GRIP Insurance is a popular savings plus protection policy that offers financial security to policyholders while also helping them achieve their long-term financial goals. This policy provides a guaranteed maturity benefit, death benefit, guaranteed additions, and loyalty additions, making it a reliable option for individuals who prioritize stability and security.
Coverage of GRIP Insurance
GRIP Insurance provides coverage for the person assured’s life, ensuring financial protection for their loved ones in case of their untimely demise. The guaranteed payment of the maturity benefit of the policy will take place once the term of the policy has been completed.
In the event of the death of the policyholder, the nominee receives the death benefit, which is the sum assured along with any guaranteed and loyalty additions. Guaranteed additions are paid annually, while loyalty additions are paid at the end of the policy term.
Benefits of a Guaranteed Return Insurance Plan (GRIP)
The benefits of a Guaranteed Return Insurance Plan (GRIP) are:
Maturity Benefit
One of the key benefits of the Guaranteed Return Insurance Plan (GRIP) is the maturity benefit. When the policy comes to an end, the person who holds the policy has the right to receive the sum assured. The amount of money that is guaranteed to be paid out to the policyholder once the policy term has expired is referred to as the sum assured. A loyalty booster is something that the policyholder is entitled to receive in addition to the guaranteed amount of money.
When the term of the policy comes to an end, the maturity benefit is increased by a loyalty bonus that is equivalent to twenty-five percent of the sum assured. This means that the policyholder receives a lump sum payment at the end of the policy tenure, which can be used for various purposes, such as funding education or retirement.
Basic Sum Assured
It is important to note that the Basic Sum Assured paid is between 55% and 85% of all the premiums paid. This means that the policyholder is guaranteed to receive a certain amount of money at the end of the policy tenure, irrespective of the performance of the underlying investments.
Accrued Guaranteed Additions
Another major benefit of the Guaranteed Return Insurance Plan (GRIP) is the Accrued Guaranteed Additions. Under guaranteed additions, the policyholder is entitled to receive 10% of the Basic Sum Assured accumulated at the end of every plan year till the whole policy tenure. This means that the policyholder receives a guaranteed return on investment every year, which is a major advantage.
Death Benefit
On the policyholder’s unfortunate demise, Guaranteed Return Insurance Plan (GRIP) pays the sum assured and guaranteed additions to the nominee. The sum assured is the higher of the loyalty booster and basic sum assured, or ten times the annualized premium, or 105% of the total premiums paid till the death date of the policyholder.
This is paid to in-force policies only. Once paid, the policy terminates immediately. This means that the policyholder’s family is protected in case of any unforeseen circumstances.
Surrender Benefit
In addition to the above-mentioned benefits, the Guaranteed Return Insurance Plan (GRIP) also provides the option of surrendering the policy. If the policyholder wants to cancel their insurance before the policy has been in effect for two years, they will not receive any benefits. However, after two years, the policyholder is entitled to receive the Guaranteed Surrender Value (GSV).
The GSV is calculated as [GSV factor* (Sum Assured+ Loyalty Booster)]total premiums paid or it can be GSVAccrued Guaranteed Additions. Therefore, the policyholder has access to funds in the event of a financial crisis.
Understanding Non-linked and Non-participating Plan
GRIP Insurance offers a non-linked and non-participating plan that provides stability and security. As the name implies, a non-linked plan is one whose policy returns are not connected to the performance of the stock market or any other market. In a non-participating plan, the insured person does not share in the insurance firm’s financial success.
The advantages of a non-linked and non-participating plan are that the policyholder is protected from market volatility, and the returns on the policy are guaranteed. Those looking for a safe investment with guaranteed returns will find this policy to be an excellent choice.
Flexibility in Premium Amount and Frequency
GRIP Insurance provides flexibility in choosing the premium amount and frequency. The premium amount is the amount the policyholder pays towards the policy, and the premium frequency is how often the policyholder pays the premium.
The advantage of choosing the premium amount and frequency is that the policyholder can customize the policy according to their financial goals and budget. This policy is suitable for individuals who want to invest in a policy that aligns with their financial needs and preferences.
Comparison with ULIP Plans
Unit-Linked Insurance Plans (ULIPs) are another type of insurance policy that provides both insurance coverage and investment options. Investment returns on ULIPs are connected to the success of the stock market in which the policy invests.
While ULIPs provide higher returns, they also come with higher risks. On the other hand, GRIP Insurance offers a guaranteed return, which provides stability and security to the policyholder. If you prefer a guaranteed return investment option with low risk, this policy is for you.
Take Away
GRIP Insurance coverage provides financial security and stability to the policyholder. The non-linked and non-participating plan offers guaranteed returns, and the flexibility in premium amount and frequency allows the policyholder to customize the policy according to their financial goals and budget.
While ULIPs may provide higher returns, they also come with higher risks. Therefore, it is crucial to choose the right insurance plan that suits your financial goals and risk appetite.
