide additional financial protection, ensuring comprehensive coverage against unforeseen circumstances that may impact the policyholder's financial stability.\u003C/p>\u003Ch2>\u003Cstrong>Tax Benefits Of Savings Plan\u003C/strong>\u003C/h2>\u003Cp>Beyond the comprehensive insurance coverage and income benefits, premiums paid under the Shriram Life Super Income Plan qualify for tax benefits of a savings plan under Section 80C of the Income Tax Act, 1961. This provision allows policyholders to reduce their taxable income by up to ₹1.5 lakhs per financial year, making it an attractive option for salaried individuals looking to optimize their tax planning strategies.\u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>The Shriram Life Super Income Plan stands out as a comprehensive financial solution for salaried individuals seeking to secure their future while optimizing tax benefits of savings plan. With its flexible premium payment terms, guaranteed income benefits, and the option to avail loans, this plan caters to diverse financial needs. Moreover, the tax benefits under Section 80C add a significant advantage, allowing policyholders to reduce their taxable income while building a secure financial foundation.\u003C/p>\u003Cp>For those considering long-term financial planning and seeking reliable insurance coverage coupled with tax-efficient savings, the Shriram Life Super Income Plan offers a balanced approach. By integrating this plan into your financial portfolio, you not only safeguard your family’s future but also align with prudent tax-saving strategies. Remember, it’s advisable to consult with a financial advisor to tailor the plan according to your specific goals and ensure comprehensive coverage based on your unique circumstances. Start securing your future today with a plan that offers both protection and prosperity.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"Comprehensive Guide on Annuity in Life Insurance\",\"heading\":\"Comprehensive Guide on Annuity in Life Insurance\",\"short_description\":\"\u003Cp>Planning for retirement is important for everyone because it will ensure one can have a steady source of income after one’s working life is over an\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/44.%20Comprehensive%20Guide%20on%20Annuity%20in%20Life%20Insurance_0.jpg?VersionId=rcYECkgBeO.rILNSgFjBFyDII9Wo4Yfx\",\"alt\":\"Guide on Annuity in Life Insurance\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-18T07:35:41\",\"updated_on\":\"2024-12-18T07:35:47\",\"read_more_title\":\"Know More\",\"slug\":\"/comprehensive-guide-on-annuity-in-life-insurance\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>Planning for retirement is important for everyone because it will ensure one can have a steady source of income after one’s working life is over and regular income stops post-retirement. While the Indian market provides numerous financial products for retirement planning, annuity plans are often desirable. In this blog, we cover what is an annuity plan, its benefits, different types of annuity plans, etc., so you can make informed retirement planning decisions.\u003C/p>\u003Ch2>\u003Cstrong>What is Annuity in Life Insurance?\u003C/strong>\u003C/h2>\u003Cp>An annuity is a formal, legal contract between a policyholder and an insurer that requires the insurer to pay the policyholder immediately or later on specified dates, in exchange for a lump sum premium payment or regular smaller premium payments.\u003C/p>\u003Cp>Since annuities are designed to provide guaranteed payment on pre-agreed terms, they are considered the safest retirement planning tool for most Indians. There are different types of annuity in life insurance, each with unique features, positives, and drawbacks, so invest in plans that align with your long-term financial goals.\u003C/p>\u003Ch2>\u003Cstrong>How do Annuities Work?\u003C/strong>\u003C/h2>\u003Cp>An annuity plan is a risk-free retirement tool in which the insurance company agrees to pay a specific amount immediately after a lump sum premium payment or later in the future (mostly retirement years) against regular premium payments.\u003C/p>\u003Cp>If you plan to rely on annuity payments as the major post-retirement income source, estimate your approximate financial requirements during the retirement phase and invest accordingly. You can use an online annuity plan calculator to ease the process.\u003C/p>\u003Ch2>\u003Cstrong>Benefits of Annuity Plan\u003C/strong>\u003C/h2>\u003Cp>Now that you have a basic understanding of what is an annuity, let’s explore the various benefits attached to this plan.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Guaranteed Income\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Annuity plans are among the best \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">Retirement Plans\u003C/a> because they guarantee stable and predictable payments, bringing ease and comfort during retirement. However, the returns may fluctuate for unit-linked annuity plans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Lifetime Coverage\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you research ‘what is Annuity Insurance’ online and the different types of annuity insurance, you will come across some life annuities that provide lifetime income options. These plans ensure your expenses don’t outlive your savings till you’re alive.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The premiums you pay toward annuity plans are exempt from tax u/s 80 C, making them great tax-saving tools. Annuity earnings are covered by tax-deferred growth, meaning these earnings won’t attract tax until you start making withdrawals.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Risk-free Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Fixed annuities provide risk-free and predictable payments, irrespective of the market conditions. Fixed annuities are ideal if you have a low-risk profile and want to enjoy a steady, fixed income during retirement.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Payment Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Policyholders can choose to receive payments monthly, quarterly, or yearly, depending on their preference and financial obligation. It provides flexibility and ease in managing finances during golden years.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Potential for Higher Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Investing in unit-linked annuity plans, like \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/pension-plus\\\" target=\\\"_blank\\\">Shriram Life Pension Plus\u003C/a>, enables policyholders to build wealth over a period through market-linked gains.\u003C/p>\u003Ch2>\u003Cstrong>Different Types of Annuity Plans\u003C/strong>\u003C/h2>\u003Cp>The best way to understand what is annuity insurance is to get into the specifics of the product instead of stopping at the fundamentals. Currently, the Indian market has the following different types of annuity plans:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Immediate Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>As the name suggests, an \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/immediate-annuity-plus\\\" target=\\\"_blank\\\">immediate annuity plan\u003C/a> is designed for individuals who want to receive income after investing a one-time, single payment. These plans can start giving regular income as early as within a month. Immediate annuity policies are better suited for those nearing retirement.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Deferred Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Deferred annuity plans are tailored for individuals who want to accumulate wealth over time before receiving payouts. You can invest in this plan by making a lump sum or regular premium payments, and these investments will grow during the accumulation phase. Unlike immediate annuity plan, deferred annuity plans’ payment phase begins at a later date, typically after retirement. It is well suited for young individuals or those in their 40s or 50s.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Fixed Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Fixed annuities are great for people who want a stable and predictable income to lead a comfortable post-retirement life. They are considered the safest annuity plan for individuals who seek financial security, regardless of market conditions. Insurers pay a fixed rate of interest on such investments and the payment also remains fixed unless specified otherwise in the policy documents. You can consider diversifying your retirement portfolio by investing in our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/savings-plan\\\" target=\\\"_blank\\\">Savings Plans\u003C/a> and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/protection-plan\\\" target=\\\"_blank\\\">Protection Plans\u003C/a> for additional income potential.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Variable Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Variable Annuities are a dynamic retirement planning tool because they provide variable returns in exchange for a lump sum investment. The premiums paid in Variable Annuities are invested in different financial securities like mutual funds, bonds, stocks, etc., whose returns are tied to market performance. You should choose such annuity plans only if you have a moderate to high-risk profile.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Life Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A life annuity plan is designed to give you a steady income stream throughout your life. It ensures you don’t outlive your savings, giving you a relatively comfortable life. Some life annuities extend this benefit to the policyholder’s spouse so they continue receiving timely payments even after their partner’s death.\u003C/p>\u003Ch2>\u003Cstrong>How to Select an Annuity Plan?\u003C/strong>\u003C/h2>\u003Cp>Simply knowing what is annuity insurance won’t help you choose the right plan aligned with your financial goals. If you want to select the best annuity plan for your retirement, follow the below-mentioned tips:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Assess Your Financial Goals\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Before looking for any retirement annuity plans, calculate your anticipated monthly expenses during retirement, including daily expenses, potential medical costs, unexpected expenses, etc. Now, search for plans that can help you receive the estimated figure.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Evaluate Risk Tolerance\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Different annuities have varying levels of risks involved, so choose a plan that aligns with your preferred risk tolerance level. For example, people with low-risk profiles can stick to fixed annuities, while those with moderate to high-risk profiles can explore variable annuity plans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Factor in Inflation\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Inflation can erode your purchasing power significantly, and even affect your retirement fund if you don’t consider it during your planning phase. Consider looking for annuity plans with inflation-adjusted payouts, so your income stays at par with the rising living cost.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Research about the Insurer\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A trustworthy insurer with a good track record will provide a hassle-free and seamless experience throughout the policy tenure. So, always check the insurer’s reputation, claim settlement ratio, reviews, news, etc., before finalizing one. It will save you from unwanted stress later in life.\u003C/p>\u003Ch2>\u003Cstrong>Compare Similar Annuity Plans\u003C/strong>\u003C/h2>\u003Cp>Whether you’re looking for deferred & immediate annuity or fixed annuity, you should always compare similar types of policies before finalizing one. Comparing similar options will ensure you get a better plan with the best features and reasonable premiums.\u003C/p>\u003Ch2>\u003Cstrong>Which Annuity Plan is Most Suitable for You?\u003C/strong>\u003C/h2>\u003Cp>Different annuity plans are recommended for people with varying goals and risk appetite. For example, an immediate annuity can be more suitable for retirees or those nearing retirement seeking instant income. On the other hand, deferred annuities can be more suitable for young individuals who want to build wealth and a large retirement fund over time.\u003C/p>\u003Cp>Fixed annuities are great for people seeking a stable and risk-free income during retirement, whereas variable annuities are ideal for people with moderate to high-risk appetites. Always evaluate your financial condition, goals, obligations, etc., before choosing the right annuity plan. \u003C/p>\u003Ch2>\u003Cstrong>What is the Best Time to Buy an Annuity Plan?\u003C/strong>\u003C/h2>\u003Cp>It depends on your current life stage and financial readiness. People in their 30s and 40s can consider buying a deferred annuity plan because it builds a substantial retirement fund over a period, generating higher returns. Those nearing retirement or in their 50s and 60s can purchase immediate annuity plans to convert their accumulated savings into a steady income stream.\u003C/p>\u003Ch3>\u003Cstrong>Example of an Annuity\u003C/strong>\u003C/h3>\u003Cp>Atal Pension Yojana (APY) is a great example of an annuity because this government-backed pension scheme works exactly like traditional annuity plans. It requires individuals to pay a fixed premium during their active working years. Once they reach the age of 60, they can start receiving pension payment for life. The payment amount is determined based on the contribution amount and the age at which they started contributing. The pension benefit can be passed to their spouse in case of their death. \u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>Your retirement years should be reserved for enjoying life, not worrying about daily expenses. While numerous retirement plans in the market can be strategically chosen to build a significant retirement fund, an annuity plan comes across as the ideal option for most individuals. If you want a sense of stability and predictability for post-retirement income, consider checking our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">Shriram Life Assured Income Plan\u003C/a>. It features the benefits of savings, retirement, and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/child-plan\\\" target=\\\"_blank\\\">child plans\u003C/a> in a single policy.\u003C/p>\u003Cp>This plan provides a regular income option to assist you with your monthly expenses. Our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/early-cash-plan\\\" target=\\\"_blank\\\">Shriram Life Early Cash Plan\u003C/a> is a better choice if you want to get a larger lump sum on retirement or policy maturity. It features cash bonus guarantee, power of compounding, life cover, etc., to help you achieve your long-term financial goals. You can also explore the different annuity plans provided by Shriram Life Insurance to secure your golden years.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"What Is a Life Insurance Premium and How Is It Calculated?\",\"heading\":\"What Is a Life Insurance Premium and How Is It Calculated?\",\"short_description\":\"\u003Cp>Buying life insurance can be one of the prudent, responsible decisions to secure your family’s future.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/43.%20Life%20Insurance%20Premium_%20What%20it%20is_%20How%20does%20it%20calculated__0.jpg?VersionId=Lc7uH5s7_p8CRqDBVB9zmnK8pj6a4BI4\",\"alt\":\"How is life insurance premium calculated?\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-17T05:19:39\",\"updated_on\":\"2024-12-17T05:19:44\",\"read_more_title\":\"Know More\",\"slug\":\"/life-insurance-premium-what-is-it-how-does-it-calculate\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>Buying life insurance can be one of the prudent, responsible decisions to secure your family’s future. However, the world of life insurance can appear overwhelming and difficult to navigate because of its terminologies. One of the most common words you’ll see throughout your policy search is ‘insurance premium.’ This seemingly simple term is the financial backbone of all life insurance policies. This blog aims to simplify the understanding of insurance premium and explain how it is calculated so you can proceed with your research with confidence and ease.\u003C/p>\u003Ch2>\u003Cstrong>What is Insurance Premium?\u003C/strong>\u003C/h2>\u003Cp>When one is exploring insurance policies, it is useful to begin by understanding what is life insurance premium. You can view it as an amount paid/payable to the insurance company to keep your policy active. One way to think of it is the cost of securing financial protection for your loved ones. Insurance premiums can be paid at varying frequencies, depending on the policy’s terms. Life insurance premium varies from one policy and individual to another and is calculated based on various factors.\u003C/p>\u003Ch2>\u003Cstrong>How Does Insurance Premium Work?\u003C/strong>\u003C/h2>\u003Cp>When you make the first insurance premium payment after signing the life insurance policy documents, you enter into a legal contract with the insurer. It makes the insurance company liable to pay the agreed sum assured to the nominee in case of your death, provided the policy was active at the time of death.\u003C/p>\u003Cp>Continuous premium payments ensure the validity of the policy. If you’re buying your first life insurance policy and are unsure of how much premium it will require, use an online life insurance premium calculator to get an approximate estimate.\u003C/p>\u003Ch2>\u003Cstrong>How is Insurance Premium Calculated?\u003C/strong>\u003C/h2>\u003Cp>Knowing what is the premium for life insurance isn’t enough to find the right policy; you must also know how insurers calculate premiums to get the best policy with competitive premiums. While insurers use several factors to calculate insurance premiums, the following are the most common:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Age\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Age plays a crucial role because elders are perceived as more prone to diseases and life-threatening conditions than their younger counterparts. Hence, premiums for young individuals are comparatively lower than those for elders.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Lifestyle\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Insurers generally keep higher premiums for individuals who frequently engage in risky activities like hiking, diving, racing, etc. You can expect slightly lower premiums if you don’t participate in similar activities.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Medical History\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Assessing medical history helps insurers determine the risk associated with an individual’s life. People who have suffered severe diseases in the past, underwent surgery, or have a family history of critical illnesses, etc., are more likely to be charged higher premiums than those who don’t.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Profession\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>People employed in risky professions or industries, such as mining, the oil & gas sector, etc., are required to pay higher premiums because they’re regularly exposed to working environments that have some inherent risks.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Policy Duration\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A longer policy term typically increases the insurer’s risk exposure. Hence, longer policies may have slightly higher premiums than shorter policies. However, exceptions are always there.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Income\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Many insurers assume higher-income people have higher coverage requirements and a relatively lower perceived financial risk. Hence, premiums in such cases are comparatively lower.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Marital Status & Dependents\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The number of dependents influences the eligibility for life insurance coverage and premium payment capacity. Some insurers may reduce the sum assured cover and premium if you have a higher number of dependents.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Sum Assured Amount\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The higher the policy’s sum assured amount, the higher the premium and vice-versa.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Rider Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Every rider has an additional cost. Your premium will increase in direct proportion to the number of riders you add to the main policy.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Residential Location\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>All residential locations have varying crime rates and environments. Hence, those residing in safer localities may get lower premiums than those living in risky locations.\u003C/p>\u003Cp>These factors determine premiums for all \u003Ca href=\\\"https://www.shriramlife.com/life-insurance\\\" target=\\\"_blank\\\">types of life insurance\u003C/a>, but some insurers can have additional factors in place. If you’re overwhelmed with premium calculations, always use a reliable life insurance premium calculator online to get approximate premium estimates.\u003C/p>\u003Ch2>\u003Cstrong>Types of Insurance Premiums\u003C/strong>\u003C/h2>\u003Cp>Now that you’ve understood what is life insurance premium is and how it’s calculated, let’s take a quick look at some other common types of insurance premiums shared below:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Health Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>It is the amount you pay to keep your health insurance policy active. A health insurance policy typically covers medical expenses like hospitalization, surgeries, treatments, etc. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Auto Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>As the name suggests, it is the amount you pay to insure your vehicles against financial damages arising from potential risks like accidents, theft, natural disasters, etc.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Home owners Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Homeowners make periodic premium payments to financially protect their homes and belongings against risks like fire, natural calamities, theft, and riots.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Renters Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Renters premium is the cost you pay to insure the contents of the rented home, such as furniture, appliances, personal belongings, and other possessions, against unfortunate events like theft, damage, fire, etc.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Life Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A life insurance premium is paid to secure your family’s financial future in case of your death. \u003C/p>\u003Ch2>\u003Cstrong>Factors to Consider When Buying an Insurance Premium Policy\u003C/strong>\u003C/h2>\u003Cp>There are different types of life insurance products in the Indian market, so always use the following factors to find, evaluate, compare, and buy the right policy.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Financial Requirements\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>You should begin by analyzing your current financial condition and deciding how much you want your family to receive for financial security in case of your death. In addition to insurance, you can consider investing in our Savings Plans or Protection Plans to diversify the safety net.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Affordability\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>It is the most crucial factor that no one should ignore. Policies are generally long-term and demand steady premium payments to ensure validity. So, pick policies with reasonable premiums that can be paid easily and consistently. Consider doing a life insurance premium calculation based on your financial standing to maintain a balance between adequate coverage and affordability.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Inclusions and Exclusions\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>No two policies are designed equally, so you must go through the policy’s inclusions and exclusions for clarity. Also read the terms and conditions regarding coverage, life insurance premium paying terms, exclusions, riders, maturity benefits, etc., to avoid hiccups at a later stage.