Pension Plans

An Annuity (Pension) policy is an insurance contract between the insurance company and the Policy holder (Annuitant) wherein the insurance company offers to pay a guaranteed income to the annuitant for life and in some cases even to the nominee of the policy in the event of the unfortunate death of the annuitant during the annuity period. These policies are mostly sought after by non-salaried class and people who cannot avail pension benefits from the Companies post retirement.

Why an Annuity (Pension) Plan is essential?

• Regular Income post retirement: It is important to have a regular income stream during your twilight years, post retirement, to take care of your day to day needs and maintaining your lifestyle
• Interest Rate Risk: The annuity rates are fixed at the time of taking out the policy and this helps the annuitant to plan his future expenses without worrying about falling interest rates. This is more relevant in today’s times wherein interest rates are continuously on the decline.
• Reduce financial dependency: Annuity policy helps in reducing your financial dependency on your near and dear ones. You can achieve financial freedom not only for yourself but for your spouse too.

Features of Annuity (Pension) Policy

• Provides safe investment option without having to worry about bank interest rate fluctuations. The annuity rate is guaranteed for life.
• Annuity policy offers you all round flexibility :

Premium Payment – Monthly, Quarterly OR Annually

Accumulation Period – You can accumulate the Corpus over a particular period and then start receiving annuity on the accumulated corpus. This is known as Deferred Annuity OR you shall start receiving the annuity immediately from the next month / quarter or year. This is called as Immediate Annuity.

● Premium payment for an Annuity Plan qualifies for Tax Deduction under Section 80 CCC, however the annuity payments received by the annuitant is considered as part of salary and is taxed as per the applicable tax slab at the time of receiving the annuity payments.

*Subject to change depending upon Government policies.