Why women should invest in guaranteed-return plans

Guaranteed return life insurance plan is the way out

Financial independence is key to achieving one’s life goals, such as buying a house, planning a foreign vacation, child education or marriage, repaying loans, and more. In the context of women in India, financial independence still seems like a faraway dream for many. On one hand, the participation of Indian women in the workforce increased by 2.3 per cent - from 22.8 per cent in 2020 to 25.1 per cent in 2021. While on the other hand, a report by the Bill & Melinda Gates Foundation also revealed that despite the rising female labour participation in the country, many Indian women are still predominantly dependent on their families when they need money. This says a lot about the vast dichotomy among India’s women, particularly in the context of financial independence.

The right kind of financial literacy, guidance and planning can help reduce this gap. One of the ways is to know what kind of financial products to invest in. Guaranteed return plan is one such instrument that can help women achieve their financial goals, offering the dual benefits of wealth creation along with life insurance cover.

Also Read: How to plan finances from your first job

Reasons to invest in guaranteed return plans

A guaranteed return plan is a kind of life insurance plan that gives you two primary benefits in one product - namely, a life cover and guaranteed returns. The life cover is valid for a specific period, known as the policy term. At the end of this period, the policyholder receives assured payouts if they have survived the policy term. Although it is fairly simple in the way it functions, such plans can help women achieve the goal of financial independence. Here’s how:

Guaranteed risk-free returns:A portfolio consisting solely of high-risk investments may not be ideal, particularly for new or risk-averse investors. Guaranteed returns life insurance plan can help reduce or offset any existing portfolio risk because they offer assured returns at maturity.

Women who are on the path to attaining financial independence can benefit from this risk reduction. It helps preserve the capital invested in the savings plan. Additionally, the amount of maturity payouts due under the plan is also mentioned upfront, making financial planning much easier.

It promotes financial stability: One of the key reasons women in many parts of the country find it hard to secure their finances is the lack of stability in their earnings. But even with an unstable income, women may save a lump sum amount over time and invest the funds in a single premium guaranteed returns life insurance plan, which helps to bring in some consistency and assurance to the financial situation of the policyholder. This is beneficial because stability is one of the most important aspects of financial independence. With the lump sum payouts from the plan at maturity, women who have invested in such products can take care of their own financial needs without having to rely on their spouses or their children.

It helps in making post-retirement goals easier to achieve: With more women joining the workforce in recent years, retirement planning becomes crucial for achieving their post-retirement life goals. By timing the policy tenure to match their retirement age, women can benefit from guaranteed lump sum payouts or regular, periodic payouts from such plans. These funds can help policyholders take care of their day-to-day financial requirements that come after retirement.

Conclusion

See how one financial product can bring women several steps closer to taking control of their finances? If you know a woman in your life who is on the journey to financial independence, or if you are on this path yourself, consider investing in a guaranteed returns life insurance plan today. Its benefits are far-reaching and comprehensive, and it can lay the foundation upon which you can build a financially secure future for yourself and your family.

(The author is Chief Distribution Officer – Institutional, Bajaj Allianz Life)