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Claim Settlement Ratio\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Check the insurer’s previous claim settlement records to ensure your family receives the policy amount without hassle.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Riders\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If standard policy coverage seems insufficient, you can purchase riders that enhance the coverage, providing additional benefits to beneficiaries. Not all insurers provide the same riders, so check the insurer-specific website for accurate details. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Policy Duration \u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>You should always pick a policy duration that aligns with your long-term financial goals. It should also make it easier for you to make consistent premium payments without putting financial strain. \u003C/p>\u003Ch2>\u003Cstrong>What are the Key Factors Affecting Insurance Premium?\u003C/strong>\u003C/h2>\u003Cp>Numerous factors affect insurance premiums, such as the person’s age, medical history, marital status, number of dependents, profession, location, and much more. We have discussed all these factors above, so head to the ‘how is insurance premium calculated’ section for detailed explanation. \u003C/p>\u003Ch2>\u003Cstrong>What Determines an Insurance Premium?\u003C/strong>\u003C/h2>\u003Cp>In India, actuaries are responsible for determining insurance premiums. They use several financial theories, relevant statistics, and formulas to calculate the probability of various events, such as accidents, unemployment, marriage, retirement, etc., to determine the cost required to cover future claims, administrative expenses, and profit margin. They also use various factors, as discussed above, to ensure they finalize financially viable and fair premiums.\u003C/p>\u003Ch2>\u003Cstrong>How to Pay Insurance Premiums?\u003C/strong>\u003C/h2>\u003Cp>Insurance premium payments can be made via multiple options. You can pay online using net banking, debit and credit cards, mobile apps, and online wallets like Gpay, Paytm, etc. Offline payments can also be made by issuing checks. Busy professionals can issue online standing instructions to their credit card partners for fixed, automatic deductions. Policyholders have the option to choose their premium payment frequency, such as monthly, quarterly, semi-annually, annually, or a single payment, depending on their preference.\u003C/p>\u003Ch2>\u003Cstrong>What does an Insurance Company do with the Premiums?\u003C/strong>\u003C/h2>\u003Cp>Insurance companies use the premiums to cover potential claims arising from insured events. They also invest a portion of the premium in various financial securities and instruments, such as bonds, stocks, etc., to generate additional income. This income offsets operational costs and maintains competitive, fair pricing for all insurance policies.\u003C/p>\u003Ch2>\u003Cstrong>What is an Actuary?\u003C/strong>\u003C/h2>\u003Cp>Actuary is a certified professional trained to use advanced statistical and mathematical methods to assess and manage financial risks and uncertainties, especially in the insurance industry. They calculate the potential cost of future events, helping insurance companies design policies to minimize those risks. \u003Cbr />Since actuaries are qualified experts in analyzing financial implications of uncertainty and risk through complex models based on social factors, demographics, economics, etc., they finalize the premiums for different types of life insurance products.\u003C/p>\u003Ch2>\u003Cstrong>What Happens if You Stop Paying Life Insurance Premiums?\u003C/strong>\u003C/h2>\u003Cp>Delay in premium payment or entirely stopping premium payments can result in policy lapse. As a result, your family no longer remains eligible to claim the policy benefits. Most insurers provide a grace period to enable policyholders to make timely payments without incurring any penalty or coverage termination.\u003C/p>\u003Cp>The grace period can be 15-30 days, but it varies from insurer to insurer. We encourage policyholders to review their policy’s life insurance premium-paying terms and grace period to avoid untimely policy lapse or penalties.\u003C/p>\u003Ch2>\u003Cstrong>How Can I Save on my Life Insurance Premiums?\u003C/strong>\u003C/h2>\u003Cp>Buying a policy when you’re young is the best way to save on insurance premium payment. Maintaining a healthy lifestyle, avoiding risky activities, comparing quotes before finalizing a policy, and disclosing pre-existing medical conditions are additional ways to save on your premiums. We have discussed how different factors influence life insurance premium above, so you can use that information for extra savings. \u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>Having the right life insurance policy will ensure your family’s financial needs are met, even when you’re not around. To enjoy optimal benefits of life insurance policies, always invest in a policy with reasonable premiums and adequate coverage. You can explore our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/early-cash-plan\\\" target=\\\"_blank\\\">Shriram Life Early Cash Plan\u003C/a> because it provides dual benefits of wealth creation through compounding and cash bonus guarantee, while giving life insurance protection.\u003C/p>\u003Cp>Our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">Shriram Life Assured Income Plan\u003C/a> is another great option that provides assured income and life insurance cover at low premium payment plans. We have various \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">retirement plans\u003C/a>, \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/protection-plan\\\" target=\\\"_blank\\\">protection plans\u003C/a>, etc., designed to achieve different financial goals, so explore the plans right for you. Consider using the information in this guide and an online life insurance premium calculator to pick the right policy with reasonable premiums.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"What is a Pension Payment Order and Why is it Important for Pensioners?\",\"heading\":\"What is a Pension Payment Order and Why is it Important for Pensioners?\",\"short_description\":\"\u003Cp>Timely pension payments are the backbone of a stable and worry-free life post-retirement.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/52.%20What%20is%20a%20Pension%20Payment%20Order%20%28PPO%29%20and%20Why%20is%20it%20Important__0.png?VersionId=tvKRLsWdZV.Oa6i1x1RgASb2Tg2E4P58\",\"alt\":\"What is Pension Payment Order and Why is it Important?\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-16T06:00:21\",\"updated_on\":\"2024-12-16T06:01:35\",\"read_more_title\":\"Know More\",\"slug\":\"/what-is-a-pension-payment-order-and-why-is-it-important-for-pensioners\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/retirement\\\" hreflang=\\\"en\\\">Retirement\u003C/a>, \u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>Timely pension payments are the backbone of a stable and worry-free life post-retirement. In fact, it is the only income source some individuals will have after retirement. If you’re nearing retirement, you must start the process of obtaining a Pension Payment Order (PPO) a few months before your retirement date so you can start receiving the pension benefits right after your retirement. \u003C/p>\u003Cp>Without a PPO, your pension amount can be withheld, delayed, or lowered, creating unwanted stress. This article aims to help government and public sector employees registered under the Employee Provident Fund (EPF) understand the fundamentals and importance of PPO. It will empower them with the knowledge needed to obtain a PPO and plan their retirement better.\u003C/p>\u003Ch2>\u003Cstrong>Introduction to Pension Payment Order (PPO)\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>Definition and Overview\u003C/strong>\u003C/h3>\u003Cp>A Pension Payment Order (PPO) is an important legal document that acts as an official authorization for pension disbursement. It is a detailed document that lists crucial details, such as the pensioner’s name, retirement date, last drawn salary, pension amount payable, mode of payment, pensioner’s bank account details, etc.\u003C/p>\u003Cp>This order is obtained after a thorough review of the retiree’s service records, pension entitlements, and other relevant details so the final rights and obligations can be determined. If you’re registered under the EPS pension scheme, you will need this order to receive consistent pension income throughout your retirement years.\u003C/p>\u003Ch3>\u003Cstrong>Purpose and Importance\u003C/strong>\u003C/h3>\u003Cp>Since a PPO facilitates the pension disbursement process and determines the pension amount, retirees can rest assured of receiving a fixed income every month in their non-working years. The details in this order can help them plan their retirement expenses for a smooth and stress-free life. \u003Cbr />We recommend not relying on pension retirement benefits alone and investing in reliable retirement and pension solutions during active work years for better returns. \u003C/p>\u003Ch2>\u003Cstrong>Components of a PPO\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>PPO Number\u003C/strong>\u003C/h3>\u003Cp>Every PPO order contains a unique PPO number that helps identify a pensioner registered under the Employee Provident Fund (EPF). It is a 12-digit alphanumeric code used as a reference number for all pension-related transactions and communications. Whether you want to file a pension-related complaint to the EPFO pension authority or track your pension payments, you will always need your PPO number.\u003C/p>\u003Ch3>\u003Cstrong>Pensioner’s Details\u003C/strong>\u003C/h3>\u003Cp>A PPO lists the pensioner’s details, such as their date of retirement, date of birth, last drawn salary, pension-paying authority, pension benefits, bank details, etc. All these details are obtained after a thorough pension verification process, which facilitates error-free, hassle-free, and timely pension disbursement to the retiree.\u003C/p>\u003Ch3>\u003Cstrong>Pension Amount and Date of Commencement\u003C/strong>\u003C/h3>\u003Cp>It is the most crucial component of any PPO because it offers clarity about the fixed monthly payments a retiree will receive, along with details of the first payment date. This information can help retirees plan their monthly and annual budgets accordingly. If you’re entitled to a big pension after retirement, consider investing in reliable pension fund management solutions for diversifying retirement income. \u003C/p>\u003Ch2>\u003Cstrong>Why is PPO Important in Retirement Planning?\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>Ensures Financial Stability\u003C/strong>\u003C/h3>\u003Cp>Retirees registered under the EPS pension scheme can use their PPO to plan their retirement. PPO guarantees a steady and predictable income, reducing retiree’s dependence on their savings. This financial cushion makes it easier to plan expenses and investments for a secure and stable future.\u003C/p>\u003Ch3>\u003Cstrong>Complements Life Insurance Products\u003C/strong>\u003C/h3>\u003Cp>While pensions provide financial security during retirement, no one should rely on pensions as the sole income source during non-working years. It can be best used as a complementary financial tool with goal-aligned life insurance products, like our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/early-cash-plan\\\" target=\\\"_blank\\\">Early Cash Plan\u003C/a> and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/pension-plus\\\" target=\\\"_blank\\\">Pension Plus\u003C/a>. A diversified retirement plan like this strikes the perfect balance of consistent income and emergency support. \u003C/p>\u003Ch3>\u003Cstrong>Acts as a Proof of Pension Entitlement\u003C/strong>\u003C/h3>\u003Cp>Employees entitled to EPFO pension will need a valid Pension Payment Order (PPO) as legal proof of a pensioner’s entitlement to pension benefits. This order will always come in handy while handling legal matters related to pensions or tracking pension payments and complaints. It will ensure you continue to enjoy financial stability in the form of timely, predictable pension income. \u003Cbr />Obtaining a PPO and Choosing the Right Retirement Plan\u003C/p>\u003Ch3>\u003Cstrong>Application Process\u003C/strong>\u003C/h3>\u003Cp>You can apply for a PPO by submitting a pension application to the Accountant General (A&E) through your department. After processing the pension papers, the Accounts Office will issue the Pension Payment Order (PPO). If you want to strengthen your financial security by diversifying your retirement income, we recommend choosing the right retirement plan.\u003C/p>\u003Cp>The retirement plan’s application process will vary depending on the plan provider, so we recommend checking the precise application process after finalizing a retirement and pension fund management provider. You can explore our retirement plans to find goal-aligned options along with their detailed application processes. \u003C/p>\u003Ch2>\u003Cstrong>Required Documentation\u003C/strong>\u003C/h2>\u003Cp>You will need the following documents while applying for a Pension Payment Order (PPO):\u003C/p>\u003Cul>\u003Cli>Identity proof\u003C/li>\u003Cli>Age proof\u003C/li>\u003Cli>Bank account details for pension disbursement \u003C/li>\u003Cli>Two passport-size joint photographs with your spouse duly attested by the Head of Office\u003C/li>\u003Cli>Two copies of identification marks duly attested by a Gazetted Officer\u003C/li>\u003Cli>Two sets of specimen signatures duly attested by a Gazetted Officer\u003C/li>\u003Cli>Family details, including the age, marital status, and details of handicapped members (if any)\u003C/li>\u003Cli>Updated service book\u003C/li>\u003Cli>Death certificate or Legal Heirship certificate for family pension\u003C/li>\u003Cli>Form 19\u003C/li>\u003Cli>Nomination for Life Time Arrears of CVP/Gratuity/Pension\u003C/li>\u003C/ul>\u003Cp>When applying for a retirement plan, you will typically need identity and age proof, along with other documentation as specified by the retirement plan provider. \u003C/p>\u003Ch2>\u003Cstrong>Common Issues with PPO and Retirement Planning Solutions\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>Lost PPO Number\u003C/strong>\u003C/h3>\u003Cp>Losing a PPO number for any reason can affect your pension disbursement process or make it challenging to raise complaints to relevant authorities or track pension-related transactions. If you ever lose your PPO number, contact your bank or Pension Disbursing Authority (PDA) for assistance. Alternatively, you can also visit the EPFO pension website to access the pensioner’s portal and find your PPO number by providing your bank account number or Employee Provident Fund (EPF) account number. \u003C/p>\u003Ch3>\u003Cstrong>Errors in PPO Details\u003C/strong>\u003C/h3>\u003Cp>While pension verification requires thorough review, it doesn’t eliminate any chances of accidental errors in the issued PPO. Incorrect date of birth, bank details, family member list, revised pay, etc., are some common errors reported in PPOs, but they can be corrected by contacting your Head of Office or Pension Disbursing Agency (PDA).\u003C/p>\u003Ch2>\u003Cstrong>Maximize Your Retirement Income with Shriram Life Insurance\u003C/strong>\u003C/h2>\u003Cp>EPFO pension often forms a significant portion of one’s retirement income, but you cannot get it automatically on retirement. You need a PPO order that authorizes and streamlines your pension payments. This legal document is crucial for your retirement planning because it lists the steady income you will receive during your non-working years. If you want to live a life free of financial challenges after retirement, we recommend combining your EPS pension scheme with complimentary insurance and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">retirement plans\u003C/a> from Shriram Life Insurance for extra retirement benefits. Our retirement plans such as \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/immediate-annuity-plus\\\" target=\\\"_blank\\\">Shriram Life Immediate Annuity Plus\u003C/a> and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">Shriram Life Assured Income Plan\u003C/a> can give you the benefits of regular savings and assured income, easing your retirement years.\u003Cbr /> \u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"Understanding the Benefits of NPS and PPF for Retirement\",\"heading\":\"Understanding the Benefits of NPS and PPF for Retirement\",\"short_description\":\"\u003Cp>Every working individual dreams of living a comfortable and worry-free retirement life.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/51.%20Understanding%20the%20Benefits%20of%20NPS%20and%20PPF%20for%20Retirement_0.png?VersionId=mS10E7cDSwwnDbXd.TIag1FfaKINRqqW\",\"alt\":\"Understanding the benefits of NPS and PPF\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-13T07:16:55\",\"updated_on\":\"2024-12-13T07:17:04\",\"read_more_title\":\"Know More\",\"slug\":\"/understanding-the-benefits-of-nps-and-ppf-for-retirement\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>Every working individual dreams of living a comfortable and worry-free retirement life. This can only become a reality with strategic retirement planning. Whether you’re working in an start up or employed in a top MNC, you must invest in secure retirement plans in India that align with your retirement goals.\u003C/p>\u003Cp>It will ensure you receive a steady income post-retirement. While there are numerous retirement plans in India, NPS and PPF are the most popular choices. These government-backed retirement schemes have a lot in common, yet there are differences too.\u003C/p>\u003Cp>Not knowing the specific benefits of each may result in making suboptimal choices that significantly lower the retirement funds. This article highlights a clear NPS and PPF comparison, along with fundamentals and clear benefits, so you can plan and invest correctly for optimal gains.\u003C/p>\u003Ch2>\u003Cstrong>Overview of NPS and PPF\u003C/strong>\u003C/h2>\u003Cp>NPS is a voluntary pension system for all Indian citizens, including NRIs and OCIs. It is currently regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and is considered one of the best market-linked defined contribution schemes that enable people to build their retirement income and save tax. Many people are drawn to this scheme because of the lucrative NPS tax benefits that we will discuss later in this article.\u003C/p>\u003Cp>For risk-averse individuals, PPF is typically the first consideration for retirement planning in India. It is one of the oldest long-term savings schemes regulated by the Ministry of Finance that provides guaranteed returns. Unlike NPS, your PPF investment isn’t affected by market volatility, making it a safe retirement plan for conservative investors who want assured retirement funds.\u003C/p>\u003Ch2>\u003Cstrong>Key Benefits of NPS\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexibility\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you assess NPS vs. PPF regarding flexibility, NPS clearly wins. It allows you to decide how much of the invested amount you want to allocate to equity, corporate debt, government bonds, and alternative investment funds.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Self-employed individuals can avail NPS tax benefits u/s 80CCD (1). They are eligible for tax deductions up to 20% of their gross income, with a ceiling of ₹1.50 lakh u/s 80 CCE. An additional deduction of ₹50, 000 is allowed over the ₹1.50 lakh limit u/s 80 CCE.\u003C/p>\u003Cp>If you’re an employed individual, you can claim up to 10% of salary (basic + DA) u/s 80 CCD (1) on your contribution as deduction, with a ceiling of ₹1.50 lakh limit u/s 80 CCE, and an additional ₹50, 000 u/s 80 CCD (1B).\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Low Cost\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Besides the generous NPS tax benefits, this scheme also provides the lowest account maintenance costs. For example, the annual Permanent Retirement Account (PRA) maintenance charge per account by CRA is ₹69, a charge per transaction is ₹3.75, etc. Such low costs make NPS a relatively affordable retirement product compared to other similar options.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Portability\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>In the NPS vs. PPF comparison, NPS provides greater ease of portability. Whether you’re switching to a new company in a new city or changing your career path altogether, you can continue using the same PRAN for convenience. All NPS accounts can be easily transferred across locations and employment, provided you update the details linked to your PRAN.\u003C/p>\u003Ch2>\u003Cstrong>Key Benefits of PPF\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Safety and Security\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Conservative investors often include PPF in their retirement planning in India because of its assured returns. Since the government sets PPF account rates, investors can expect risk-free and guaranteed returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax-free Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>While NPS tax benefits are limited, PPF provides full tax exemption on the maturity and earned interest amount. You can also claim a tax deduction on the PPF contribution in a financial year u/s 80C, subject to a maximum of ₹1.50 lakh. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Long-term Savings\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>PPFs have a lock-in period of 15 years to support long-term financial goals during retirement. Working individuals in their mid-30s and 40s should include PPF in their retirement planning in India because it will give them a guaranteed and steady monthly income post-retirement. Avoid making partial or early withdrawals before the maturity period to get optimal returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Loan Facility\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>PPFs have a long lock-in period and partial withdrawals cannot be made in the first six years. However, you can take a loan against your accumulated PPF balance if you need urgent funds during this phase. You can get a loan between the 3rd and 6th year. The loan amount cannot exceed 25% of the PPF balance available two years before placing a loan application.\u003C/p>\u003Ch2>\u003Cstrong>Comparing NPS and PPF\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Risk and Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you’re evaluating the NPS vs. PPF option from a risk perspective, PPF emerges as the safest option. Since PPF is backed and regulated by the Ministry of Finance, investors can rest assured of receiving guaranteed and risk-free funds during retirement. NPS is a better option for more risk-tolerant individuals because all NPS returns are market-linked, making them volatile. Since risk and returns are directly proportional, NPS has a relatively greater potential to generate higher returns than PPF.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Suitability\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Investors wanting assured, steady, risk-free retirement funds must choose PPF over NPS. Those with a risk-taking appetite can consider investing in NPS for potentially higher returns. You can explore our retirement plans to find options aligned to your risk appetite and retirement goals.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Diversification\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The best part about retirement planning in India is that you can create a diversified retirement plan that provides a healthy mix of safety, higher returns, and flexibility. Instead of relying only on PPF or NPS, you can allocate your investment in both plans according to your risk profile. You can also include financial products from our retirement and investment plans to diversify your retirement planning.\u003C/p>\u003Ch2>\u003Cstrong>How to Maximize Benefits?