Assured Income Plan: Features, Benefits & Best Plans in India

Quick Overview

An assured income plan is a life insurance savings product that pays you a guaranteed income at regular intervals. It provides life cover during the policy term and returns a lump sum or premium refund at maturity. Regulated by the Insurance Regulatory and Development Authority of India (IRDAI), these plans suit people who want a predictable income, no market risk, and family protection. That said, "no market risk" doesn't mean zero risk. Ideally, your money is safe, but it isn't growing. While the income is guaranteed, a fixed payout does not stretch as far 15 to 20 years down the line due to inflation.

Your salary won't last forever, but your expenses will continue. Early retirement or a family emergency can leave you financially stranded if you haven't planned.

That's where an assured income plan can help. It combines guaranteed payouts with life insurance. However, the catch is that payouts are fixed, so a ₹30,000 monthly income today won't be much 15 years from now. Moreover, this plan doesn't automatically adjust for inflation.

So before you decide if this is the right fit for you, in this article, we'll discuss what an assured income plan is, how it works, its benefits, and how to pick the right plan.

What Is an Assured Income Plan?

An assured income plan is a non-linked, non-participating life insurance savings product. In simple words, you pay premiums for a set number of years and get life cover throughout the policy. On top of that, after the policy term ends, the insurer pays you a fixed income at regular intervals (monthly, half-yearly, or annually) and a maturity benefit.

Quick Clarification on What’s Not an Assured Income Plan

Unit-Linked Insurance Plan (ULIPs): These plans invest in market funds and carry investment risk.
Annuity Plan: Annuities are plans where you pay money to receive a regular income for the rest of your life. They come in two types: ones that start paying you right away (immediate), and ones that start paying later (deferred). However, neither gives you a lump sum at the end.
Pension Plan: Pension plans focus purely on building a retirement corpus over decades.

Assured income plans have no market exposure, run for a fixed term, start paying you soon, and return a lump sum at maturity.

How Does an Assured Income Plan Work?

Premium Payment Phase: Premium payment can be single-pay or limited-pay, depending on the plan, and may range from a few years to 15 years or more. The shorter the payment term, the higher each premium will be.

Accumulation Phase: Some plans have a waiting period between when you stop paying and when the income starts. However, not every plan has this step, so always check the policy-specific documents.

Income Phase: The insurer starts paying you a guaranteed income at the frequency you chose, monthly, quarterly, or annually. The amount is locked in when you buy the policy. This phase can last anywhere from 8 to 30 years, depending on the plan.

Maturity Benefit: Once the full policy term ends, you receive a lump-sum payout. Depending on the plan, maturity benefits may be a lump sum, return of premiums, sum assured plus guaranteed additions, or another predefined payout.

Death Benefit: In case of death during the policy term, your nominee receives the death benefit. It can be paid as a lump sum, as income, or through multiple settlement options for the nominee.

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Key Features & Benefits of Assured Income Plans

Life Cover Throughout the Term

Your family is protected during the entire policy tenure. If you pass away during the term, your nominee receives the death benefit. The structure varies by plan and may include the applicable sum assured, guaranteed additions, or other predefined benefits as per the policy wording.

Loan Against Policy

Once your policy acquires a surrender value, you can take a loan against it. The surrender value for each corresponding year is given in the benefit illustrations.

Tax Benefits

Premiums paid are eligible for deduction under Section 80C of the Income Tax Act, 1961 (old regime), and the maturity proceeds may be exempt under Section 10(10D), subject to applicable conditions.

Rider Options

Many plans offer add-ons like Accidental Death Benefit, critical illness riders, or Step-up Income rider for additional protection.

Important: At Ditto, we recommend buying a term plan for family protection and investing separately in market instruments like Fixed Deposit and National Pension Scheme (NPS) for wealth building. This is because premiums for assured income plans are significantly higher than term plans. The life cover amount is minimal compared to what a term plan provides. The returns, once you account for the time value of money and inflation, are not competitive.

