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Difference Between Guaranteed and Assured Returns

Guaranteed return and assured return plans may seem similar but have unique differences. Read here to know the differences between guaranteed and assured returns in simple terms.

  • Dec 05, 2022

Investments are essential for garnering returns for financial benefits over some time. An insurance policy is necessary for ensuring financial security for individuals and their family members to tackle uncertain life events.

Before purchasing any insurance plan, the policyholder must be aware of essential insurance terminologies. For example, many people mistakenly believe that guaranteed and assured returns are interchangeable. They do, however, differ in a few ways.

Assured returns do not depend on the capital resource health, and if a bank declares itself bankrupt or does not have funds to pay off the investor, no benefit will be provided to the investor. However, under guaranteed return plans, the investor must be provided with all the benefits irrespective of the bank’s financial state. Therefore, it is essential to consider the consequences and potential rewards before making an investment decision.

Let us understand the difference between the two insurance plans to help you comprehend what would be the best insurance plan for your family

What are Guaranteed Returns?

Under the terms of guaranteed return insurance, the bank gives the investor all advantages regardless of their capital resource basis. Because they are immune to market volatility and provide guaranteed return plans over time, they are ideal for long-term investments. Therefore, investing in assured returns is recommended for individuals with established and unchangeable life goals, such as retirement, children’s education, or marriage. If you’re looking to buy a policy and want to invest with assured returns, you should consider the main life milestones you want to reach and add your debts while figuring out the cover amount.

Advantages of Guaranteed Returns

1. The procedure is simple, quick, and hassle-free, ensuring you are insured as soon as possible.

2. It is the ideal risk-free investment that is yours, regardless of the state of the market.

3.Guaranteed return insurance gives investors various payment options, including yearly, semi-annual, quarterly, and monthly payouts.

Disadvantages of Guaranteed Returns

1. The guaranteed amount is typically lower than the assured return since the bank tries to reduce the risk component to prevent insolvency.

2. Guaranteed returns have high premiums.

While buying a life insurance plan under guaranteed returns, consider the start dates, lower guarantees, accuracy, convoluted phrases, and other non-participatory programs.

What are Assured Returns?

Similar to Guaranteed returns, the insurance company also provides assured returns regardless of the state of the market. The investor will still get the claim they are entitled to, even if the market performance is below par.

This assured benefit, however, has no bearing on the insurance company’s financial situation or the condition of its capital resources. The investor is not entitled to receive any benefits if the bank files for bankruptcy or does not have sufficient funds. Small banks frequently provide assured returns in place of guaranteed return plans in this situation to prevent going bankrupt.

Advantages of Assured Returns

1. The life insurance policy’s value increases over time, and the guaranteed amount is entitled to an increase.

2. In this case, the danger is minimal if you select a reputable bank.

3. You can request compensation when submitting a complaint if the bank is denying your claim and is in good financial standing.

Disadvantages of Assured Returns

1. The danger is very significant when investing with a tiny bank.

2. You might not get the guaranteed return if the bank has an unstable track record.

3. The likelihood of your candidates’ death claims or maturity benefits getting rejected is considerable.

Difference between Guaranteed and Assured returns

Some of the distinctions between guaranteed returns and the sum promised are listed below:


Guaranteed Returns

Assured Returns

Risk factor

Guaranteed returns plans have a minimal risk element because the returns are independent of market volatility.

The reliability of the insurer or bank you have selected will determine the risk factor in assured return plans.

Return potential

In comparison to secured return plans, the amount you can receive through guaranteed return plans is rather less.

In assured return plans, as the financial worth of your insurance policy increases over time, your returns will also climb. The amount you receive is, therefore, more.

Claim rejection probability

Your odds of having a claim denied are essentially nonexistent with guaranteed return policies. This is because only reputable and well-organized businesses offer guaranteed return policies.

A sum-assured return plan may reject your claim depending on the institution’s financial stability. You can always move to court if your claim is denied because of their financial stability.

Even though assured returns have a higher risk than guaranteed returns, customers still prefer them because of the higher return possibility. While your guaranteed return insurance may increase in value as your insurance coverage expands, your claim may be turned down if the institution is not in good financial standing.

These are the main differences between the two insurance terms. It is important to weigh their advantages and disadvantages while selecting a strategy. The risk you wish to accept when choosing a savings plan cannot always be evident initially, so you should know it is essential to choose the best plan.

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  • Increasing Life Cover*
  • Guaranteed^ Maturity Benefits
  • Enhanced Protection Through Riders
  • Tax Benefits
  • Dual Benefits: Guaranteed^Maturity + Death benefits

Ref. No. KLI/22-23/E-BB/999


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  • Enhanced Protection Through Riders
  • Life Cover
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  • Guaranteed @ Loyalty Addion
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Ref. No. KLI/22-23/E-BB/490


- A Consumer Education Initiative series by Kotak Life

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