\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Investment Strategy\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>We recommend investing in NPS and PPF early in your career to benefit from compounding growth. You can also set a monthly or quarterly contribution schedule instead of lump-sum yearly payments to avoid market timing risks and smooth out price fluctuations in NPS’s equity component. To enjoy optimal returns, avoid early withdrawals to prevent tax implications.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Planning\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you have invested in NPS, we recommend withdrawing up to 60% on maturity and using the remaining balance to buy the best annuity plan, like our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/immediate-annuity-plus\\\" target=\\\"_blank\\\">Immediate Annuity Plus plan\u003C/a>. Such withdrawals will be tax-free, and the annuity purchase will create more avenues for steady income throughout your retirement. \u003Cbr />PPF account holders must avoid withdrawing any amount in the first five years; otherwise, it will be taxed as normal income. Keep your PPF untouched for 15 years and enjoy full withdrawal at zero tax, including tax-free interest income.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Regular Reviews\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Investments in \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">retirement plans\u003C/a> require constant monitoring and adjustment, especially if you’re investing in NPS. If your income and risk appetite increases, consider reassessing your asset allocation for potentially higher returns. You can also invest in other retirement insurance plans that further support your retirement goals.\u003C/p>\u003Ch2>\u003Cstrong>Secure Your Retirement with Shriram Life Insurance\u003C/strong>\u003C/h2>\u003Cp>Planning early for retirement isn’t just a wise decision but an essential one. Knowing the fundamentals isn’t enough if you want to invest in retirement plans in India like NPS and PPF. You must know the precise benefits of each plan, including their tax implications and key differentiator points, to make informed investment decisions. It will ensure you receive a predictable and steady income throughout your retirement. \u003C/p>\u003Cp>While investing in both schemes is a better choice from a diversification perspective, it is also ideal for supporting a worry-free and comfortable retirement. You can plan your retirement with Shriram Life Insurance because we offer a wide range of retirement, \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/protection-plan\\\" target=\\\"_blank\\\">protection\u003C/a>, \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/investment-plan\\\" target=\\\"_blank\\\">investment\u003C/a>, and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-savings-plan\\\" target=\\\"_blank\\\">savings plans\u003C/a> that can help you achieve financial freedom in your post-retirement phase.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"Difference Between Linked and Non-Linked Insurance Plans\",\"heading\":\"Difference Between Linked and Non-Linked Insurance Plans\",\"short_description\":\"\u003Cp>When one has to choose a life insurance plan, the variety and options available across different types of life insurance plans, can pose a challeng\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/12.%20Participating%20vs.%20Non-Participating_%20Understanding%20Life%20Insurance%20Policy%20Types_0.jpg?VersionId=DmmnfsZPucA048vK90CH_5mhMHCj04vz\",\"alt\":\"Linked vs Non- linked insurance plans\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-12T09:59:52\",\"updated_on\":\"2024-12-12T09:59:56\",\"read_more_title\":\"Know More\",\"slug\":\"/difference-between-linked-and-non-linked-insurance-plans\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>When one has to choose a life insurance plan, the variety and options available across different types of life insurance plans, can pose a challenge. The information one needs to process to make this decision can seem difficult, affecting one’s ability to choose the right policy. If you’re buying your first life insurance policy, you will come across Linked and non-linked insurance plans. These are the most common types of insurance policies. We aim to explain what these plans are and how they differ from one another, so that you can select the right life insurance plan.\u003C/p>\u003Ch2>\u003Cstrong>What is a Non-Linked Insurance Policy?\u003C/strong>\u003C/h2>\u003Cp>It is a traditional life insurance Plan designed to provide a stable and assured financial safety net through life coverage and guaranteed benefits. Unlike linked insurance plans, the returns of Non-Linked Insurance Plans aren’t tied to market performance. If your risk tolerance is low and you want fixed returns on maturity, then Non-Linked Insurance Plans are better suited to your profile.\u003C/p>\u003Cp>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">While most non-linked insurance plans (traditional plans) such as \u003C/span>\u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Shriram Life Assured Income Plan\u003C/span>\u003C/a>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">, \u003C/span>\u003Ca href=\\\"https://www.shriramlife.com/life-insurance/early-cash-plan\\\" target=\\\"_blank\\\">\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Shriram Life Early Cash Plan\u003C/span>\u003C/a>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\"> etc., provide fixed returns, those clubbed with Endowment Plans guarantee additional value. Term Plan such as \u003C/span>\u003Ca href=\\\"https://www.shriramlife.com/life-insurance/smart-protection-plan\\\" target=\\\"_blank\\\">\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Shriram Life Smart Protection Plan\u003C/span>\u003C/a>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\"> is also a popular Non-Linked Plan, but it only provides life cover to the family in the unfortunate event of the policyholder’s death during the policy term.\u003C/span>\u003C/p>\u003Ch2>\u003Cstrong>Advantages of Non-Linked Insurance Policy\u003C/strong>\u003C/h2>\u003Cp>The following \u003Ca href=\\\"https://www.shriramlife.com/blog/golden-premier-saver-plan/comprehensive-benefits-of-non-linked-participating-insurance-plans\\\" target=\\\"_blank\\\">benefits of non-linked insurance plans\u003C/a> make them the ideal choice for conservative investors:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Guaranteed Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>One of the biggest differences between linked and non-linked plans is assured returns. Unlike linked insurance plans, Non-Linked Plans provide a guaranteed return on maturity, regardless of the market condition.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Policyholders can claim tax deductions equivalent to the premium paid in a particular financial year u/s 80 C. However, the maximum deductions are capped at ₹1.50 lakh/annum. The maturity proceeds from such plans are tax-free u/s 10 (10D) if the premium payment for any year doesn’t exceed 10% of the sum assured value.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Low Risk\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you evaluate linked vs. non-linked insurance plans regarding risk factors, non-linked plans emerge as the winner for individuals with a lower risk tolerance. Since market volatility doesn’t affect Non-Linked Policy returns, they appear as a safe plan for people who value stability.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Long-term Wealth Creation\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Most non-linked insurance plans have a long tenure, so they encourage disciplined saving over time. They help people build a substantial fund for future needs, securing their life financially. You can amplify your long-term wealth creation goals by pairing Non-Linked Plans with other Retirement Plans and Savings Plans that complement your financial goals.\u003C/p>\u003Ch2>\u003Cstrong>What is a Linked Insurance Policy?\u003C/strong>\u003C/h2>\u003Cp>A linked insurance policy blends investment and insurance aspects in a single financial product. Unit Linked Insurance Plans (ULIP) are the most common type of linked insurance plans. When you invest in such plans, a part of the premium goes toward life coverage while the balance is invested in market-linked funds.\u003C/p>\u003Cp>Since the premium is invested in market securities, policyholders may earn higher returns. These plans are recommended for risk-tolerant individuals who can handle market volatility. You can check our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/wealth-pro\\\" target=\\\"_blank\\\">Shriram Life Wealth Pro plan\u003C/a>, as this Unit-Linked Policy provides the best of investment and protection in a single plan.\u003C/p>\u003Ch2>\u003Cstrong>Advantages of a Linked Insurance Policy\u003C/strong>\u003C/h2>\u003Cp>The following advantages of linked insurance plans make them an ideal choice for risk-tolerant individuals.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Growth Potential\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>It is among the best life insurance Investment options that allows your money to grow based on the performance of your chosen funds. Instead of receiving a fixed amount, you have a higher potential to earn great returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Fund Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>What makes linked plans more advantageous in the linked vs. non-linked life insurance comparison is its flexibility. Policyholders can choose between debt, equity, or balanced funds to align the investment with their risk appetite and financial goals. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Transparency\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Unlike non-linked plans, ULIP policyholders receive detailed reports on fund performance and related charges. It helps them understand and track their investment and potential returns for clarity and convenience.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Payments made toward insurance premiums are eligible for tax deductions u/s 80 C, up to a maximum of ₹1.50 lakh/annum. Maturity proceeds received on ULIP plans will be tax-free u/s 10 (10D) if the aggregate annual premium payment doesn’t exceed ₹2.50 lakh. However, maturity proceeds received by the nominee in the event of a policyholder’s death will be entirely tax-free.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Switching Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Some ULIPs provide free fund switches within a specific limit, so you can adjust your portfolio in response to changing market conditions or personal shifts in financial goals. \u003C/p>\u003Ch2>\u003Cstrong>How do Linked Insurance Plans Differ from Non-Linked Insurance Plans?\u003C/strong>\u003C/h2>\u003Cp>You can effortlessly choose the right insurance plan if you clearly understand the difference between linked and non-linked plans. The following table will give you a better picture of the linked vs. non-linked life insurance plans:\u003C/p>\u003Ctable>\u003Ctbody>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Basis of Differentiation\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Linked Insurance Plans\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Non-Linked Insurance Plans\u003C/strong>\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Market Association\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Linked plans are affected by market volatility because a portion of the premium is invested in market securities\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Non-linked plans aren’t affected by market volatility\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Returns\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Policyholders don’t receive a fixed amount on maturity because the returns are determined by market performance\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Policyholders receive a fixed amount on maturity because these plans aren’t affected by market performance\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Investment Flexibility\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Policyholders can invest in debt, equity, or balanced funds depending on their financial goals, risk appetite, etc.\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Policyholders don’t have any control because the insurer decides where to invest\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Risk\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">The risk profile is medium to high, depending on your choice of funds and policy\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">The risk profile is relatively low\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Switching Funds\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Policyholders can switch funds if their existing funds aren’t performing well\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">This facility isn’t available to policyholders\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Partial Withdrawal\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">10% of the premiums can be partially withdrawn to support emergency financial needs. The withdrawal limit and terms can vary from one insurer and plan to another.\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Partial withdrawal isn’t typically allowed, but some insurers may allow you to withdraw a certain amount. \u003C/span>\u003C/td>\u003C/tr>\u003C/tbody>\u003C/table>\u003Ch2>\u003Cstrong>Which Insurance Policy is best for Your Investment Planning?\u003C/strong>\u003C/h2>\u003Cp>You must always choose your life insurance investment options based on your financial objectives, risk tolerance, and budget because not all plans are designed the same. Non-linked insurance plans will be a better choice if you want a stable return without market risk. Conversely, linked insurance plans are recommended if you are comfortable with market-linked fluctuations and want to take advantage of the high growth potential.\u003C/p>\u003Cp>Since both types of life insurance Plans have pros and cons, understand the policy clearly before investing. Learn how linked and non-linked plans work before making a decision. Consult a financial planner for personalized guidance if you’re still confused or overwhelmed by the options.\u003C/p>\u003Ch2>\u003Cstrong>Get the Best Life Insurance Coverage with Shriram Life Insurance\u003C/strong>\u003C/h2>\u003Cp>Life is unpredictable, and one of the most responsible aspects of financial planning is enabling that the policyholder’s family is taken care of financially, in the event of the insured’s unfortunate demise. This is where life insurance plans play a role in providing security and peace of mind. We recommend that an individual could explore the different types of life insurance Plans and invest in the right plans to secure their future. You can also explore our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/protection-plan\\\" target=\\\"_blank\\\">Protection Plans\u003C/a> to find the ideal financial product to suit your requirements.\u003C/p>\u003Cp>Shriram Life Insurance provides various insurance plans designed to achieve varying financial goals, each with varying features and benefits. You must check our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/family-protection-plan\\\" target=\\\"_blank\\\">Shriram Life Family Protection Plan\u003C/a> if you want to secure your family’s financial future in case of your untimely demise. Our Shriram Life Early Cash Plan is a better option if you want to grow your wealth over a period while enjoying insurance coverage.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"Guide to Avail Loan Against Your Life Insurance Policy\",\"heading\":\"Loan Against Your Life Insurance Policy – Things to Know\",\"short_description\":\"\u003Cp>It is common for individuals to save money to meet short-term and long-term expenses.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/Loan%20Against%20insurance%20policy_1.jpg?VersionId=LcGCJcDQPEkAaU_fRvd92zrnJCgmBxYV\",\"alt\":\"Loan Against Your Life Insurance Policy\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-11T12:13:45\",\"updated_on\":\"2024-12-11T12:13:49\",\"read_more_title\":\"Know More\",\"slug\":\"/guide-to-avail-loan-against-your-life-insurance-policy\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>\",\"description\":\"\u003Cp>It is common for individuals to save money to meet short-term and long-term expenses. However, it is often the big expenses that come unexpected or suddenly such as medical bills, marriage expenses, higher education fees, property purchase/renovation, etc., that disrupt one’s financial condition. In such cases, people often fall short of the required funds and turn to financial institutions or others for loans. While people with a good credit score and assets can easily get loan approvals, others may not. In any case, becoming debt-ridden during such times is not financially prudent and one can save and plan ahead to avoid such a situation.\u003C/p>\u003Cp>If you don’t have assets like gold, properties, etc., to use as collateral but need funds to meet sudden expenses, you can use your life Insurance Policies to get secured loans. In this blog, we explain more about getting a loan against life Insurance policy so you can fulfil all your needs without stress and pressure.\u003C/p>\u003Ch2>\u003Cstrong>What is Loan against Policy?\u003C/strong>\u003C/h2>\u003Cp>As the term suggests, it refers to obtaining a loan against an existing life insurance policy. You use your insurance policy as collateral when you take such loans. Unlike personal loans, life insurance Loans are secured and give security to the lender. Hence, the loan on life insurance Policy typically has a lower interest rate than most personal loans.\u003C/p>\u003Cp>The loan amount depends significantly on the policy’s surrender value, premiums paid to date, policy type, and the eligibility of the policy. It is the best option to secure funds if you don’t have any \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/savings-plan\\\" target=\\\"_blank\\\">Savings Plans\u003C/a> to meet unexpected expenses. So, if you’re wondering, ‘Can I take a loan on my life insurance,’ we recommend checking your policy’s eligibility and the shortlisted lender’s terms and conditions for life insurance Loans.\u003C/p>\u003Ch2>\u003Cstrong>How to Get a Loan from a Life Insurance Policy?\u003C/strong>\u003C/h2>\u003Cp>Not all life insurance Policies are eligible for securing a loan, so start by determining your policy’s eligibility status. You can assess the policy type and check whether your insurance provider or other financial institutions offer loans against the particular policies. For eligible policies, you can contact our team on our toll-free number (1800-103-6116) to get step-wise guidance on how to avail a loan against your existing policy. You can also visit one of our branches for assistance. Use our ‘\u003Ca href=\\\"https://www.shriramlife.com/contact-us/branches\\\" target=\\\"_blank\\\">branch locator\u003C/a>’ to find a branch near you. \u003C/p>\u003Cp>The precise application steps may vary from one lender to another, so we recommend checking the particular lender/insurer’s website for accurate step-wise application details. You can also contact the lender’s online customer support executives for more details on how to take a loan from life insurance.\u003C/p>\u003Ch2>\u003Cstrong>Which Insurance Policies Are Eligible for a Loan?\u003C/strong>\u003C/h2>\u003Cp>Endowment Policies, Money-Back Policies, and Whole Life Policies are generally eligible for securing a personal loan against life insurance. If you’re covered under a group health insurance policy, Unit-Linked Insurance Plans (ULIPs), and term insurance plans, then you may not get loans against them. Some insurers may provide insurance against ULIPs, but not all will. Read your policy’s terms and conditions thoroughly and talk to potential lenders/insurers executives to determine whether you can get a loan on life insurance policy. You can assess your \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">Retirement Plans\u003C/a> to find existing policies eligible for loans. \u003C/p>\u003Ch2>\u003Cstrong>Some Important Points for Loan against Insurance\u003C/strong>\u003C/h2>\u003Cp>If you often ask yourself, ‘Can I take a loan on my life insurance?’ The answer is yes. It is a straightforward process, but you must consider the following points before taking out a Loan against life insurance Policy.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Rate of Interest\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The rate of interest varies from one lender to another, but it is comparatively lower than personal loan interest rates. Unless specified in the loan documents, the interest rate remains fixed throughout the loan tenure. We recommend reading the loan’s full terms and conditions for clarity.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Repayment\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Loan on life insurance Policy offers flexible payment terms, but it also attracts severe repercussions on failed payments. The repayment tenure for such loans is generally six months, but it can sometimes be extended until the policy tenure. Individuals can repay the loan in fixed EMIs or as a lump sum at the end of the loan term. Some even pay the interest and get the principal deducted from the policy’s maturity value. You can talk to the lender and choose a loan repayment method that works best for you.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Loan Amount\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Most lenders offer loans up to 80%-90% of the policy’s surrender value, so calculate the loan amount accordingly before applying for any life insurance loans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Impact on Policy Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The outstanding loan amount and the accumulated interest will be deducted from the maturity proceeds, lowering your policy returns and safety net. You can prevent it by making timely repayments. \u003C/p>\u003Ch2>\u003Cstrong>What are the Documents Required to Avail Loan against Insurance?\u003C/strong>\u003C/h2>\u003Cp>If your policy qualifies for securing Life Insurance loans, then you will need the following documents for a smooth loan application process:\u003C/p>\u003Cul>\u003Cli>Life insurance policy document\u003C/li>\u003Cli>Duly filled loan application form\u003C/li>\u003Cli>Identity proof (Driver’s license/passport/PAN card/Aadhar card, etc.)\u003C/li>\u003Cli>Address proof (utility bill/rental agreement, etc.) \u003C/li>\u003Cli>Passport-size photographs\u003C/li>\u003Cli>Assignment of the policy document\u003C/li>\u003Cli>Proof of premium payment\u003C/li>\u003Cli>Bank statement\u003C/li>\u003Cli>Income proof\u003C/li>\u003Cli>Loan agreement\u003C/li>\u003C/ul>\u003Cp>Some lenders may require additional documents. \u003C/p>\u003Ch2>\u003Cstrong>The Benefits and Concerns of an Insurance Policy Loan\u003C/strong>\u003C/h2>\u003Cp>Many individuals have a basic understanding of what is policy loan in life insurance, yet they don’t have a clear picture. The following benefits and concerns will strengthen the awareness of loans against insurance policies so anyone can proceed with confidence.\u003C/p>\u003Ch3>\u003Cstrong>Benefits of an Insurance Policy Loan\u003C/strong>\u003C/h3>\u003Cul>\u003Cli>\u003Ch4>Lower Interest Rate\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>The interest rates on loans against insurance policies vary from one lender to another, but they are comparatively lower than those on most traditional, unsecured bank loans. \u003C/p>\u003Cul>\u003Cli>\u003Ch4>Less Scrutiny\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Since you’re applying for a loan by placing your insurance as collateral, there is less scrutiny involved in the application and approval process.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Faster Disbursement\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Unlike personal loans, the loan disbursal is faster for life insurance Loans. You may receive the loan amount within a few days of approval.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Higher Approval Chances\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Applying for a loan to your existing insurer has minimal chances of rejection, especially if you’ve never defaulted on your premium payments for three consecutive years.