Popular Assured Income Plans in India & How to Choose

Plans	Premium Payment Term	Income Period	Maturity Benefit	Standout Feature
Shriram Life Assured Income Plan	8 to 15 years	Equal to the policy term chosen	Assured income payouts and a lump sum option are also available	Death benefit paid as income, lump sum, or 50-50 split based on the nominee's choice.
HDFC Life Guaranteed Income Insurance Plan	3, 5, 6, 7, 8, 10, 12, or 15 years	Minimum: 3 years, Maximum: 40 years	Sum assured paid on survival, along with the due installment of guaranteed income at the end of the policy term.	The death benefit stays active during the income phase. The nominee can take it as a lump sum or as 110% of the death benefit paid across 60 monthly installments.
ABSLI Income Assured Plan	5,7, or 10 years	15, 17, 20, 22, or 25 years, depending on chosen premium tenure	Option A: Sum assured + guaranteed additions. Option B: Sum assured + guaranteed additions + boosted accrued income	Two income options: monthly or accumulation, receive a boosted lump sum at maturity: 137.5% to 175% of accrued income, depending on policy term.
Bajaj Life Assured Wealth Goal	Single / Limited / Regular pay options	10, 15, 20, 25, or 30 years; lifelong income (till age 99) also available	Return of Premiums (ROP) at the end of the income period	Six plan variants, including step-up income (+10% every 5 years) and a joint life option
ICICI Prudential Life Insurance Guaranteed Income For Tomorrow	1 (single pay), 5, 6, 7, 8, 10, or 12 years	5 to 13 years, depending on the option	Discounted value of future income paid as a lump sum on maturity	Early income option: income starts from the 2nd policy year itself

Note: All plan details are sourced from respective official websites. Before buying any income assured plan, download the assured income plan brochure and ask for the benefit illustration. Check payout start date, guaranteed income amount, surrender value, and maturity value before deciding.

How to Choose the Right Plan?

Start With Your Goal

Are you planning for retirement income, children's education, or a regular cash flow during a career break? Match the payout period to when you'll actually need the money.

Check the Internal Rate of Return (IRR)

IRR measures the annualized return on premiums paid. This tells you the effective annual return on your money.

Claim Settlement Ratio (CSR)

CSR tells you the percentage of claims an insurance company has successfully paid during a specific period to the total number of claims available to settle during that time. Anything above 97% is a good sign of reliability. As a starting point, you can check our detailed guide on the top term insurance claim settlement ratio.

Premium Payment Flexibility

Some plans allow limited pay terms (like 5 or 7 years), so you pay less frequently but still receive income over a longer period.

Who Should Opt for an Assured Income Plan

If steady, predictable income is a priority.
Your Life cover is already taken care of because this plan doesn't need to double up as your main insurance
Certainty matters more than higher returns. Fixed payouts in exchange for peace of mind work for you.

Who Should Be Careful While Opting for The Plan

Sole earners who need large life cover, since the insurance component here may not be enough to protect your family.
Those looking to cater to inflation because fixed payouts lose value over time, so this isn't a wealth-growing tool.
Anyone who may need money soon. If you might need funds within 3–7 years, this plan offers very little flexibility.

Note: There is no single best assured income plan for everyone. The right choice depends on your payout timing, premium term, life cover needs, liquidity preference, and expected return.

Why Choose Ditto for Term Insurance?

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Ditto’s Take

An assured income plan is a good pick for someone who wants a structured income stream for a defined period. But it has real limitations. Inflation reduces the value of a fixed income, and the life cover included is lower than what a dedicated term plan at a better premium would provide.

A better approach is to buy a pure term plan separately. Then invest in instruments like Public Provident Fund (PPF), National Pension System (NPS), low-cost mutual funds, and Fixed Deposits (FDs), which offer you the choice of both market-based and fixed returns. An assured income plan can still make sense as a supplementary tool for someone who is already covered with a solid term plan. But it should not be a substitute for term insurance.

As a first step, consider reading our guide on how to choose term life insurance.

Frequently Asked Questions

What is the difference between an assured income plan and a Fixed Deposit (FD)?

A fixed deposit pays interest on a lump sum and does not include any life cover. An assured income plan pays you a guaranteed income at regular intervals and provides life insurance protection throughout the policy term.

Are the payouts from an assured income plan taxable?

For policies issued after April 1, 2023, maturity proceeds are tax-exempt under Section 10(10D) only if the annual premium is ₹5 lakh (across all life insurance policies) or less and does not exceed 10% of the sum assured. Death benefits remain fully exempt regardless of the premium amount.

Can I surrender my assured income plan early?

Yes, most plans allow surrender after a minimum number of premiums have been paid, typically 2 to 3 years. However, early surrender usually results in a lower surrender value, and you receive less than what you put in. It's best to stay invested for the full term to maximize benefits.

What happens if I miss a premium payment?

Most plans offer a grace period of 15 days for monthly premiums and 30 days for other premium modes. If the premium is still unpaid after that, the policy may lapse or continue with reduced paid-up benefits, depending on the plan.

Is an assured income plan good for retirement planning?

It can be a good supplementary retirement tool, especially for people who want a guaranteed income alongside their NPS, PPF, or Employee Provident Fund (EPF) corpus. However, unlike pension or annuity plans, assured income plans have a defined payout period.

Last updated on: 6 Apr, 2026