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Be financially Stable Post Retirement with Retirement and Pension Plans.
Retirement and Pension plans are categorized under life insurance plans. These plans fulfill your post-retirement needs, such as unexpected medical expenses and the desire to have a healthy life. Also, these policies let you manage your finances and secure your future to let you enjoy after-work years better with financial independence.
Your retirement plans help you and your spouse to receive and enjoy a continuous and stable pension plan for life.
You can also avail the tax benefits under section 80C on the premium paid up to a limit of ₹ 1.5 lakh. Moreover the pay-out that you will receive at the time of maturity will be tax-free.
A majority of the insurance companies and their related pension plans, help the children to receive a lump-sum amount in your absence.
With retirement and pension plans, you also get the flexibility to choose the premium payment term. You can select your premium payment term depending upon your financial goals.
These retirement plans help you to get a fixed or guaranteed income to help you with your retirement planning. Not only this, you might get an option to provide the income to your spouse in case of your untimely death.
Best pension plans in India have a similar type of eligibility requirements. Some basic eligibility criteria include:
The plan might be able to offer regular income throughout the policy term or post the insured parent’s death without the liability of paying further premiums.
Since the parent insured buys the plan for securing the financial future of the child, there should not be a burden on the surviving parent to pay premiums for policy continuation.
Availability of a rider like the Term rider, allows the parent to get additional Sum Assured equal to the policy Sum Assured with a nominal amount of extra premium.
These retirement plans help you to get a fixed or guaranteed income to help you with your retirement planning. Not only this, you might get an option to provide the income to your spouse in case of your untimely death.
If the child is hospitalized due to a medical condition or accident, these plans allow you to withdraw a lump sum amount from the yet-to-mature policy. This pay-out will act as an add-on to your health insurance plan.
As per the existing tax laws premiums paid towards child plans are exempted under section 80C of the Income Tax Act. Maturity benefits are also exempt from tax as per section 10(10D) of the Act.
There are generally 4 types of pension plan available to make your retirement relax and stress-free:
Regulated by Pension Fund Regulatory and Development Authority (PFRDA), the National Pension Scheme or NPS is a popular option if you want to receive a regular pension after retirement. With NPS, you can contribute to a pension account during your working life. Your funds are invested in a mix of debt and equity markets as per your choice. Once you are 60 years old, you can withdraw one part of the investment as a lump sum amount and use the remaining for purchasing an annuity which will guarantee a regular income.
PFRDA has authorized as many as six companies to offer pension funds in India. Pension funds require you to invest a fixed amount for a fixed duration in a fund of your choice. The fund providers generally offer many different types of funds to suit different investors. Your investment increases with the increase in the value of the fund. After retirement, you can withdraw the entire amount or remain invested and receive regular income.
An annuity pension plan is of two types- immediate and deferred. In immediate annuity plans, you pay a lump sum amount and instantly start receiving an annual or monthly annuity. With deferred plans, you invest a lump sum amount or make regular payments for a fixed duration. The annual or monthly annuity is only received after a particular term. The annuity payment can be either for a fixed period or for a lifetime in both plans.
These plans offer the dual benefits of life insurance and investment. One part of your premium is reserved for life insurance, and the remaining is invested in a fund of your choice. On maturity, you can withdraw the entire corpus at once or receive regular payments. If you die during the policy term, your nominee will receive the death benefit. So, starting early is important for a well-funded retirement. You will be better placed if you start your investment planning early in your financial life and keep investing regularly.