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Flexible Repayment Structures\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Getting a loan on life insurance Policy is desirable because it doesn’t have rigid repayment structures. You can choose to pay only the interest during the loan tenure and have the principal deducted from the maturity value. \u003C/p>\u003Ch2>\u003Cstrong>Concerns of an Insurance Policy Loan\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch4>Impact on Policy Benefits\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>If you take a personal loan against life insurance, you may receive a lower maturity value, especially if you default on repayment. This can affect your financial planning and status.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Interest Accumulation\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Failure to repay timely interest can result in hefty interest accumulation. If the interest combined with the principal exceeds the policy’s cash value, the insurer may terminate your policy, stripping you of your coverage benefits.\u003C/p>\u003Ch2>\u003Cstrong>Personal Loan and Life Insurance Policy\u003C/strong>\u003C/h2>\u003Cp>If you’re struggling to choose between a personal loan and a loan against life insurance policy, we recommend understanding the difference between both to make an informed choice.\u003C/p>\u003Ctable>\u003Ctbody>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Basis of Differentiation\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Personal Loan\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Loan Against Life Insurance Policy\u003C/strong>\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Interest Rate\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Higher\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Lower\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Credit Check\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Mandatory\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Not required\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Processing Time\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Longer\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Faster\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Collateral\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Needed\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Not needed\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Documentation\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Extensive\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Minimal\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Repayment Terms\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Rigid\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Flexible\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Chances of Rejection\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Higher\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Lower\u003C/span>\u003C/td>\u003C/tr>\u003C/tbody>\u003C/table>\u003Cp>In a nutshell, obtaining a loan on life insurance policy is a more practical, hassle-free, and faster route to getting funds. Individuals with no assets for collateral can easily secure loans against eligible insurance policies.\u003C/p>\u003Ch2>\u003Cstrong>What Happens if You Fail to Repay?\u003C/strong>\u003C/h2>\u003Cp>Failed repayments will lead to increasing accrued interest over time, significantly reducing the maturity proceeds. If a person dies before repaying the loan and interest amount, the insurer reserves the right to deduct it from the policy’s maturity value before disbursing the balance. The insurer can also terminate the policy if the borrowed loan with interest exceeds the policy’s cash value to recover the dues.\u003C/p>\u003Ch3>\u003Cstrong>Get Easier Access to Insurance Loans from Shriram Life Insurance\u003C/strong>\u003C/h3>\u003Cp>Regardless of their financial planning, anyone may need urgent funds to meet unexpectedly large expenses. In such cases, obtaining a low-interest loan can be the best option. We recommend taking a loan against life insurance policy because it is fast, secure, and comes with flexible repayment terms. Many of the Shriram Life Insurance policies are eligible for securing a loan, like \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/new-shri-vidya-plan\\\" target=\\\"_blank\\\">Shriram Life New Shri Vidya\u003C/a>, \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-savings-plan\\\" target=\\\"_blank\\\">Shriram Life Assured Savings Plan\u003C/a>, etc. So, you can consider buying a policy from Shriram Life Insurance for enjoying multiple benefits, like systematic saving, wealth creation, financial security, collateral-free loan, and more. Since every plan has different features, coverage, and benefits, explore relevant plans and invest in the ones that align with your financial goals.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"Best Child Plan for Education and Marriage\",\"heading\":\"Best Child Plan for Education and Marriage\",\"short_description\":\"\u003Cp>Every parent aims to secure their child’s future.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/63.%20Best%20Child%20Plan%20for%20Education%20and%20Marriage_0.png?VersionId=LhtipHzByCAZXFc5fQxrCHv79CfTUuEw\",\"alt\":\"Best child education for Marriage\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-10T05:38:00\",\"updated_on\":\"2024-12-10T05:38:07\",\"read_more_title\":\"Know More\",\"slug\":\"/best-child-plan-for-education-and-marriage\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/child-plan\\\" hreflang=\\\"en\\\">Child\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>\",\"description\":\"\u003Cp>Every parent aims to secure their child’s future. Whether arranging funds for higher education or creating a sizable fund for hosting a grand wedding festivity for your child, the goal can differ for different parents. However, the process to achieve these financial goals remains relatively similar for most – investing in a Child Investment Plan. These financial products feature the dual benefits of investment and saving, providing two-pronged financial security. In this article, we explain how investment in Child Plans helps parents accumulate wealth for their children’s education and marriage needs through systematic savings. \u003C/p>\u003Ch2>\u003Cstrong>How Can Child Plans Help With Education?\u003C/strong>\u003C/h2>\u003Cp>Parents should consider investing in a Child Plan because it will support their child’s future educational needs in the following ways:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Wealth Creation for Future Education\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>When you begin investing in the best child plan for education such as \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">Shriram Life Assured Income Plan\u003C/a>, you follow a disciplined, long-term saving approach to build a large fund for your child’s higher educational requirements. It ensures you regular set aside a fixed amount that can later be used for your child’s higher educational expenses.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Death Benefit\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Since the ideal plans have an insurance component, they ensure your child’s education doesn’t stop in the unfortunate event of the policyholder’s (parent) death. If you want to secure your child’s future, invest in plans with a built-in premium waiver feature.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Payout Structures\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>When you’re planning your child’s future, estimate timelines and approximate amounts you will need to support your child’s higher education. It will help you identify a plan whose payout aligns with your estimated education timeline. For example, you can purchase the \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/new-shri-vidya-plan\\\" target=\\\"_blank\\\">Shriram Life New Shri Vidya plan\u003C/a>, which provides money-back benefits in the last four years of the policy. This flexible payout can be used to pay school fees, tuition fees, or other education expenses during that period.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Securing Collateral-free Loan\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If your child’s education plan changes over time and you need immediate funds to support those changes, you can use the existing best Child Plan For Education as collateral to secure a loan. You can typically get loans up to 80% of the policy’s surrender value, but this limit can differ from one insurer to another.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Enhanced Maturity Amount\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Some plans provide reversionary bonuses that get added to the maturity amount, increasing the educational fund. In case of a policyholder’s (parent) death, some nominees may also receive a terminal bonus, which enhances the maturity proceeds. We recommend exploring practical tips to select the best Child Education Plan for optimal returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Benefits of Investing in Child Plans\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Parents who want to secure their child’s future by systematically investing to aid their education & marriage funding must choose the right child plan. It has the following benefits:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Financial Safety Net\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Child plans are becoming popular because they provide two-pronged financial security. They help parents stick to systematic, routine savings to build a large enough fund to support their child’s major life goals, including education and marriage, without disrupting their retirement savings.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Insurance and Investment Combination\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Market provides numerous child plans with unique investment and insurance benefits for optimal returns. The right plan will help you accumulate and grow your investment while providing insurance and savings benefits to your child.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Parents should consider investing in a Child Plan because it provides short-term and long-term tax benefits while securing their child’s future. For instance, the premiums paid toward child plans can be deducted u/s 80 C in ITR, up to a maximum of ₹1.50 lakh.\u003C/p>\u003Cp>Maturity proceeds are typically tax-free u/s 10 (10D) if the premium payment does not exceed 10% of the policy’s sum assured value or ₹2.50 lakh in any year during the policy tenure. Starting April 2023, this limit has been set to ₹5 lakh for non-linked plans. Death benefits are fully tax-exempt.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Money Growth\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Policyholders investing early can enjoy the power of compounding, resulting in higher returns on maturity. If investing in ULIPs, you can pick the right financial securities for potentially higher returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Additional Coverage through Riders\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The top plans designed to support education & marriage funding provide numerous riders to strengthen the policy coverage and benefits. For example, besides standard coverage, you can also invest in Critical Illness Coverage, Accidental Death Benefit Cover, etc. Not all insurers provide the same riders for similar types of Child Plans, so always check the plan page on the website for accurate information.\u003C/p>\u003Ch2>\u003Cstrong>How Can Child Plans Help With a Child’s Marriage Goals?\u003C/strong>\u003C/h2>\u003Cp>Investing in the best Child Plan for marriage such as \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/early-cash-plan\\\" target=\\\"_blank\\\">Shriram Life Early Cash Plan\u003C/a> can help you fulfil your financial obligations during your child’s marriage in the following ways:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Long-Term Wealth Creation\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Child Plans typically have a long policy tenure of 15-20 years, which is ideal for building a substantial fund for the child’s marriage. The power of compounding over this extended period amplifies the wealth creation process, so you don’t fall short of the expected marriage expenses. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Protection Against Market Volatility\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Many Child Plans are market-linked, so that policyholders can invest a portion of their premiums in select financial securities, such as debt instruments, equity, or a mix of both, for potentially higher returns. Equity-linked returns are risky but they can grow at a rate much higher than the inflation rate, resulting in larger returns to support marriage expenses. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Maturity Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The best Child Plan for marriage always provides flexible maturity options, so the policy matures during the expected marriage timeframe. For convenience, policyholders can extend the policy tenure by a few years if their child doesn’t plan to marry during that period. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Liquidity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Not all Child Investment Plans follow rigid payout, like lumpsum payment on policy maturity. Some plans also feature systematic withdrawal options so you can manage unexpected medical expenses or major property renovation without undue financial strain. \u003C/p>\u003Ch2>\u003Cstrong>How to Choose the Best Child Plan?\u003C/strong>\u003C/h2>\u003Cp>Your child’s future planning will remain incomplete if you don’t pick the right plan aligned with your specific financial goals. If you’re overwhelmed with the range of plans available, use the following tips to choose the right child plan to support education & marriage funding.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Start with a Clear Goal Assessment\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Every parent must calculate the estimated cost of education and marriage expenses, considering the growing inflation. Once done, look for plans with a sum assured and investment component that aligns with these calculated expenses.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Understand Policy Features\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Not every plan is designed the same, so parents must check and understand the plan-specific features to make an informed decision. The policy’s tenure, maturity benefits, lock-in period, inclusions & exclusions, and riders must also be evaluated. Always shortlist at least two to three similar plans and compare them critically to make the right choice. The same rule must be followed by choosing Protection Plans and other Savings Plans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Check Premium Waiver and Other Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The best Child Plan for education and marriage will provide a premium waiver as an in-built or additional feature so the child (nominee) can receive full policy benefits in the event of the policyholder’s (parent) death. Look for similar benefits to secure your child’s future fully, even when things don’t go as planned.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Compare Fund Growth and Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you have a moderate to high-risk appetite and want to benefit from the market’s potential for greater returns, ULIPs will be a better choice. You can compare the shortlisted plans by analyzing their growth potential. Risk-averse parents must stick to traditional, non-linked plans for assured and risk-free returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Consider Tax Implications\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Verify the plan’s tax implications to strategize investment and withdrawals for optimal tax savings. Check the latest guidelines u/s 80 C and 10 (10D) for proper planning. We recommend consulting with a professional finance planner for personalized guidance. \u003C/p>\u003Ch2>\u003Cstrong>Build a Substantial Education and Marriage Fund with Shriram Life Insurance \u003C/strong>\u003C/h2>\u003Cp>Whether you have a high-income job or multiple earning family members, it shouldn’t be used as an excuse not to invest in a child plan. Life is uncertain and the market conditions are unpredictable. Hence, investing in the best Child Plan for marriage and education will ensure your child’s future is secure, even when unfortunate or unexpected events occur. It will not only secure the child’s future, but also give you peace of mind and a sense of control, resulting in improved life quality. \u003C/p>\u003Cp>You can \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/child-plan\\\" target=\\\"_blank\\\">explore the various child plans at Shriram Life Insurance\u003C/a>, like Shriram Life Assured Income Plan and Shriram Life Early Cash Plan because they provide several benefits: assured income, additional protection through riders, potentially higher returns, flexible payment terms, and more. If you’re exclusively looking for plans to support your child’s education, then our Shriram Life New Shri Vidya Plan will be a better choice.\u003C/p>\",\"category\":\"/blog/advice\"}],\"blog_count\":[{\"count\":122,\"counts\":122}],\"nothing\":\"all\",\"nothing_1\":317}]","http://127.0.0.1:4000/api/v1/tagged-blogs/317/all":"[{\"category\":[{\"id\":1781,\"name\":\"Super Income Plan\"},{\"id\":1782,\"name\":\"Advice\"},{\"id\":1930,\"name\":\"Child Plan\"},{\"id\":1979,\"name\":\"Early Cash Plan\"},{\"id\":1982,\"name\":\"Assured Income Plan\"},{\"id\":1984,\"name\":\"Golden Premier Saver Plan\"},{\"id\":1985,\"name\":\"Premier Assured Benefit\"}],\"blogs\":[{\"title\":\"One plan Many benefits: How Super Income plan is the right at any age\",\"heading\":\"One plan Many benefits: How Super Income plan is the right at any age\",\"short_description\":\"\u003Cp>In an era marked by economic volatility and changing demographics, the need for stable financial planning has never been more critical.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/12-6%20Things%20to%20Know%20Before%20Getting%20Shriram%20Life%20Super%20Income%20Plan_0.jpg?VersionId=3Nvr475rPtJv4eEGMULNzS9Nz2iFGKKW\",\"alt\":\"One life insurance plan for many benefits\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-20T11:00:29\",\"updated_on\":\"2024-12-20T11:00:37\",\"read_more_title\":\"Know More\",\"slug\":\"/one-plan-many-benefits-how-super-income-plan-is-the-right-at-any-age\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>In an era marked by economic volatility and changing demographics, the need for stable financial planning has never been more critical. The Super Income Plan emerges as a beacon of financial security, offering a unique blend of income generation and insurance protection. Whether you're a young professional embarking on your career, a mid-career individual navigating family responsibilities, or a retiree seeking to preserve and grow your wealth, this plan caters to diverse financial aspirations with its comprehensive suite of benefits.\u003C/p>\u003Cp>At its core, the Super Income Plan represents a strategic investment in your future, ensuring a steady income stream while safeguarding against unforeseen circumstances. By exploring its multifaceted advantages—from guaranteed income streams and tax benefits to flexible payout options and inflation protection—you'll discover why this plan is not merely a choice, but a cornerstone in securing financial stability across different life stages. Join us as we delve deeper into the myriad benefits of Super Income Plan and uncover how it can empower you to achieve financial freedom and peace of mind, today and for years to come.\u003C/p>\u003Ch2>\u003Cstrong>Understanding the Super Income Plan\u003C/strong>\u003C/h2>\u003Cp>The Super Income Plan is designed to provide a dual benefit of insurance coverage and regular income. It combines elements of investment and protection, making it a comprehensive financial tool for individuals looking to secure their future. This plan typically involves paying premiums for a specified period, after which it offers regular payouts throughout the policyholder's lifetime or for a predetermined duration.\u003C/p>\u003Ch2>\u003Cstrong>Benefits of the Shriram Life Super Income Plan\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>1. Guaranteed Income Stream:\u003C/strong>\u003C/h3>\u003Cp>One of the standout features of plans such as the Shriram Life Super Income Plan is its ability to provide a guaranteed income stream. This steady flow of income ensures financial stability, making it ideal for retirees or those nearing retirement who need predictable cash flows to cover living expenses.\u003C/p>\u003Ch3>\u003Cstrong>2. Financial Security and Protection:\u003C/strong>\u003C/h3>\u003Cp>Beyond income generation, the plan offers financial security through insurance coverage. It provides a lump sum benefit to the nominee in case of the policyholder's unfortunate demise, thereby ensuring that loved ones are protected financially.\u003C/p>\u003Ch3>\u003Cstrong>3. Flexibility in Payout Options:\u003C/strong>\u003C/h3>\u003Cp>The benefits of Super Income Plans extend to flexibility, allowing policyholders to choose from various payout options. They can opt for regular monthly, quarterly, or annual payments, depending on their financial needs and preferences. This flexibility makes it adaptable to changing life circumstances and financial goals.\u003C/p>\u003Ch3>\u003Cstrong>4. Tax Benefits of Super Income Plan:\u003C/strong>\u003C/h3>\u003Cp>Investing in a Super Income Plan can also offer tax advantages. Premiums paid towards the plan are often eligible for tax deductions under prevailing tax laws, providing additional savings and reducing the overall tax liability.\u003C/p>\u003Ch3>\u003Cstrong>5. Long-term Wealth Accumulation:\u003C/strong>\u003C/h3>\u003Cp>Besides providing immediate income, the plan also serves as a tool for long-term wealth accumulation. The invested premiums grow over time, potentially generating higher returns compared to traditional savings accounts or fixed deposits.\u003C/p>\u003Ch3>\u003Cstrong>6. Inflation Protection:\u003C/strong>\u003C/h3>\u003Cp>Accounting for inflation by offering indexed benefits of super income plan, the policy assures of periodic increases in payouts. This feature ensures that the purchasing power of the income remains intact over the years, safeguarding against the impact of rising living costs.\u003C/p>\u003Ch2>\u003Cstrong>Super Income Plan - Right at Any Age\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>For Young Professionals:\u003C/strong>\u003C/h3>\u003Cp>Young professionals can benefit from starting a Super Income Plan early in their careers. By leveraging the power of compounding, they can build a substantial corpus over time while securing insurance coverage. The plan offers them the flexibility to adjust payouts as their income needs evolve, providing a solid foundation for future financial goals.\u003C/p>\u003Ch3>\u003Cstrong>For Mid-career Individuals:\u003C/strong>\u003C/h3>\u003Cp>Mid-career individuals often face increased responsibilities and financial commitments. A Super Income Plan offers them peace of mind by ensuring a steady income post-retirement. It serves as a prudent addition to their investment portfolio, balancing risk with reliable returns.\u003C/p>\u003Ch3>\u003Cstrong>For Pre-retirees and Retirees:\u003C/strong>\u003C/h3>\u003Cp>Pre-retirees and retirees can derive immense benefit from the guaranteed income feature of the Super Income Plan. It serves as a reliable source of income during retirement years, supplementing pensions or through \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/savings-plan\\\" target=\\\"_blank\\\">savings\u003C/a> and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">retirement plans\u003C/a>. The plan's flexibility in payout options allows them to tailor payments according to their lifestyle and financial obligations.\u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>Plans such as the Shriram Life Super Income Plan exemplifies the synergy between financial security and wealth accumulation. Its dual benefits of guaranteed income and insurance coverage make it a compelling choice for individuals at any stage of life. Whether you're planning for retirement, \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/family-protection-plan\\\" target=\\\"_blank\\\">safeguarding your family's future\u003C/a>, or seeking to build long-term wealth, this versatile plan offers a robust solution. By incorporating a Super Income Plan into your financial strategy, you can navigate uncertainties with confidence and enjoy a secure financial future.