What is Pension Insurance Plans – Types, Benefits

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Most of the people in India do not prepare for their retirement, they stop only when their body stops working. The reason for this can be either low level of education or their income will not be enough that they can save some money for their retirement.

But by using the information we are going to give you in this article, each one of you can plan your retirement life. As you must have understood by reading the title that today we are telling you about pension plans. By using which you can live the rest of your life comfortably.

What is Pension Plan?

Friends, as the name suggests, this plan is for those people who want to cover their life after their post retirement. This plan helps you to keep your post retirement life financially secure.

If you also want to make your own retirement plan, then there are many such pension plans available in the market. All these are almost different from each other, their benefits, features and exclusions are all different.

Basically a pension plan is basically an investment or savings plan that fulfills your retirement needs in future. All the pension plans available in the market have been divided into two parts.

In the first part, those pension plans have been kept, where the insured pays the premium. The same makes references (refers) as a second distribution.

Under all this, a yearly limit income will be provided to the insured at the time of your retirement. Yearly plan is a form of insurance plan, which pays a limit income from the beginning. The rest depends on the features of the plan you have chosen.

Types of Pension Plans in India

What is Pension Insurance Plans: Friends, now we all know that the main goals of pension plans are to lead you a peaceful and comfortable life during your post retirement days. Fulfillment of all your financial aspirations in the days of your post retirement is also one of its main objectives.

The main goals of all types of pension plans are to provide you peace, comfort and security during your retirement days. But there are many types of pension plans provided by differents insurance companies. for example –

Cover and without Cover Pension Plans: If you take cover pension plans, then you are also given “Life Insurance” in it. Under this, the insurance company gives a lump sum amount to the family members on the death of the insured person. The same if you take pension plans without cover, then you are not given “life insurance”. In such a situation, if that person dies, then the entire amount of premium along with interest is given to his family members.

Immediate Annuity: In this pension plans you have to deposit a lump sum amount. Your pension starts immediate (immediately) as soon as you deposit the lump sum amount. But, in this, your pension depends on how much you have deposited the lump sum amount. Under the Income Tax Act 1961, you get tax benefits on the amount paid as a premium. After the death of the insured, his nominee is compensated on the basis of yearly option.

Deferred Annuity: In this pension plans you can pay your entire premium in one go or it gives option to pay through regular premium. Then after that your pension starts after the completion of the policy period. In this also you are given tax benefits, apart from this, as long as you do not withdraw money in an emergency condition. Till then all your amount is tax free which is a benefit.

Top pension plans in India

Company NamePlan NameType of PlanEntry AgeMaturity AgePolicy TermPPT
LICLIC’s New Jeevan ShantiNon-linked, Deferred Annuity30-79 years31-80 yearsNASingle
HDFC LifeHDFC Life Click 2 RetireMarket-linked18-65 years45-75 years10-35 yearsRegular, Limited, Single
SBI LifeSBI Life Saral Retirement SaverTraditional savings18-65 years40-70 yearsMax: 40 yearsRegular, Single
ICICI PruICICI Pru Easy RetirementMarket-linked18-70 years30-80 years10-30 yearsRegular, Limited
Max LifeMax Life Guaranteed Lifetime Income PlanImmediate/Deferred AnnuityImmediate Annuity: 0-80
Deferred Annuity: 45-80 years
46-90 yearsNASingle
Bajaj AllianzBajaj Allianz LongLife GoalMarket-linked18-65 years99 years99 minus entry age10 – 25 years
Kotak LifeKotak Premier Pension PlanTraditional savings30-60 years45-70 years10-30 yearsRegular, Limited, Single
ABSLIABSLI Empower Pension PlanMarket-linked25-70 years80 years5-30 yearsRegular
Tata AIATata AIA Life Insurance Guaranteed Monthly Income PlanNon-linked, Traditional6-60 years65-68 years5,8,12 years5,8,12 years
IndiaFirst LifeIndiaFirst Life Guaranteed Annuity PlanDeferred life Annuity40-80 yearsNANASingle

Note: All the details of the products have been directly fetched from the official websites of pension plan providers. The list should not be considered definitive, given that benefits and annuity payouts vary as per individual factors such as age, gender, income, sum assured/investment and market volatility (in case of ULIPs).

Features of Pension Schemes in India

What is Pension Insurance Plans: Pension plans play a very important role in deciding what kind of retirement life an individual will lead. Therefore, it becomes very important to know more and more about these schemes.

Here we will discuss the major features of pension plans available in India.

Guaranteed monthly income

Most pension plans provide a fixed income upon your retirement. Plans like Immediate Annuity allow you to get monthly or yearly income as soon as you invest. Pension can be paid either for a fixed period or till death. The same totally depends on the type of plan you choose.

Tax benefits

The most important feature of the pension scheme is its tax saving nature. Many such plans offer tax exemption of 10% to 40% under Section 80C of the Income Act. The tax exemption depends on the plan you choose. It is always advisable to start your retirement planning early so that maximum tax benefits can be availed.

Implicit age

The vesting age is where you start receiving monthly pension. The minimum age of vesting in most plans is 40 to 50 years and the maximum vesting age is up to 75 years. Among the vesting ages, one can decide at what age you want to start receiving pension

Surrender value

Each plan has a maturity date. It is very important to wait for the completion of the maturity date of the plan you have purchased so that you can get the maximum benefit out of it. There are times when you still want to surrender due to some unforeseen emergencies, the same can be done and you will still get the surrender value of the same provided the plan has crossed the minimum period.

This facility is available only in pension plans which include life insurance plan benefits.

Death benefit

Many pension plans come with a death benefit. This means that after your death, your policy nominee gets the benefit. There are plans that offer both retirement benefits and life insurance cover. These plans usually offer more death benefits than any other traditional pension plans.

The above mentioned features will help you choose a retirement plan as per your retirement goal and investment potential. Source- https://scripbox.com/

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