Choose the Best Pension Plan for a Secure Future

What is a Pension Scheme? A pension scheme/ retirement plan help you anticipate budgetary security for your old age. A Pension scheme provides you the benefits of both insurance and investment. There are various pension plans that help the senior citizens foresee financial stability, so that they can enjoy the best things in old age.

How does a Retirement Plan Work? A retirement plan works in 2 phases:  Accumulation phase:  During this phase, you pay premiums, the money accumulates through the tenure of the plan.  The accumulated money is then invested in IRDA approved securities  Vesting phase/ annuity phase:  The age at which you choose to start receiving pen  sion /payouts from the kitty.  You can also withdraw up to 33% of the accumulated amount in one go. The rest is paid as pension.

Features of Pension Plans  Pension plan let you accumulate money over a period of time and provide you with steady income that helps you secure your cash flow for meeting basic daily needs post retirement.  The pension plans have minimum guarantee, generally about 1% of total policy premium. They also provide you guaranteed maturity benefits  You can also withdraw up to 33% of the accumulated amount in one go. However the rest of the amount is taxable.

Types of Retirement Plans  National Pension Scheme (NPS)  Deferred Annuity  Immediate Annuity  With Cover and Without Cover Pension Plans  Annuity Certain  Guaranteed Period Annuity  Life Annuity

Deferred & Immediate Annuity Plans  Deferred Annuity: Such plans let you through regular premiums or single premium over a policy term. Once the policy term is ended, pension will begin.  Immediate Annuity: Such pension plans let you deposit a lump sum amount, pension begins immediately.

With Cover and Without Cover Pension Plans:  The "with cover" pension plans implies a lump sum amount is paid to the family in case of demise of the policy holder  The "without cover " pension plan don’t provide any life cover. In case of demise of the policyholder, only the corpus built till date is paid.

Annuity Certain & Guaranteed Period Annuity  Annuity Certain: In such pension plans annuity is paid to the annuitant for specific period chosen by the policyholder. In case of demise of the policyholder annuity will be paid to beneficiary.  Guaranteed Period Annuity: This pension plan implies that annuity is given to the assured for certain periods whether or not he survives that duration.

Life Annuity & National Pension Scheme  Life Annuity: This pension plan implies that pension amount will be paid to the annuitant until death. If he has chosen the with spouse option, then pension will be paid to spouse after his death.  National Pension Scheme (NPS): Such pension schemes let you invest in equity & debt. Up to 60% of amount can be withdrawn at the time of retirement with rest 40% annuity must be purchased.

Best Retirement Plan Providers in India  Aviva India Aviva India  HDFC  SBI  LIC  ICICI  Bajaj Allianz  Exide Life etc. Choose an apt retirement plan for a secured and prosperous future.

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