\u003C/p>\u003Cp>In essence, the Shriram Life Super Income Plan isn't just a plan- it's a pathway to financial resilience and peace of mind, ensuring that your hard-earned savings work for you efficiently throughout your life journey. Embrace the benefits of Super Income Plan today and pave the way for a prosperous tomorrow, regardless of your age or financial goals.\u003C/p>\",\"category\":\"/blog/super-income-plan\"},{\"title\":\"Tax savings for salaried income: Super Income Plan benefits\",\"heading\":\"Tax savings for salaried income: Super Income Plan benefits\",\"short_description\":\"\u003Cp>Effectively managing personal finances requires a strategic approach to both preparing for future financial needs and minimizing tax liabilities.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/6.%20Tax%20savings%20for%20salaried%20income_%20Super%20Income%20Plan%20benefits_0.jpg?VersionId=G37GPJ6ObJk6pNdF1dmQAs0r1Iyv6hNv\",\"alt\":\"Tax benefits of insurance plan\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-19T10:26:53\",\"updated_on\":\"2024-12-19T10:27:00\",\"read_more_title\":\"Know More\",\"slug\":\"/tax-savings-for-salaried-income-super-income-plan-benefits\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>, \u003Ca href=\\\"/blog/guides/retirement\\\" hreflang=\\\"en\\\">Retirement\u003C/a>, \u003Ca href=\\\"/blog/guides/savings\\\" hreflang=\\\"en\\\">Savings\u003C/a>\",\"description\":\"\u003Cp>Effectively managing personal finances requires a strategic approach to both preparing for future financial needs and minimizing tax liabilities. Salaried individuals often find themselves navigating these dual objectives to ensure long-term financial security. The Shriram Life Super Income Plan presents itself as an ideal solution tailored to address these challenges comprehensively. As a non-linked, non-participating individual savings life insurance plan such as \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">Assured Income Plan\u003C/a>, it not only provides robust insurance coverage but also serves as a vehicle for wealth accumulation. This blog explores the nuances of the Shriram Life Super Income Plan, highlighting its flexible premium payment terms, guaranteed income benefits, and the substantial tax benefits of savings plans available under Section 80C of the Income Tax Act, 1961. By gaining a deeper understanding of these features, salaried individuals can strategically enhance their financial stability while optimizing their tax planning strategies with confidence.\u003C/p>\u003Ch2>\u003Cstrong>Understanding Shriram Life Super Income Plan\u003C/strong>\u003C/h2>\u003Cp>The Shriram Life Super Income Plan is a non-linked, non-participating individual savings life insurance plan. It serves dual purposes of providing life insurance coverage and generating wealth through regular payouts.\u003C/p>\u003Cp>Here’s a breakdown of its key features:\u003C/p>\u003Ch3>\u003Cstrong>1. Multiple Premium Payment Terms\u003C/strong>\u003C/h3>\u003Cp>One of the standout features of the Shriram Life Super Income Plan is its flexibility in premium payment. Policyholders can choose to pay premiums yearly, half-yearly, quarterly, or even monthly, depending on their financial preferences and capabilities.\u003C/p>\u003Cp>This flexibility ensures that the plan can be tailored to fit individual financial planning needs.\u003C/p>\u003Ch3>\u003Cstrong>2. Assured Earnings\u003C/strong>\u003C/h3>\u003Cp>Throughout the term of the plan, policyholders are assured of receiving benefits that act as a source of passive income. This predictable income stream can supplement other sources of income, providing stability and financial security to the insured and their dependents.\u003C/p>\u003Ch3>\u003Cstrong>3. Loans\u003C/strong>\u003C/h3>\u003Cp>An additional benefit of the plan is the option to avail loans against it. The loan amount is determined based on the surrender value of the policy at the time of loan application, offering liquidity and financial flexibility when needed.\u003C/p>\u003Ch2>\u003Cstrong>Benefits Overview\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>1. Death Benefits\u003C/strong>\u003C/h3>\u003Cp>In the unfortunate event of the insured’s demise, the Shriram Life Super Income Plan provides death benefits to the nominees or beneficiaries. The amount paid out is either the Death Sum Assured or the surrender benefit, whichever is higher, ensuring that loved ones are financially protected during challenging times.\u003C/p>\u003Ch3>\u003Cstrong>2. Maturity Benefits\u003C/strong>\u003C/h3>\u003Cp>If the insured survives till the end of the policy term, they receive the Guaranteed Maturity Sum Assured. This lump sum payment marks the conclusion of the policy term, providing a financial cushion for the policyholder’s future needs.\u003C/p>\u003Ch3>\u003Cstrong>3. Earning Benefits\u003C/strong>\u003C/h3>\u003Cp>A unique feature of the Shriram Life Super Income Plan is the Super Income Benefit. Starting from the end of the premium paying term and continuing until the policy term ends (or until demise, whichever comes earlier), policyholders receive monthly payouts. These payouts are calculated as a percentage of the annualized premium paid, offering a steady income stream that can support \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">retirement plan\u003C/a> or other financial goals.\u003C/p>\u003Ch3>\u003Cstrong>4. Flexibility in Premium Payments\u003C/strong>\u003C/h3>\u003Cp>The plan allows policyholders to choose from multiple premium payment terms, including yearly, half-yearly, quarterly, or monthly options. This flexibility accommodates varying financial capacities and ensures that individuals can adjust their contributions according to their income streams and financial goals.\u003C/p>\u003Ch3>\u003Cstrong>5. Loan Facility\u003C/strong>\u003C/h3>\u003Cp>Beyond its insurance and income benefits, the plan also offers the option to avail loans against the policy. This feature provides liquidity during emergencies or for planned expenditures, leveraging the policy’s surrender value as collateral and avoiding the need to liquidate investments prematurely.\u003C/p>\u003Ch3>\u003Cstrong>6. Additional Riders for Enhanced Coverage\u003C/strong>\u003C/h3>\u003Cp>Policyholders have the option to enhance their coverage with riders that cater to specific needs, such as critical illness, accidental death, or disability. These riders provide additional financial protection, ensuring comprehensive coverage against unforeseen circumstances that may impact the policyholder's financial stability.\u003C/p>\u003Ch2>\u003Cstrong>Tax Benefits Of Savings Plan\u003C/strong>\u003C/h2>\u003Cp>Beyond the comprehensive insurance coverage and income benefits, premiums paid under the Shriram Life Super Income Plan qualify for tax benefits of a savings plan under Section 80C of the Income Tax Act, 1961. This provision allows policyholders to reduce their taxable income by up to ₹1.5 lakhs per financial year, making it an attractive option for salaried individuals looking to optimize their tax planning strategies.\u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>The Shriram Life Super Income Plan stands out as a comprehensive financial solution for salaried individuals seeking to secure their future while optimizing tax benefits of savings plan. With its flexible premium payment terms, guaranteed income benefits, and the option to avail loans, this plan caters to diverse financial needs. Moreover, the tax benefits under Section 80C add a significant advantage, allowing policyholders to reduce their taxable income while building a secure financial foundation.\u003C/p>\u003Cp>For those considering long-term financial planning and seeking reliable insurance coverage coupled with tax-efficient savings, the Shriram Life Super Income Plan offers a balanced approach. By integrating this plan into your financial portfolio, you not only safeguard your family’s future but also align with prudent tax-saving strategies. Remember, it’s advisable to consult with a financial advisor to tailor the plan according to your specific goals and ensure comprehensive coverage based on your unique circumstances. Start securing your future today with a plan that offers both protection and prosperity.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"Comprehensive Guide on Annuity in Life Insurance\",\"heading\":\"Comprehensive Guide on Annuity in Life Insurance\",\"short_description\":\"\u003Cp>Planning for retirement is important for everyone because it will ensure one can have a steady source of income after one’s working life is over an\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/44.%20Comprehensive%20Guide%20on%20Annuity%20in%20Life%20Insurance_0.jpg?VersionId=rcYECkgBeO.rILNSgFjBFyDII9Wo4Yfx\",\"alt\":\"Guide on Annuity in Life Insurance\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-18T07:35:41\",\"updated_on\":\"2024-12-18T07:35:47\",\"read_more_title\":\"Know More\",\"slug\":\"/comprehensive-guide-on-annuity-in-life-insurance\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>Planning for retirement is important for everyone because it will ensure one can have a steady source of income after one’s working life is over and regular income stops post-retirement. While the Indian market provides numerous financial products for retirement planning, annuity plans are often desirable. In this blog, we cover what is an annuity plan, its benefits, different types of annuity plans, etc., so you can make informed retirement planning decisions.\u003C/p>\u003Ch2>\u003Cstrong>What is Annuity in Life Insurance?\u003C/strong>\u003C/h2>\u003Cp>An annuity is a formal, legal contract between a policyholder and an insurer that requires the insurer to pay the policyholder immediately or later on specified dates, in exchange for a lump sum premium payment or regular smaller premium payments.\u003C/p>\u003Cp>Since annuities are designed to provide guaranteed payment on pre-agreed terms, they are considered the safest retirement planning tool for most Indians. There are different types of annuity in life insurance, each with unique features, positives, and drawbacks, so invest in plans that align with your long-term financial goals.\u003C/p>\u003Ch2>\u003Cstrong>How do Annuities Work?\u003C/strong>\u003C/h2>\u003Cp>An annuity plan is a risk-free retirement tool in which the insurance company agrees to pay a specific amount immediately after a lump sum premium payment or later in the future (mostly retirement years) against regular premium payments.\u003C/p>\u003Cp>If you plan to rely on annuity payments as the major post-retirement income source, estimate your approximate financial requirements during the retirement phase and invest accordingly. You can use an online annuity plan calculator to ease the process.\u003C/p>\u003Ch2>\u003Cstrong>Benefits of Annuity Plan\u003C/strong>\u003C/h2>\u003Cp>Now that you have a basic understanding of what is an annuity, let’s explore the various benefits attached to this plan.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Guaranteed Income\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Annuity plans are among the best \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">Retirement Plans\u003C/a> because they guarantee stable and predictable payments, bringing ease and comfort during retirement. However, the returns may fluctuate for unit-linked annuity plans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Lifetime Coverage\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you research ‘what is Annuity Insurance’ online and the different types of annuity insurance, you will come across some life annuities that provide lifetime income options. These plans ensure your expenses don’t outlive your savings till you’re alive.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The premiums you pay toward annuity plans are exempt from tax u/s 80 C, making them great tax-saving tools. Annuity earnings are covered by tax-deferred growth, meaning these earnings won’t attract tax until you start making withdrawals.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Risk-free Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Fixed annuities provide risk-free and predictable payments, irrespective of the market conditions. Fixed annuities are ideal if you have a low-risk profile and want to enjoy a steady, fixed income during retirement.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Payment Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Policyholders can choose to receive payments monthly, quarterly, or yearly, depending on their preference and financial obligation. It provides flexibility and ease in managing finances during golden years.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Potential for Higher Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Investing in unit-linked annuity plans, like \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/pension-plus\\\" target=\\\"_blank\\\">Shriram Life Pension Plus\u003C/a>, enables policyholders to build wealth over a period through market-linked gains.\u003C/p>\u003Ch2>\u003Cstrong>Different Types of Annuity Plans\u003C/strong>\u003C/h2>\u003Cp>The best way to understand what is annuity insurance is to get into the specifics of the product instead of stopping at the fundamentals. Currently, the Indian market has the following different types of annuity plans:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Immediate Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>As the name suggests, an \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/immediate-annuity-plus\\\" target=\\\"_blank\\\">immediate annuity plan\u003C/a> is designed for individuals who want to receive income after investing a one-time, single payment. These plans can start giving regular income as early as within a month. Immediate annuity policies are better suited for those nearing retirement.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Deferred Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Deferred annuity plans are tailored for individuals who want to accumulate wealth over time before receiving payouts. You can invest in this plan by making a lump sum or regular premium payments, and these investments will grow during the accumulation phase. Unlike immediate annuity plan, deferred annuity plans’ payment phase begins at a later date, typically after retirement. It is well suited for young individuals or those in their 40s or 50s.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Fixed Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Fixed annuities are great for people who want a stable and predictable income to lead a comfortable post-retirement life. They are considered the safest annuity plan for individuals who seek financial security, regardless of market conditions. Insurers pay a fixed rate of interest on such investments and the payment also remains fixed unless specified otherwise in the policy documents. You can consider diversifying your retirement portfolio by investing in our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/savings-plan\\\" target=\\\"_blank\\\">Savings Plans\u003C/a> and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/protection-plan\\\" target=\\\"_blank\\\">Protection Plans\u003C/a> for additional income potential.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Variable Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Variable Annuities are a dynamic retirement planning tool because they provide variable returns in exchange for a lump sum investment. The premiums paid in Variable Annuities are invested in different financial securities like mutual funds, bonds, stocks, etc., whose returns are tied to market performance. You should choose such annuity plans only if you have a moderate to high-risk profile.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Life Annuity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A life annuity plan is designed to give you a steady income stream throughout your life. It ensures you don’t outlive your savings, giving you a relatively comfortable life. Some life annuities extend this benefit to the policyholder’s spouse so they continue receiving timely payments even after their partner’s death.\u003C/p>\u003Ch2>\u003Cstrong>How to Select an Annuity Plan?\u003C/strong>\u003C/h2>\u003Cp>Simply knowing what is annuity insurance won’t help you choose the right plan aligned with your financial goals. If you want to select the best annuity plan for your retirement, follow the below-mentioned tips:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Assess Your Financial Goals\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Before looking for any retirement annuity plans, calculate your anticipated monthly expenses during retirement, including daily expenses, potential medical costs, unexpected expenses, etc. Now, search for plans that can help you receive the estimated figure.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Evaluate Risk Tolerance\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Different annuities have varying levels of risks involved, so choose a plan that aligns with your preferred risk tolerance level. For example, people with low-risk profiles can stick to fixed annuities, while those with moderate to high-risk profiles can explore variable annuity plans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Factor in Inflation\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Inflation can erode your purchasing power significantly, and even affect your retirement fund if you don’t consider it during your planning phase. Consider looking for annuity plans with inflation-adjusted payouts, so your income stays at par with the rising living cost.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Research about the Insurer\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A trustworthy insurer with a good track record will provide a hassle-free and seamless experience throughout the policy tenure. So, always check the insurer’s reputation, claim settlement ratio, reviews, news, etc., before finalizing one. It will save you from unwanted stress later in life.\u003C/p>\u003Ch2>\u003Cstrong>Compare Similar Annuity Plans\u003C/strong>\u003C/h2>\u003Cp>Whether you’re looking for deferred & immediate annuity or fixed annuity, you should always compare similar types of policies before finalizing one. Comparing similar options will ensure you get a better plan with the best features and reasonable premiums.\u003C/p>\u003Ch2>\u003Cstrong>Which Annuity Plan is Most Suitable for You?\u003C/strong>\u003C/h2>\u003Cp>Different annuity plans are recommended for people with varying goals and risk appetite. For example, an immediate annuity can be more suitable for retirees or those nearing retirement seeking instant income. On the other hand, deferred annuities can be more suitable for young individuals who want to build wealth and a large retirement fund over time.\u003C/p>\u003Cp>Fixed annuities are great for people seeking a stable and risk-free income during retirement, whereas variable annuities are ideal for people with moderate to high-risk appetites. Always evaluate your financial condition, goals, obligations, etc., before choosing the right annuity plan. \u003C/p>\u003Ch2>\u003Cstrong>What is the Best Time to Buy an Annuity Plan?\u003C/strong>\u003C/h2>\u003Cp>It depends on your current life stage and financial readiness. People in their 30s and 40s can consider buying a deferred annuity plan because it builds a substantial retirement fund over a period, generating higher returns. Those nearing retirement or in their 50s and 60s can purchase immediate annuity plans to convert their accumulated savings into a steady income stream.\u003C/p>\u003Ch3>\u003Cstrong>Example of an Annuity\u003C/strong>\u003C/h3>\u003Cp>Atal Pension Yojana (APY) is a great example of an annuity because this government-backed pension scheme works exactly like traditional annuity plans. It requires individuals to pay a fixed premium during their active working years. Once they reach the age of 60, they can start receiving pension payment for life. The payment amount is determined based on the contribution amount and the age at which they started contributing. The pension benefit can be passed to their spouse in case of their death. \u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>Your retirement years should be reserved for enjoying life, not worrying about daily expenses. While numerous retirement plans in the market can be strategically chosen to build a significant retirement fund, an annuity plan comes across as the ideal option for most individuals. If you want a sense of stability and predictability for post-retirement income, consider checking our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">Shriram Life Assured Income Plan\u003C/a>. It features the benefits of savings, retirement, and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/child-plan\\\" target=\\\"_blank\\\">child plans\u003C/a> in a single policy.\u003C/p>\u003Cp>This plan provides a regular income option to assist you with your monthly expenses. Our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/early-cash-plan\\\" target=\\\"_blank\\\">Shriram Life Early Cash Plan\u003C/a> is a better choice if you want to get a larger lump sum on retirement or policy maturity. It features cash bonus guarantee, power of compounding, life cover, etc., to help you achieve your long-term financial goals. You can also explore the different annuity plans provided by Shriram Life Insurance to secure your golden years.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"What Is a Life Insurance Premium and How Is It Calculated?\",\"heading\":\"What Is a Life Insurance Premium and How Is It Calculated?\",\"short_description\":\"\u003Cp>Buying life insurance can be one of the prudent, responsible decisions to secure your family’s future.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/43.%20Life%20Insurance%20Premium_%20What%20it%20is_%20How%20does%20it%20calculated__0.jpg?VersionId=Lc7uH5s7_p8CRqDBVB9zmnK8pj6a4BI4\",\"alt\":\"How is life insurance premium calculated?\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-17T05:19:39\",\"updated_on\":\"2024-12-17T05:19:44\",\"read_more_title\":\"Know More\",\"slug\":\"/life-insurance-premium-what-is-it-how-does-it-calculate\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>Buying life insurance can be one of the prudent, responsible decisions to secure your family’s future. However, the world of life insurance can appear overwhelming and difficult to navigate because of its terminologies. One of the most common words you’ll see throughout your policy search is ‘insurance premium.’ This seemingly simple term is the financial backbone of all life insurance policies. This blog aims to simplify the understanding of insurance premium and explain how it is calculated so you can proceed with your research with confidence and ease.\u003C/p>\u003Ch2>\u003Cstrong>What is Insurance Premium?\u003C/strong>\u003C/h2>\u003Cp>When one is exploring insurance policies, it is useful to begin by understanding what is life insurance premium. You can view it as an amount paid/payable to the insurance company to keep your policy active. One way to think of it is the cost of securing financial protection for your loved ones. Insurance premiums can be paid at varying frequencies, depending on the policy’s terms. Life insurance premium varies from one policy and individual to another and is calculated based on various factors.\u003C/p>\u003Ch2>\u003Cstrong>How Does Insurance Premium Work?\u003C/strong>\u003C/h2>\u003Cp>When you make the first insurance premium payment after signing the life insurance policy documents, you enter into a legal contract with the insurer. It makes the insurance company liable to pay the agreed sum assured to the nominee in case of your death, provided the policy was active at the time of death.\u003C/p>\u003Cp>Continuous premium payments ensure the validity of the policy. If you’re buying your first life insurance policy and are unsure of how much premium it will require, use an online life insurance premium calculator to get an approximate estimate.\u003C/p>\u003Ch2>\u003Cstrong>How is Insurance Premium Calculated?