(Retirement) Pension Plans

pension plan

Pension plans, also known as retirement plans, are investment plans that accumulate a portion of your savings over a period of time to allocate you and provide you with a steady income after retirement. Even if a person has a good amount of savings, The pension plan is still important.Savings run out very quickly and are useful to use in emergencies, so it is essential to have the best pension plan that helps you secure your cash flow to meet the daily post-retirement needs.. A right pension scheme lets you plan for retirement in stages. So it is advisable to choose the best pension plan that can act as a savior in your golden years.

Types of Pension Plans in India

In India, there are these types of pension plans

(Retirement) Pension Plans 1

deferred annuity

This pension plan allows you to accumulate wealth through regular premiums. Pension will start only after the expiry of the policy term. The benefits of deferred pension schemes are large. Includes tax benefits, there is no tax on the money invested in the scheme unless it withdraws it. This plan can be purchased by making regular or one-time payments. Thus, this scheme is suitable for all types of investors.

Immediate Annuity

In this scheme, the pension starts immediately. You have to deposit a lump sum and the pension will start immediately. You can choose from a series of available annuity options. In addition, the premium paid has been exempted according to the Income Tax Act, 1961. In the case of the policyholder, the nominee/beneficiary will be entitled to receive the money as per the selected option.

A few annuity options preferred by many people are:

Annuity Certain / Guaranteed Period Annuity

The regular payment is paid to the annuitant for a particular number of years as per this clause. The annuitant has the right to settle on the period and just in case he/she dies before exhausting all the payments, the regular payments are going to be paid to the beneficiary/ nominee. As per this plan, the annuity is given to the life assured for sure periods like 5, 10, 15 or 20 years whether or not or not he/she survives that period.

Life Annuity

As per Life annuity option, the pension amount is paid to the receiver till his/her death. However, if you decide on the ‘with partner’ the amount of pension is given to the spouse of the policyholder (in case of death).

With cover and without cover Pension Plans

The pension plans with cover have a life cover element within the plan and state that a lump sum amounts are paid to the family members on the death of the client. the cover amount here isn’t high, as a serious part of the premium is diverted towards growing the corpus than covering the risk of life. On the other hand, while not cover pension plan states that there is no life cover. And, just in case of unfortunate death, the nominee/beneficiary of the policy can get corpus accumulated (premiums paid until the date of the death).

National Pension theme (NPS)

The NPS was introduced by the government for individuals to make up the pension amount. However, you’ll place your savings in the new pension scheme where your money is invested with in equity and debt market as per your preference. Also, you’ll withdraw 60% of the amount at retirement and rest 40% is accustomed to purchasing the annuity. Note: Maturity amount is not tax-free.

(Retirement) Pension Plans 2

Pension Funds

Investing in Pension funds may be a good possibility as these plans stay effective for a long time and additionally provide higher returns at maturity.

Best Pension Plans in India

Aegon Life Guaranteed Income Advantage Insurance Plan

Key Features of Aegon Life Guaranteed Income Advantage Insurance

Aegon Life Insurance Give you Guaranteed Income Advantage, as participating plan it takes a part in profits of the company and offers a bonus at the end of policy term as company term and conditions.

After the policy period ends, the policyholder is paid an annual payment up to the age of 85.

The bonus is paid at maturity only during the premium payment period.

If the policyholder dies due to any reason, the bonus is paid

Benefits of Aegon Life Guaranteed Income Advantage Insurance

After the policy period ends, the policyholder is paid an annual payment up to the age of 85.

On the demise of the insured during the policy tenure, higher of the sum assured or 10 times the annual premium, along with the bonuses accrued before or after the completion of Premium Paying Term is paid out to the beneficiary.

The plan offers income tax benefit under which the premium paid and the claim received is exempt from income tax deduction as per section 80C and section 10(10D)of the Income Tax Act.

Bajaj Allianz Retire Rich

Bajaj Allianz Retire Rich is a unit-linked pension plan that comes with guaranteed vesting and death benefits. The plan comes with the following features:

Flexibility to pay a top-up premium.

Premiums paid are eligible for tax deductions under section 80C of the Income Tax Act, 1961. Death benefits, maturity benefits, and surrender value are eligible for tax benefits under Section 10(10D) of the Income Tax Act.

Flexible premium payment term.

SBI Life – Annuity Plus

SBI Life – Annuity Plus gives you the freedom to choose annual options with a single premium payment. Thus, assuring you of regular annuity/pension for the rest of your life.

This retirement scheme offers –

Security – through steady retirement income

Reliability – fixed annuity/pension throughout your life

Flexibility – comprehensive range of annuity options

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