Most of us spend a lifetime earning money and trying to save enough for retirement. However, we are always confused about what to choose between lifelong and long-term income. The returns generated from investment plans are utilized for a specific target.
This means the returns should be in alignment with your financial goals. Given the number of options in insurance, there is a feature, which allows you to decide the frequency of returns and volume of the same. With the help of this feature, you can choose between long-term and lifelong income. This is a crucial decision to make. You need to understand both the options before selecting any one alternative.
This means the returns should be in alignment with your financial goals. Given the number of options in insurance, there is a feature, which allows you to decide the frequency of returns and volume of the same. With the help of this feature, you can choose between long-term and lifelong income. This is a crucial decision to make. You need to understand both the options before selecting any one alternative.
What is lifelong income?
In the lifelong income option, you will be entitled to receive income regularly until the age of 99. You can secure your life with this option. Under this alternative, if you invest in an income plan for a specific period, once the plan matures, you receive regular monthly payouts until you are 99. This plan is ideal if you are not saving for a specific goal but are looking for regular, consistent income after a specific number of years.
What is long-term income?
The long-term income option will provide you with the benefit of guaranteed income for a specific term. This term period varies from ten to 12 years. This means that you will receive regular payouts for the term of the policy. This income option will provide you with coverage to fulfill your financial obligations for a certain period.
Difference between lifelong income and long-term income
It is important to identify the pros and cons of both the plans before making a decision. The advantage of a lifelong income plan is that you will receive the guaranteed payouts for a lifetime. There is a factor of assured returns here. However, if you require funds to meet a financial goal, the lifelong income alternative will not be adequate. Since the funds will be tied up throughout the plan tenure, it might not be possible to withdraw the funds. You might have to look for alternative income sources. Hence, if you have immediate fund requirements, it might not suit your needs. When it comes to a long-term savings plan, your investment remains fixed for a specific number of years and you earn a return on the same. The funds can be used for any purpose at the end of the tenure.
Both the plans serve as a mode of regular income, which cannot be considered as short-term or long-term financial cover. They offer benefits that ensure regular income for a long period or for a lifetime. You need to consider your financial goals and fund requirements before making a decision. When you make the right choice, you can grow your wealth and achieve long-term goals.