\u003C/strong>\u003C/h2>\u003Cp>Knowing what is the premium for life insurance isn’t enough to find the right policy; you must also know how insurers calculate premiums to get the best policy with competitive premiums. While insurers use several factors to calculate insurance premiums, the following are the most common:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Age\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Age plays a crucial role because elders are perceived as more prone to diseases and life-threatening conditions than their younger counterparts. Hence, premiums for young individuals are comparatively lower than those for elders.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Lifestyle\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Insurers generally keep higher premiums for individuals who frequently engage in risky activities like hiking, diving, racing, etc. You can expect slightly lower premiums if you don’t participate in similar activities.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Medical History\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Assessing medical history helps insurers determine the risk associated with an individual’s life. People who have suffered severe diseases in the past, underwent surgery, or have a family history of critical illnesses, etc., are more likely to be charged higher premiums than those who don’t.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Profession\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>People employed in risky professions or industries, such as mining, the oil & gas sector, etc., are required to pay higher premiums because they’re regularly exposed to working environments that have some inherent risks.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Policy Duration\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A longer policy term typically increases the insurer’s risk exposure. Hence, longer policies may have slightly higher premiums than shorter policies. However, exceptions are always there.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Income\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Many insurers assume higher-income people have higher coverage requirements and a relatively lower perceived financial risk. Hence, premiums in such cases are comparatively lower.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Marital Status & Dependents\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The number of dependents influences the eligibility for life insurance coverage and premium payment capacity. Some insurers may reduce the sum assured cover and premium if you have a higher number of dependents.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Sum Assured Amount\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The higher the policy’s sum assured amount, the higher the premium and vice-versa.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Rider Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Every rider has an additional cost. Your premium will increase in direct proportion to the number of riders you add to the main policy.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Residential Location\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>All residential locations have varying crime rates and environments. Hence, those residing in safer localities may get lower premiums than those living in risky locations.\u003C/p>\u003Cp>These factors determine premiums for all \u003Ca href=\\\"https://www.shriramlife.com/life-insurance\\\" target=\\\"_blank\\\">types of life insurance\u003C/a>, but some insurers can have additional factors in place. If you’re overwhelmed with premium calculations, always use a reliable life insurance premium calculator online to get approximate premium estimates.\u003C/p>\u003Ch2>\u003Cstrong>Types of Insurance Premiums\u003C/strong>\u003C/h2>\u003Cp>Now that you’ve understood what is life insurance premium is and how it’s calculated, let’s take a quick look at some other common types of insurance premiums shared below:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Health Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>It is the amount you pay to keep your health insurance policy active. A health insurance policy typically covers medical expenses like hospitalization, surgeries, treatments, etc. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Auto Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>As the name suggests, it is the amount you pay to insure your vehicles against financial damages arising from potential risks like accidents, theft, natural disasters, etc.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Home owners Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Homeowners make periodic premium payments to financially protect their homes and belongings against risks like fire, natural calamities, theft, and riots.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Renters Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Renters premium is the cost you pay to insure the contents of the rented home, such as furniture, appliances, personal belongings, and other possessions, against unfortunate events like theft, damage, fire, etc.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Life Insurance Premium\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>A life insurance premium is paid to secure your family’s financial future in case of your death. \u003C/p>\u003Ch2>\u003Cstrong>Factors to Consider When Buying an Insurance Premium Policy\u003C/strong>\u003C/h2>\u003Cp>There are different types of life insurance products in the Indian market, so always use the following factors to find, evaluate, compare, and buy the right policy.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Financial Requirements\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>You should begin by analyzing your current financial condition and deciding how much you want your family to receive for financial security in case of your death. In addition to insurance, you can consider investing in our Savings Plans or Protection Plans to diversify the safety net.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Affordability\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>It is the most crucial factor that no one should ignore. Policies are generally long-term and demand steady premium payments to ensure validity. So, pick policies with reasonable premiums that can be paid easily and consistently. Consider doing a life insurance premium calculation based on your financial standing to maintain a balance between adequate coverage and affordability.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Inclusions and Exclusions\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>No two policies are designed equally, so you must go through the policy’s inclusions and exclusions for clarity. Also read the terms and conditions regarding coverage, life insurance premium paying terms, exclusions, riders, maturity benefits, etc., to avoid hiccups at a later stage.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Claim Settlement Ratio\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Check the insurer’s previous claim settlement records to ensure your family receives the policy amount without hassle.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Riders\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If standard policy coverage seems insufficient, you can purchase riders that enhance the coverage, providing additional benefits to beneficiaries. Not all insurers provide the same riders, so check the insurer-specific website for accurate details. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Policy Duration \u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>You should always pick a policy duration that aligns with your long-term financial goals. It should also make it easier for you to make consistent premium payments without putting financial strain. \u003C/p>\u003Ch2>\u003Cstrong>What are the Key Factors Affecting Insurance Premium?\u003C/strong>\u003C/h2>\u003Cp>Numerous factors affect insurance premiums, such as the person’s age, medical history, marital status, number of dependents, profession, location, and much more. We have discussed all these factors above, so head to the ‘how is insurance premium calculated’ section for detailed explanation. \u003C/p>\u003Ch2>\u003Cstrong>What Determines an Insurance Premium?\u003C/strong>\u003C/h2>\u003Cp>In India, actuaries are responsible for determining insurance premiums. They use several financial theories, relevant statistics, and formulas to calculate the probability of various events, such as accidents, unemployment, marriage, retirement, etc., to determine the cost required to cover future claims, administrative expenses, and profit margin. They also use various factors, as discussed above, to ensure they finalize financially viable and fair premiums.\u003C/p>\u003Ch2>\u003Cstrong>How to Pay Insurance Premiums?\u003C/strong>\u003C/h2>\u003Cp>Insurance premium payments can be made via multiple options. You can pay online using net banking, debit and credit cards, mobile apps, and online wallets like Gpay, Paytm, etc. Offline payments can also be made by issuing checks. Busy professionals can issue online standing instructions to their credit card partners for fixed, automatic deductions. Policyholders have the option to choose their premium payment frequency, such as monthly, quarterly, semi-annually, annually, or a single payment, depending on their preference.\u003C/p>\u003Ch2>\u003Cstrong>What does an Insurance Company do with the Premiums?\u003C/strong>\u003C/h2>\u003Cp>Insurance companies use the premiums to cover potential claims arising from insured events. They also invest a portion of the premium in various financial securities and instruments, such as bonds, stocks, etc., to generate additional income. This income offsets operational costs and maintains competitive, fair pricing for all insurance policies.\u003C/p>\u003Ch2>\u003Cstrong>What is an Actuary?\u003C/strong>\u003C/h2>\u003Cp>Actuary is a certified professional trained to use advanced statistical and mathematical methods to assess and manage financial risks and uncertainties, especially in the insurance industry. They calculate the potential cost of future events, helping insurance companies design policies to minimize those risks. \u003Cbr />Since actuaries are qualified experts in analyzing financial implications of uncertainty and risk through complex models based on social factors, demographics, economics, etc., they finalize the premiums for different types of life insurance products.\u003C/p>\u003Ch2>\u003Cstrong>What Happens if You Stop Paying Life Insurance Premiums?\u003C/strong>\u003C/h2>\u003Cp>Delay in premium payment or entirely stopping premium payments can result in policy lapse. As a result, your family no longer remains eligible to claim the policy benefits. Most insurers provide a grace period to enable policyholders to make timely payments without incurring any penalty or coverage termination.\u003C/p>\u003Cp>The grace period can be 15-30 days, but it varies from insurer to insurer. We encourage policyholders to review their policy’s life insurance premium-paying terms and grace period to avoid untimely policy lapse or penalties.\u003C/p>\u003Ch2>\u003Cstrong>How Can I Save on my Life Insurance Premiums?\u003C/strong>\u003C/h2>\u003Cp>Buying a policy when you’re young is the best way to save on insurance premium payment. Maintaining a healthy lifestyle, avoiding risky activities, comparing quotes before finalizing a policy, and disclosing pre-existing medical conditions are additional ways to save on your premiums. We have discussed how different factors influence life insurance premium above, so you can use that information for extra savings. \u003C/p>\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\u003Cp>Having the right life insurance policy will ensure your family’s financial needs are met, even when you’re not around. To enjoy optimal benefits of life insurance policies, always invest in a policy with reasonable premiums and adequate coverage. You can explore our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/early-cash-plan\\\" target=\\\"_blank\\\">Shriram Life Early Cash Plan\u003C/a> because it provides dual benefits of wealth creation through compounding and cash bonus guarantee, while giving life insurance protection.\u003C/p>\u003Cp>Our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">Shriram Life Assured Income Plan\u003C/a> is another great option that provides assured income and life insurance cover at low premium payment plans. We have various \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">retirement plans\u003C/a>, \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/protection-plan\\\" target=\\\"_blank\\\">protection plans\u003C/a>, etc., designed to achieve different financial goals, so explore the plans right for you. Consider using the information in this guide and an online life insurance premium calculator to pick the right policy with reasonable premiums.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"What is a Pension Payment Order and Why is it Important for Pensioners?\",\"heading\":\"What is a Pension Payment Order and Why is it Important for Pensioners?\",\"short_description\":\"\u003Cp>Timely pension payments are the backbone of a stable and worry-free life post-retirement.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/52.%20What%20is%20a%20Pension%20Payment%20Order%20%28PPO%29%20and%20Why%20is%20it%20Important__0.png?VersionId=tvKRLsWdZV.Oa6i1x1RgASb2Tg2E4P58\",\"alt\":\"What is Pension Payment Order and Why is it Important?\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-16T06:00:21\",\"updated_on\":\"2024-12-16T06:01:35\",\"read_more_title\":\"Know More\",\"slug\":\"/what-is-a-pension-payment-order-and-why-is-it-important-for-pensioners\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/retirement\\\" hreflang=\\\"en\\\">Retirement\u003C/a>, \u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>Timely pension payments are the backbone of a stable and worry-free life post-retirement. In fact, it is the only income source some individuals will have after retirement. If you’re nearing retirement, you must start the process of obtaining a Pension Payment Order (PPO) a few months before your retirement date so you can start receiving the pension benefits right after your retirement. \u003C/p>\u003Cp>Without a PPO, your pension amount can be withheld, delayed, or lowered, creating unwanted stress. This article aims to help government and public sector employees registered under the Employee Provident Fund (EPF) understand the fundamentals and importance of PPO. It will empower them with the knowledge needed to obtain a PPO and plan their retirement better.\u003C/p>\u003Ch2>\u003Cstrong>Introduction to Pension Payment Order (PPO)\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>Definition and Overview\u003C/strong>\u003C/h3>\u003Cp>A Pension Payment Order (PPO) is an important legal document that acts as an official authorization for pension disbursement. It is a detailed document that lists crucial details, such as the pensioner’s name, retirement date, last drawn salary, pension amount payable, mode of payment, pensioner’s bank account details, etc.\u003C/p>\u003Cp>This order is obtained after a thorough review of the retiree’s service records, pension entitlements, and other relevant details so the final rights and obligations can be determined. If you’re registered under the EPS pension scheme, you will need this order to receive consistent pension income throughout your retirement years.\u003C/p>\u003Ch3>\u003Cstrong>Purpose and Importance\u003C/strong>\u003C/h3>\u003Cp>Since a PPO facilitates the pension disbursement process and determines the pension amount, retirees can rest assured of receiving a fixed income every month in their non-working years. The details in this order can help them plan their retirement expenses for a smooth and stress-free life. \u003Cbr />We recommend not relying on pension retirement benefits alone and investing in reliable retirement and pension solutions during active work years for better returns. \u003C/p>\u003Ch2>\u003Cstrong>Components of a PPO\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>PPO Number\u003C/strong>\u003C/h3>\u003Cp>Every PPO order contains a unique PPO number that helps identify a pensioner registered under the Employee Provident Fund (EPF). It is a 12-digit alphanumeric code used as a reference number for all pension-related transactions and communications. Whether you want to file a pension-related complaint to the EPFO pension authority or track your pension payments, you will always need your PPO number.\u003C/p>\u003Ch3>\u003Cstrong>Pensioner’s Details\u003C/strong>\u003C/h3>\u003Cp>A PPO lists the pensioner’s details, such as their date of retirement, date of birth, last drawn salary, pension-paying authority, pension benefits, bank details, etc. All these details are obtained after a thorough pension verification process, which facilitates error-free, hassle-free, and timely pension disbursement to the retiree.\u003C/p>\u003Ch3>\u003Cstrong>Pension Amount and Date of Commencement\u003C/strong>\u003C/h3>\u003Cp>It is the most crucial component of any PPO because it offers clarity about the fixed monthly payments a retiree will receive, along with details of the first payment date. This information can help retirees plan their monthly and annual budgets accordingly. If you’re entitled to a big pension after retirement, consider investing in reliable pension fund management solutions for diversifying retirement income. \u003C/p>\u003Ch2>\u003Cstrong>Why is PPO Important in Retirement Planning?\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>Ensures Financial Stability\u003C/strong>\u003C/h3>\u003Cp>Retirees registered under the EPS pension scheme can use their PPO to plan their retirement. PPO guarantees a steady and predictable income, reducing retiree’s dependence on their savings. This financial cushion makes it easier to plan expenses and investments for a secure and stable future.\u003C/p>\u003Ch3>\u003Cstrong>Complements Life Insurance Products\u003C/strong>\u003C/h3>\u003Cp>While pensions provide financial security during retirement, no one should rely on pensions as the sole income source during non-working years. It can be best used as a complementary financial tool with goal-aligned life insurance products, like our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/early-cash-plan\\\" target=\\\"_blank\\\">Early Cash Plan\u003C/a> and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/pension-plus\\\" target=\\\"_blank\\\">Pension Plus\u003C/a>. A diversified retirement plan like this strikes the perfect balance of consistent income and emergency support. \u003C/p>\u003Ch3>\u003Cstrong>Acts as a Proof of Pension Entitlement\u003C/strong>\u003C/h3>\u003Cp>Employees entitled to EPFO pension will need a valid Pension Payment Order (PPO) as legal proof of a pensioner’s entitlement to pension benefits. This order will always come in handy while handling legal matters related to pensions or tracking pension payments and complaints. It will ensure you continue to enjoy financial stability in the form of timely, predictable pension income. \u003Cbr />Obtaining a PPO and Choosing the Right Retirement Plan\u003C/p>\u003Ch3>\u003Cstrong>Application Process\u003C/strong>\u003C/h3>\u003Cp>You can apply for a PPO by submitting a pension application to the Accountant General (A&E) through your department. After processing the pension papers, the Accounts Office will issue the Pension Payment Order (PPO). If you want to strengthen your financial security by diversifying your retirement income, we recommend choosing the right retirement plan.\u003C/p>\u003Cp>The retirement plan’s application process will vary depending on the plan provider, so we recommend checking the precise application process after finalizing a retirement and pension fund management provider. You can explore our retirement plans to find goal-aligned options along with their detailed application processes. \u003C/p>\u003Ch2>\u003Cstrong>Required Documentation\u003C/strong>\u003C/h2>\u003Cp>You will need the following documents while applying for a Pension Payment Order (PPO):\u003C/p>\u003Cul>\u003Cli>Identity proof\u003C/li>\u003Cli>Age proof\u003C/li>\u003Cli>Bank account details for pension disbursement \u003C/li>\u003Cli>Two passport-size joint photographs with your spouse duly attested by the Head of Office\u003C/li>\u003Cli>Two copies of identification marks duly attested by a Gazetted Officer\u003C/li>\u003Cli>Two sets of specimen signatures duly attested by a Gazetted Officer\u003C/li>\u003Cli>Family details, including the age, marital status, and details of handicapped members (if any)\u003C/li>\u003Cli>Updated service book\u003C/li>\u003Cli>Death certificate or Legal Heirship certificate for family pension\u003C/li>\u003Cli>Form 19\u003C/li>\u003Cli>Nomination for Life Time Arrears of CVP/Gratuity/Pension\u003C/li>\u003C/ul>\u003Cp>When applying for a retirement plan, you will typically need identity and age proof, along with other documentation as specified by the retirement plan provider. \u003C/p>\u003Ch2>\u003Cstrong>Common Issues with PPO and Retirement Planning Solutions\u003C/strong>\u003C/h2>\u003Ch3>\u003Cstrong>Lost PPO Number\u003C/strong>\u003C/h3>\u003Cp>Losing a PPO number for any reason can affect your pension disbursement process or make it challenging to raise complaints to relevant authorities or track pension-related transactions. If you ever lose your PPO number, contact your bank or Pension Disbursing Authority (PDA) for assistance. Alternatively, you can also visit the EPFO pension website to access the pensioner’s portal and find your PPO number by providing your bank account number or Employee Provident Fund (EPF) account number. \u003C/p>\u003Ch3>\u003Cstrong>Errors in PPO Details\u003C/strong>\u003C/h3>\u003Cp>While pension verification requires thorough review, it doesn’t eliminate any chances of accidental errors in the issued PPO. Incorrect date of birth, bank details, family member list, revised pay, etc., are some common errors reported in PPOs, but they can be corrected by contacting your Head of Office or Pension Disbursing Agency (PDA).\u003C/p>\u003Ch2>\u003Cstrong>Maximize Your Retirement Income with Shriram Life Insurance\u003C/strong>\u003C/h2>\u003Cp>EPFO pension often forms a significant portion of one’s retirement income, but you cannot get it automatically on retirement. You need a PPO order that authorizes and streamlines your pension payments. This legal document is crucial for your retirement planning because it lists the steady income you will receive during your non-working years. If you want to live a life free of financial challenges after retirement, we recommend combining your EPS pension scheme with complimentary insurance and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">retirement plans\u003C/a> from Shriram Life Insurance for extra retirement benefits. Our retirement plans such as \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/immediate-annuity-plus\\\" target=\\\"_blank\\\">Shriram Life Immediate Annuity Plus\u003C/a> and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">Shriram Life Assured Income Plan\u003C/a> can give you the benefits of regular savings and assured income, easing your retirement years.\u003Cbr /> \u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"Understanding the Benefits of NPS and PPF for Retirement\",\"heading\":\"Understanding the Benefits of NPS and PPF for Retirement\",\"short_description\":\"\u003Cp>Every working individual dreams of living a comfortable and worry-free retirement life.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/51.%20Understanding%20the%20Benefits%20of%20NPS%20and%20PPF%20for%20Retirement_0.png?VersionId=mS10E7cDSwwnDbXd.TIag1FfaKINRqqW\",\"alt\":\"Understanding the benefits of NPS and PPF\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-13T07:16:55\",\"updated_on\":\"2024-12-13T07:17:04\",\"read_more_title\":\"Know More\",\"slug\":\"/understanding-the-benefits-of-nps-and-ppf-for-retirement\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>Every working individual dreams of living a comfortable and worry-free retirement life. This can only become a reality with strategic retirement planning. Whether you’re working in an start up or employed in a top MNC, you must invest in secure retirement plans in India that align with your retirement goals.\u003C/p>\u003Cp>It will ensure you receive a steady income post-retirement. While there are numerous retirement plans in India, NPS and PPF are the most popular choices. These government-backed retirement schemes have a lot in common, yet there are differences too.