Get up to 6% return by investing in a guaranteed return

Guaranteed Return Plans work for those who prefer the risk-free route and certain returns for their investments. These schemes also work for those investors who have a long-term horizon.
According to Vivek Jain, Head Investment, Policybazaar.com, “plans are offered by the insurance companies in which all you need to do is pay a fixed premium on a monthly or yearly basis during the 
plan’s tenure.

After the policy matures, you start receiving 100% guaranteed returns on your investment. You can choose to opt for lump-sum benefit or recurring income for your payout. The payout depends on the premium you paid, the insurance coverage you chose, and the duration for which you made premium payments. Under these plans, you can choose to receive payouts for a fixed number of years or go for lifelong income. Moreover, you get the flexibility to choose to receive the income on an annual basis rather than on monthly basis.”

According to an official statement from Policy Bazar, since such schemes help in creating a guaranteed corpus along with the benefit of insurance coverage, it is a good idea to allocate a part of your portfolio to such schemes to hedge against volatility in the rest of your portfolio. Moreover, as long as returns on FDs remain low, Guaranteed Return Plans come out as a viable choice to save for the long-term.