\u003C/p>\u003Cp>Not knowing the specific benefits of each may result in making suboptimal choices that significantly lower the retirement funds. This article highlights a clear NPS and PPF comparison, along with fundamentals and clear benefits, so you can plan and invest correctly for optimal gains.\u003C/p>\u003Ch2>\u003Cstrong>Overview of NPS and PPF\u003C/strong>\u003C/h2>\u003Cp>NPS is a voluntary pension system for all Indian citizens, including NRIs and OCIs. It is currently regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and is considered one of the best market-linked defined contribution schemes that enable people to build their retirement income and save tax. Many people are drawn to this scheme because of the lucrative NPS tax benefits that we will discuss later in this article.\u003C/p>\u003Cp>For risk-averse individuals, PPF is typically the first consideration for retirement planning in India. It is one of the oldest long-term savings schemes regulated by the Ministry of Finance that provides guaranteed returns. Unlike NPS, your PPF investment isn’t affected by market volatility, making it a safe retirement plan for conservative investors who want assured retirement funds.\u003C/p>\u003Ch2>\u003Cstrong>Key Benefits of NPS\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexibility\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you assess NPS vs. PPF regarding flexibility, NPS clearly wins. It allows you to decide how much of the invested amount you want to allocate to equity, corporate debt, government bonds, and alternative investment funds.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Self-employed individuals can avail NPS tax benefits u/s 80CCD (1). They are eligible for tax deductions up to 20% of their gross income, with a ceiling of ₹1.50 lakh u/s 80 CCE. An additional deduction of ₹50, 000 is allowed over the ₹1.50 lakh limit u/s 80 CCE.\u003C/p>\u003Cp>If you’re an employed individual, you can claim up to 10% of salary (basic + DA) u/s 80 CCD (1) on your contribution as deduction, with a ceiling of ₹1.50 lakh limit u/s 80 CCE, and an additional ₹50, 000 u/s 80 CCD (1B).\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Low Cost\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Besides the generous NPS tax benefits, this scheme also provides the lowest account maintenance costs. For example, the annual Permanent Retirement Account (PRA) maintenance charge per account by CRA is ₹69, a charge per transaction is ₹3.75, etc. Such low costs make NPS a relatively affordable retirement product compared to other similar options.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Portability\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>In the NPS vs. PPF comparison, NPS provides greater ease of portability. Whether you’re switching to a new company in a new city or changing your career path altogether, you can continue using the same PRAN for convenience. All NPS accounts can be easily transferred across locations and employment, provided you update the details linked to your PRAN.\u003C/p>\u003Ch2>\u003Cstrong>Key Benefits of PPF\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Safety and Security\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Conservative investors often include PPF in their retirement planning in India because of its assured returns. Since the government sets PPF account rates, investors can expect risk-free and guaranteed returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax-free Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>While NPS tax benefits are limited, PPF provides full tax exemption on the maturity and earned interest amount. You can also claim a tax deduction on the PPF contribution in a financial year u/s 80C, subject to a maximum of ₹1.50 lakh. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Long-term Savings\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>PPFs have a lock-in period of 15 years to support long-term financial goals during retirement. Working individuals in their mid-30s and 40s should include PPF in their retirement planning in India because it will give them a guaranteed and steady monthly income post-retirement. Avoid making partial or early withdrawals before the maturity period to get optimal returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Loan Facility\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>PPFs have a long lock-in period and partial withdrawals cannot be made in the first six years. However, you can take a loan against your accumulated PPF balance if you need urgent funds during this phase. You can get a loan between the 3rd and 6th year. The loan amount cannot exceed 25% of the PPF balance available two years before placing a loan application.\u003C/p>\u003Ch2>\u003Cstrong>Comparing NPS and PPF\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Risk and Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you’re evaluating the NPS vs. PPF option from a risk perspective, PPF emerges as the safest option. Since PPF is backed and regulated by the Ministry of Finance, investors can rest assured of receiving guaranteed and risk-free funds during retirement. NPS is a better option for more risk-tolerant individuals because all NPS returns are market-linked, making them volatile. Since risk and returns are directly proportional, NPS has a relatively greater potential to generate higher returns than PPF.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Suitability\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Investors wanting assured, steady, risk-free retirement funds must choose PPF over NPS. Those with a risk-taking appetite can consider investing in NPS for potentially higher returns. You can explore our retirement plans to find options aligned to your risk appetite and retirement goals.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Diversification\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The best part about retirement planning in India is that you can create a diversified retirement plan that provides a healthy mix of safety, higher returns, and flexibility. Instead of relying only on PPF or NPS, you can allocate your investment in both plans according to your risk profile. You can also include financial products from our retirement and investment plans to diversify your retirement planning.\u003C/p>\u003Ch2>\u003Cstrong>How to Maximize Benefits?\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Investment Strategy\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>We recommend investing in NPS and PPF early in your career to benefit from compounding growth. You can also set a monthly or quarterly contribution schedule instead of lump-sum yearly payments to avoid market timing risks and smooth out price fluctuations in NPS’s equity component. To enjoy optimal returns, avoid early withdrawals to prevent tax implications.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Planning\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you have invested in NPS, we recommend withdrawing up to 60% on maturity and using the remaining balance to buy the best annuity plan, like our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/immediate-annuity-plus\\\" target=\\\"_blank\\\">Immediate Annuity Plus plan\u003C/a>. Such withdrawals will be tax-free, and the annuity purchase will create more avenues for steady income throughout your retirement. \u003Cbr />PPF account holders must avoid withdrawing any amount in the first five years; otherwise, it will be taxed as normal income. Keep your PPF untouched for 15 years and enjoy full withdrawal at zero tax, including tax-free interest income.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Regular Reviews\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Investments in \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">retirement plans\u003C/a> require constant monitoring and adjustment, especially if you’re investing in NPS. If your income and risk appetite increases, consider reassessing your asset allocation for potentially higher returns. You can also invest in other retirement insurance plans that further support your retirement goals.\u003C/p>\u003Ch2>\u003Cstrong>Secure Your Retirement with Shriram Life Insurance\u003C/strong>\u003C/h2>\u003Cp>Planning early for retirement isn’t just a wise decision but an essential one. Knowing the fundamentals isn’t enough if you want to invest in retirement plans in India like NPS and PPF. You must know the precise benefits of each plan, including their tax implications and key differentiator points, to make informed investment decisions. It will ensure you receive a predictable and steady income throughout your retirement. \u003C/p>\u003Cp>While investing in both schemes is a better choice from a diversification perspective, it is also ideal for supporting a worry-free and comfortable retirement. You can plan your retirement with Shriram Life Insurance because we offer a wide range of retirement, \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/protection-plan\\\" target=\\\"_blank\\\">protection\u003C/a>, \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/investment-plan\\\" target=\\\"_blank\\\">investment\u003C/a>, and \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-savings-plan\\\" target=\\\"_blank\\\">savings plans\u003C/a> that can help you achieve financial freedom in your post-retirement phase.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"Difference Between Linked and Non-Linked Insurance Plans\",\"heading\":\"Difference Between Linked and Non-Linked Insurance Plans\",\"short_description\":\"\u003Cp>When one has to choose a life insurance plan, the variety and options available across different types of life insurance plans, can pose a challeng\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/12.%20Participating%20vs.%20Non-Participating_%20Understanding%20Life%20Insurance%20Policy%20Types_0.jpg?VersionId=DmmnfsZPucA048vK90CH_5mhMHCj04vz\",\"alt\":\"Linked vs Non- linked insurance plans\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-12T09:59:52\",\"updated_on\":\"2024-12-12T09:59:56\",\"read_more_title\":\"Know More\",\"slug\":\"/difference-between-linked-and-non-linked-insurance-plans\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>, \u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>\",\"description\":\"\u003Cp>When one has to choose a life insurance plan, the variety and options available across different types of life insurance plans, can pose a challenge. The information one needs to process to make this decision can seem difficult, affecting one’s ability to choose the right policy. If you’re buying your first life insurance policy, you will come across Linked and non-linked insurance plans. These are the most common types of insurance policies. We aim to explain what these plans are and how they differ from one another, so that you can select the right life insurance plan.\u003C/p>\u003Ch2>\u003Cstrong>What is a Non-Linked Insurance Policy?\u003C/strong>\u003C/h2>\u003Cp>It is a traditional life insurance Plan designed to provide a stable and assured financial safety net through life coverage and guaranteed benefits. Unlike linked insurance plans, the returns of Non-Linked Insurance Plans aren’t tied to market performance. If your risk tolerance is low and you want fixed returns on maturity, then Non-Linked Insurance Plans are better suited to your profile.\u003C/p>\u003Cp>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">While most non-linked insurance plans (traditional plans) such as \u003C/span>\u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Shriram Life Assured Income Plan\u003C/span>\u003C/a>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">, \u003C/span>\u003Ca href=\\\"https://www.shriramlife.com/life-insurance/early-cash-plan\\\" target=\\\"_blank\\\">\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Shriram Life Early Cash Plan\u003C/span>\u003C/a>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\"> etc., provide fixed returns, those clubbed with Endowment Plans guarantee additional value. Term Plan such as \u003C/span>\u003Ca href=\\\"https://www.shriramlife.com/life-insurance/smart-protection-plan\\\" target=\\\"_blank\\\">\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Shriram Life Smart Protection Plan\u003C/span>\u003C/a>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\"> is also a popular Non-Linked Plan, but it only provides life cover to the family in the unfortunate event of the policyholder’s death during the policy term.\u003C/span>\u003C/p>\u003Ch2>\u003Cstrong>Advantages of Non-Linked Insurance Policy\u003C/strong>\u003C/h2>\u003Cp>The following \u003Ca href=\\\"https://www.shriramlife.com/blog/golden-premier-saver-plan/comprehensive-benefits-of-non-linked-participating-insurance-plans\\\" target=\\\"_blank\\\">benefits of non-linked insurance plans\u003C/a> make them the ideal choice for conservative investors:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Guaranteed Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>One of the biggest differences between linked and non-linked plans is assured returns. Unlike linked insurance plans, Non-Linked Plans provide a guaranteed return on maturity, regardless of the market condition.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Policyholders can claim tax deductions equivalent to the premium paid in a particular financial year u/s 80 C. However, the maximum deductions are capped at ₹1.50 lakh/annum. The maturity proceeds from such plans are tax-free u/s 10 (10D) if the premium payment for any year doesn’t exceed 10% of the sum assured value.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Low Risk\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you evaluate linked vs. non-linked insurance plans regarding risk factors, non-linked plans emerge as the winner for individuals with a lower risk tolerance. Since market volatility doesn’t affect Non-Linked Policy returns, they appear as a safe plan for people who value stability.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Long-term Wealth Creation\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Most non-linked insurance plans have a long tenure, so they encourage disciplined saving over time. They help people build a substantial fund for future needs, securing their life financially. You can amplify your long-term wealth creation goals by pairing Non-Linked Plans with other Retirement Plans and Savings Plans that complement your financial goals.\u003C/p>\u003Ch2>\u003Cstrong>What is a Linked Insurance Policy?\u003C/strong>\u003C/h2>\u003Cp>A linked insurance policy blends investment and insurance aspects in a single financial product. Unit Linked Insurance Plans (ULIP) are the most common type of linked insurance plans. When you invest in such plans, a part of the premium goes toward life coverage while the balance is invested in market-linked funds.\u003C/p>\u003Cp>Since the premium is invested in market securities, policyholders may earn higher returns. These plans are recommended for risk-tolerant individuals who can handle market volatility. You can check our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/wealth-pro\\\" target=\\\"_blank\\\">Shriram Life Wealth Pro plan\u003C/a>, as this Unit-Linked Policy provides the best of investment and protection in a single plan.\u003C/p>\u003Ch2>\u003Cstrong>Advantages of a Linked Insurance Policy\u003C/strong>\u003C/h2>\u003Cp>The following advantages of linked insurance plans make them an ideal choice for risk-tolerant individuals.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Growth Potential\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>It is among the best life insurance Investment options that allows your money to grow based on the performance of your chosen funds. Instead of receiving a fixed amount, you have a higher potential to earn great returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Fund Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>What makes linked plans more advantageous in the linked vs. non-linked life insurance comparison is its flexibility. Policyholders can choose between debt, equity, or balanced funds to align the investment with their risk appetite and financial goals. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Transparency\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Unlike non-linked plans, ULIP policyholders receive detailed reports on fund performance and related charges. It helps them understand and track their investment and potential returns for clarity and convenience.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Payments made toward insurance premiums are eligible for tax deductions u/s 80 C, up to a maximum of ₹1.50 lakh/annum. Maturity proceeds received on ULIP plans will be tax-free u/s 10 (10D) if the aggregate annual premium payment doesn’t exceed ₹2.50 lakh. However, maturity proceeds received by the nominee in the event of a policyholder’s death will be entirely tax-free.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Switching Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Some ULIPs provide free fund switches within a specific limit, so you can adjust your portfolio in response to changing market conditions or personal shifts in financial goals. \u003C/p>\u003Ch2>\u003Cstrong>How do Linked Insurance Plans Differ from Non-Linked Insurance Plans?\u003C/strong>\u003C/h2>\u003Cp>You can effortlessly choose the right insurance plan if you clearly understand the difference between linked and non-linked plans. The following table will give you a better picture of the linked vs. non-linked life insurance plans:\u003C/p>\u003Ctable>\u003Ctbody>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Basis of Differentiation\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Linked Insurance Plans\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Non-Linked Insurance Plans\u003C/strong>\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Market Association\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Linked plans are affected by market volatility because a portion of the premium is invested in market securities\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Non-linked plans aren’t affected by market volatility\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Returns\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Policyholders don’t receive a fixed amount on maturity because the returns are determined by market performance\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Policyholders receive a fixed amount on maturity because these plans aren’t affected by market performance\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Investment Flexibility\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Policyholders can invest in debt, equity, or balanced funds depending on their financial goals, risk appetite, etc.\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Policyholders don’t have any control because the insurer decides where to invest\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Risk\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">The risk profile is medium to high, depending on your choice of funds and policy\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">The risk profile is relatively low\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Switching Funds\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Policyholders can switch funds if their existing funds aren’t performing well\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">This facility isn’t available to policyholders\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Partial Withdrawal\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">10% of the premiums can be partially withdrawn to support emergency financial needs. The withdrawal limit and terms can vary from one insurer and plan to another.\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Partial withdrawal isn’t typically allowed, but some insurers may allow you to withdraw a certain amount. \u003C/span>\u003C/td>\u003C/tr>\u003C/tbody>\u003C/table>\u003Ch2>\u003Cstrong>Which Insurance Policy is best for Your Investment Planning?\u003C/strong>\u003C/h2>\u003Cp>You must always choose your life insurance investment options based on your financial objectives, risk tolerance, and budget because not all plans are designed the same. Non-linked insurance plans will be a better choice if you want a stable return without market risk. Conversely, linked insurance plans are recommended if you are comfortable with market-linked fluctuations and want to take advantage of the high growth potential.\u003C/p>\u003Cp>Since both types of life insurance Plans have pros and cons, understand the policy clearly before investing. Learn how linked and non-linked plans work before making a decision. Consult a financial planner for personalized guidance if you’re still confused or overwhelmed by the options.\u003C/p>\u003Ch2>\u003Cstrong>Get the Best Life Insurance Coverage with Shriram Life Insurance\u003C/strong>\u003C/h2>\u003Cp>Life is unpredictable, and one of the most responsible aspects of financial planning is enabling that the policyholder’s family is taken care of financially, in the event of the insured’s unfortunate demise. This is where life insurance plans play a role in providing security and peace of mind. We recommend that an individual could explore the different types of life insurance Plans and invest in the right plans to secure their future. You can also explore our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/protection-plan\\\" target=\\\"_blank\\\">Protection Plans\u003C/a> to find the ideal financial product to suit your requirements.\u003C/p>\u003Cp>Shriram Life Insurance provides various insurance plans designed to achieve varying financial goals, each with varying features and benefits. You must check our \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/family-protection-plan\\\" target=\\\"_blank\\\">Shriram Life Family Protection Plan\u003C/a> if you want to secure your family’s financial future in case of your untimely demise. Our Shriram Life Early Cash Plan is a better option if you want to grow your wealth over a period while enjoying insurance coverage.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"Guide to Avail Loan Against Your Life Insurance Policy\",\"heading\":\"Loan Against Your Life Insurance Policy – Things to Know\",\"short_description\":\"\u003Cp>It is common for individuals to save money to meet short-term and long-term expenses.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/Loan%20Against%20insurance%20policy_1.jpg?VersionId=LcGCJcDQPEkAaU_fRvd92zrnJCgmBxYV\",\"alt\":\"Loan Against Your Life Insurance Policy\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-11T12:13:45\",\"updated_on\":\"2024-12-11T12:13:49\",\"read_more_title\":\"Know More\",\"slug\":\"/guide-to-avail-loan-against-your-life-insurance-policy\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>\",\"description\":\"\u003Cp>It is common for individuals to save money to meet short-term and long-term expenses. However, it is often the big expenses that come unexpected or suddenly such as medical bills, marriage expenses, higher education fees, property purchase/renovation, etc., that disrupt one’s financial condition. In such cases, people often fall short of the required funds and turn to financial institutions or others for loans. While people with a good credit score and assets can easily get loan approvals, others may not. In any case, becoming debt-ridden during such times is not financially prudent and one can save and plan ahead to avoid such a situation.\u003C/p>\u003Cp>If you don’t have assets like gold, properties, etc., to use as collateral but need funds to meet sudden expenses, you can use your life Insurance Policies to get secured loans. In this blog, we explain more about getting a loan against life Insurance policy so you can fulfil all your needs without stress and pressure.\u003C/p>\u003Ch2>\u003Cstrong>What is Loan against Policy?\u003C/strong>\u003C/h2>\u003Cp>As the term suggests, it refers to obtaining a loan against an existing life insurance policy. You use your insurance policy as collateral when you take such loans. Unlike personal loans, life insurance Loans are secured and give security to the lender. Hence, the loan on life insurance Policy typically has a lower interest rate than most personal loans.\u003C/p>\u003Cp>The loan amount depends significantly on the policy’s surrender value, premiums paid to date, policy type, and the eligibility of the policy. It is the best option to secure funds if you don’t have any \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/savings-plan\\\" target=\\\"_blank\\\">Savings Plans\u003C/a> to meet unexpected expenses. So, if you’re wondering, ‘Can I take a loan on my life insurance,’ we recommend checking your policy’s eligibility and the shortlisted lender’s terms and conditions for life insurance Loans.\u003C/p>\u003Ch2>\u003Cstrong>How to Get a Loan from a Life Insurance Policy?\u003C/strong>\u003C/h2>\u003Cp>Not all life insurance Policies are eligible for securing a loan, so start by determining your policy’s eligibility status. You can assess the policy type and check whether your insurance provider or other financial institutions offer loans against the particular policies. For eligible policies, you can contact our team on our toll-free number (1800-103-6116) to get step-wise guidance on how to avail a loan against your existing policy. You can also visit one of our branches for assistance. Use our ‘\u003Ca href=\\\"https://www.shriramlife.com/contact-us/branches\\\" target=\\\"_blank\\\">branch locator\u003C/a>’ to find a branch near you. \u003C/p>\u003Cp>The precise application steps may vary from one lender to another, so we recommend checking the particular lender/insurer’s website for accurate step-wise application details. You can also contact the lender’s online customer support executives for more details on how to take a loan from life insurance.\u003C/p>\u003Ch2>\u003Cstrong>Which Insurance Policies Are Eligible for a Loan?\u003C/strong>\u003C/h2>\u003Cp>Endowment Policies, Money-Back Policies, and Whole Life Policies are generally eligible for securing a personal loan against life insurance. If you’re covered under a group health insurance policy, Unit-Linked Insurance Plans (ULIPs), and term insurance plans, then you may not get loans against them. Some insurers may provide insurance against ULIPs, but not all will. Read your policy’s terms and conditions thoroughly and talk to potential lenders/insurers executives to determine whether you can get a loan on life insurance policy. You can assess your \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/retirement-plan\\\" target=\\\"_blank\\\">Retirement Plans\u003C/a> to find existing policies eligible for loans. \u003C/p>\u003Ch2>\u003Cstrong>Some Important Points for Loan against Insurance\u003C/strong>\u003C/h2>\u003Cp>If you often ask yourself, ‘Can I take a loan on my life insurance?’ The answer is yes. It is a straightforward process, but you must consider the following points before taking out a Loan against life insurance Policy.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Rate of Interest\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The rate of interest varies from one lender to another, but it is comparatively lower than personal loan interest rates. Unless specified in the loan documents, the interest rate remains fixed throughout the loan tenure. We recommend reading the loan’s full terms and conditions for clarity.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Repayment\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Loan on life insurance Policy offers flexible payment terms, but it also attracts severe repercussions on failed payments. The repayment tenure for such loans is generally six months, but it can sometimes be extended until the policy tenure. Individuals can repay the loan in fixed EMIs or as a lump sum at the end of the loan term. Some even pay the interest and get the principal deducted from the policy’s maturity value. You can talk to the lender and choose a loan repayment method that works best for you.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Loan Amount\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Most lenders offer loans up to 80%-90% of the policy’s surrender value, so calculate the loan amount accordingly before applying for any life insurance loans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Impact on Policy Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The outstanding loan amount and the accumulated interest will be deducted from the maturity proceeds, lowering your policy returns and safety net. You can prevent it by making timely repayments. \u003C/p>\u003Ch2>\u003Cstrong>What are the Documents Required to Avail Loan against Insurance?\u003C/strong>\u003C/h2>\u003Cp>If your policy qualifies for securing Life Insurance loans, then you will need the following documents for a smooth loan application process:\u003C/p>\u003Cul>\u003Cli>Life insurance policy document\u003C/li>\u003Cli>Duly filled loan application form\u003C/li>\u003Cli>Identity proof (Driver’s license/passport/PAN card/Aadhar card, etc.)\u003C/li>\u003Cli>Address proof (utility bill/rental agreement, etc.) \u003C/li>\u003Cli>Passport-size photographs\u003C/li>\u003Cli>Assignment of the policy document\u003C/li>\u003Cli>Proof of premium payment\u003C/li>\u003Cli>Bank statement\u003C/li>\u003Cli>Income proof\u003C/li>\u003Cli>Loan agreement\u003C/li>\u003C/ul>\u003Cp>Some lenders may require additional documents. \u003C/p>\u003Ch2>\u003Cstrong>The Benefits and Concerns of an Insurance Policy Loan\u003C/strong>\u003C/h2>\u003Cp>Many individuals have a basic understanding of what is policy loan in life insurance, yet they don’t have a clear picture. The following benefits and concerns will strengthen the awareness of loans against insurance policies so anyone can proceed with confidence.\u003C/p>\u003Ch3>\u003Cstrong>Benefits of an Insurance Policy Loan\u003C/strong>\u003C/h3>\u003Cul>\u003Cli>\u003Ch4>Lower Interest Rate\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>The interest rates on loans against insurance policies vary from one lender to another, but they are comparatively lower than those on most traditional, unsecured bank loans. \u003C/p>\u003Cul>\u003Cli>\u003Ch4>Less Scrutiny\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Since you’re applying for a loan by placing your insurance as collateral, there is less scrutiny involved in the application and approval process.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Faster Disbursement\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Unlike personal loans, the loan disbursal is faster for life insurance Loans. You may receive the loan amount within a few days of approval.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Higher Approval Chances\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Applying for a loan to your existing insurer has minimal chances of rejection, especially if you’ve never defaulted on your premium payments for three consecutive years.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Flexible Repayment Structures\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Getting a loan on life insurance Policy is desirable because it doesn’t have rigid repayment structures. You can choose to pay only the interest during the loan tenure and have the principal deducted from the maturity value. \u003C/p>\u003Ch2>\u003Cstrong>Concerns of an Insurance Policy Loan\u003C/strong>\u003C/h2>\u003Cul>\u003Cli>\u003Ch4>Impact on Policy Benefits\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>If you take a personal loan against life insurance, you may receive a lower maturity value, especially if you default on repayment. This can affect your financial planning and status.\u003C/p>\u003Cul>\u003Cli>\u003Ch4>Interest Accumulation\u003C/h4>\u003C/li>\u003C/ul>\u003Cp>Failure to repay timely interest can result in hefty interest accumulation. If the interest combined with the principal exceeds the policy’s cash value, the insurer may terminate your policy, stripping you of your coverage benefits.\u003C/p>\u003Ch2>\u003Cstrong>Personal Loan and Life Insurance Policy\u003C/strong>\u003C/h2>\u003Cp>If you’re struggling to choose between a personal loan and a loan against life insurance policy, we recommend understanding the difference between both to make an informed choice.\u003C/p>\u003Ctable>\u003Ctbody>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Basis of Differentiation\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Personal Loan\u003C/strong>\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">\u003Cstrong>Loan Against Life Insurance Policy\u003C/strong>\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Interest Rate\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Higher\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Lower\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Credit Check\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Mandatory\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Not required\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Processing Time\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Longer\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Faster\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Collateral\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Needed\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Not needed\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Documentation\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Extensive\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Minimal\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Repayment Terms\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Rigid\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Flexible\u003C/span>\u003C/td>\u003C/tr>\u003Ctr>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Chances of Rejection\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Higher\u003C/span>\u003C/td>\u003Ctd>\u003Cspan lang=\\\"EN-IN\\\" lang=\\\"EN-IN\\\">Lower\u003C/span>\u003C/td>\u003C/tr>\u003C/tbody>\u003C/table>\u003Cp>In a nutshell, obtaining a loan on life insurance policy is a more practical, hassle-free, and faster route to getting funds. Individuals with no assets for collateral can easily secure loans against eligible insurance policies.\u003C/p>\u003Ch2>\u003Cstrong>What Happens if You Fail to Repay?\u003C/strong>\u003C/h2>\u003Cp>Failed repayments will lead to increasing accrued interest over time, significantly reducing the maturity proceeds. If a person dies before repaying the loan and interest amount, the insurer reserves the right to deduct it from the policy’s maturity value before disbursing the balance. The insurer can also terminate the policy if the borrowed loan with interest exceeds the policy’s cash value to recover the dues.\u003C/p>\u003Ch3>\u003Cstrong>Get Easier Access to Insurance Loans from Shriram Life Insurance\u003C/strong>\u003C/h3>\u003Cp>Regardless of their financial planning, anyone may need urgent funds to meet unexpectedly large expenses. In such cases, obtaining a low-interest loan can be the best option. We recommend taking a loan against life insurance policy because it is fast, secure, and comes with flexible repayment terms. Many of the Shriram Life Insurance policies are eligible for securing a loan, like \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/new-shri-vidya-plan\\\" target=\\\"_blank\\\">Shriram Life New Shri Vidya\u003C/a>, \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-savings-plan\\\" target=\\\"_blank\\\">Shriram Life Assured Savings Plan\u003C/a>, etc. So, you can consider buying a policy from Shriram Life Insurance for enjoying multiple benefits, like systematic saving, wealth creation, financial security, collateral-free loan, and more. Since every plan has different features, coverage, and benefits, explore relevant plans and invest in the ones that align with your financial goals.\u003C/p>\",\"category\":\"/blog/advice\"},{\"title\":\"Best Child Plan for Education and Marriage\",\"heading\":\"Best Child Plan for Education and Marriage\",\"short_description\":\"\u003Cp>Every parent aims to secure their child’s future.\u003C/p>\",\"tile_image\":[{\"media_img\":{\"url\":\"https://cdn.shriramlife.com/slic-kalam/files/2024-12/63.%20Best%20Child%20Plan%20for%20Education%20and%20Marriage_0.png?VersionId=LhtipHzByCAZXFc5fQxrCHv79CfTUuEw\",\"alt\":\"Best child education for Marriage\"},\"media_svg\":null,\"media_svg_alt\":\"\",\"media_document\":null}],\"posted_on\":\"2024-12-10T05:38:00\",\"updated_on\":\"2024-12-10T05:38:07\",\"read_more_title\":\"Know More\",\"slug\":\"/best-child-plan-for-education-and-marriage\",\"field_bl_tag\":\"\u003Ca href=\\\"/blog/guides/recent\\\" hreflang=\\\"en\\\">Recent\u003C/a>, \u003Ca href=\\\"/blog/guides/child-plan\\\" hreflang=\\\"en\\\">Child\u003C/a>, \u003Ca href=\\\"/blog/guides/life-insurance\\\" hreflang=\\\"en\\\">Life Insurance\u003C/a>, \u003Ca href=\\\"/blog/guides/advice\\\" hreflang=\\\"en\\\">Advice\u003C/a>\",\"description\":\"\u003Cp>Every parent aims to secure their child’s future. Whether arranging funds for higher education or creating a sizable fund for hosting a grand wedding festivity for your child, the goal can differ for different parents. However, the process to achieve these financial goals remains relatively similar for most – investing in a Child Investment Plan. These financial products feature the dual benefits of investment and saving, providing two-pronged financial security. In this article, we explain how investment in Child Plans helps parents accumulate wealth for their children’s education and marriage needs through systematic savings. \u003C/p>\u003Ch2>\u003Cstrong>How Can Child Plans Help With Education?\u003C/strong>\u003C/h2>\u003Cp>Parents should consider investing in a Child Plan because it will support their child’s future educational needs in the following ways:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Wealth Creation for Future Education\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>When you begin investing in the best child plan for education such as \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/assured-income-plan\\\" target=\\\"_blank\\\">Shriram Life Assured Income Plan\u003C/a>, you follow a disciplined, long-term saving approach to build a large fund for your child’s higher educational requirements. It ensures you regular set aside a fixed amount that can later be used for your child’s higher educational expenses.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Death Benefit\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Since the ideal plans have an insurance component, they ensure your child’s education doesn’t stop in the unfortunate event of the policyholder’s (parent) death. If you want to secure your child’s future, invest in plans with a built-in premium waiver feature.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Payout Structures\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>When you’re planning your child’s future, estimate timelines and approximate amounts you will need to support your child’s higher education. It will help you identify a plan whose payout aligns with your estimated education timeline. For example, you can purchase the \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/new-shri-vidya-plan\\\" target=\\\"_blank\\\">Shriram Life New Shri Vidya plan\u003C/a>, which provides money-back benefits in the last four years of the policy. This flexible payout can be used to pay school fees, tuition fees, or other education expenses during that period.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Securing Collateral-free Loan\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If your child’s education plan changes over time and you need immediate funds to support those changes, you can use the existing best Child Plan For Education as collateral to secure a loan. You can typically get loans up to 80% of the policy’s surrender value, but this limit can differ from one insurer to another.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Enhanced Maturity Amount\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Some plans provide reversionary bonuses that get added to the maturity amount, increasing the educational fund. In case of a policyholder’s (parent) death, some nominees may also receive a terminal bonus, which enhances the maturity proceeds. We recommend exploring practical tips to select the best Child Education Plan for optimal returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Benefits of Investing in Child Plans\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Parents who want to secure their child’s future by systematically investing to aid their education & marriage funding must choose the right child plan. It has the following benefits:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Financial Safety Net\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Child plans are becoming popular because they provide two-pronged financial security. They help parents stick to systematic, routine savings to build a large enough fund to support their child’s major life goals, including education and marriage, without disrupting their retirement savings.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Insurance and Investment Combination\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Market provides numerous child plans with unique investment and insurance benefits for optimal returns. The right plan will help you accumulate and grow your investment while providing insurance and savings benefits to your child.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Tax Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Parents should consider investing in a Child Plan because it provides short-term and long-term tax benefits while securing their child’s future. For instance, the premiums paid toward child plans can be deducted u/s 80 C in ITR, up to a maximum of ₹1.50 lakh.\u003C/p>\u003Cp>Maturity proceeds are typically tax-free u/s 10 (10D) if the premium payment does not exceed 10% of the policy’s sum assured value or ₹2.50 lakh in any year during the policy tenure. Starting April 2023, this limit has been set to ₹5 lakh for non-linked plans. Death benefits are fully tax-exempt.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Money Growth\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Policyholders investing early can enjoy the power of compounding, resulting in higher returns on maturity. If investing in ULIPs, you can pick the right financial securities for potentially higher returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Additional Coverage through Riders\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The top plans designed to support education & marriage funding provide numerous riders to strengthen the policy coverage and benefits. For example, besides standard coverage, you can also invest in Critical Illness Coverage, Accidental Death Benefit Cover, etc. Not all insurers provide the same riders for similar types of Child Plans, so always check the plan page on the website for accurate information.\u003C/p>\u003Ch2>\u003Cstrong>How Can Child Plans Help With a Child’s Marriage Goals?\u003C/strong>\u003C/h2>\u003Cp>Investing in the best Child Plan for marriage such as \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/early-cash-plan\\\" target=\\\"_blank\\\">Shriram Life Early Cash Plan\u003C/a> can help you fulfil your financial obligations during your child’s marriage in the following ways:\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Long-Term Wealth Creation\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Child Plans typically have a long policy tenure of 15-20 years, which is ideal for building a substantial fund for the child’s marriage. The power of compounding over this extended period amplifies the wealth creation process, so you don’t fall short of the expected marriage expenses. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Protection Against Market Volatility\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Many Child Plans are market-linked, so that policyholders can invest a portion of their premiums in select financial securities, such as debt instruments, equity, or a mix of both, for potentially higher returns. Equity-linked returns are risky but they can grow at a rate much higher than the inflation rate, resulting in larger returns to support marriage expenses. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Maturity Options\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The best Child Plan for marriage always provides flexible maturity options, so the policy matures during the expected marriage timeframe. For convenience, policyholders can extend the policy tenure by a few years if their child doesn’t plan to marry during that period. \u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Flexible Liquidity\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Not all Child Investment Plans follow rigid payout, like lumpsum payment on policy maturity. Some plans also feature systematic withdrawal options so you can manage unexpected medical expenses or major property renovation without undue financial strain. \u003C/p>\u003Ch2>\u003Cstrong>How to Choose the Best Child Plan?\u003C/strong>\u003C/h2>\u003Cp>Your child’s future planning will remain incomplete if you don’t pick the right plan aligned with your specific financial goals. If you’re overwhelmed with the range of plans available, use the following tips to choose the right child plan to support education & marriage funding.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Start with a Clear Goal Assessment\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Every parent must calculate the estimated cost of education and marriage expenses, considering the growing inflation. Once done, look for plans with a sum assured and investment component that aligns with these calculated expenses.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Understand Policy Features\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Not every plan is designed the same, so parents must check and understand the plan-specific features to make an informed decision. The policy’s tenure, maturity benefits, lock-in period, inclusions & exclusions, and riders must also be evaluated. Always shortlist at least two to three similar plans and compare them critically to make the right choice. The same rule must be followed by choosing Protection Plans and other Savings Plans.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Check Premium Waiver and Other Benefits\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>The best Child Plan for education and marriage will provide a premium waiver as an in-built or additional feature so the child (nominee) can receive full policy benefits in the event of the policyholder’s (parent) death. Look for similar benefits to secure your child’s future fully, even when things don’t go as planned.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Compare Fund Growth and Returns\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>If you have a moderate to high-risk appetite and want to benefit from the market’s potential for greater returns, ULIPs will be a better choice. You can compare the shortlisted plans by analyzing their growth potential. Risk-averse parents must stick to traditional, non-linked plans for assured and risk-free returns.\u003C/p>\u003Cul>\u003Cli>\u003Ch3>\u003Cstrong>Consider Tax Implications\u003C/strong>\u003C/h3>\u003C/li>\u003C/ul>\u003Cp>Verify the plan’s tax implications to strategize investment and withdrawals for optimal tax savings. Check the latest guidelines u/s 80 C and 10 (10D) for proper planning. We recommend consulting with a professional finance planner for personalized guidance. \u003C/p>\u003Ch2>\u003Cstrong>Build a Substantial Education and Marriage Fund with Shriram Life Insurance \u003C/strong>\u003C/h2>\u003Cp>Whether you have a high-income job or multiple earning family members, it shouldn’t be used as an excuse not to invest in a child plan. Life is uncertain and the market conditions are unpredictable. Hence, investing in the best Child Plan for marriage and education will ensure your child’s future is secure, even when unfortunate or unexpected events occur. It will not only secure the child’s future, but also give you peace of mind and a sense of control, resulting in improved life quality. \u003C/p>\u003Cp>You can \u003Ca href=\\\"https://www.shriramlife.com/life-insurance/child-plan\\\" target=\\\"_blank\\\">explore the various child plans at Shriram Life Insurance\u003C/a>, like Shriram Life Assured Income Plan and Shriram Life Early Cash Plan because they provide several benefits: assured income, additional protection through riders, potentially higher returns, flexible payment terms, and more. If you’re exclusively looking for plans to support your child’s education, then our Shriram Life New Shri Vidya Plan will be a better 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