A pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum

Pension Plans are individual insurance plans that impact your future by providing financial stability during old age when it is needed the most. Pension plans are suitable not only for senior citizens, but anyone planning for a secure future.

The common use of the term pension is to describe the payments a person receives upon retirement, usually under pre-determined legal and/or contractual terms. A recipient of a retirement pension is known as a pensioner or retiree.

Retirement plans may be set up by employers, insurance companies, the government or other institutions such as employer associations or trade unions. The plans are typically in the form of a guaranteed life annuity, thus insuring against the risk of longevity.

With an increasing number of young Indian professionals moving away from traditional joint family structure, parents have realized the need to be careful for their retirement years & have financial security. Pension plans are their best friend offering a comprehensive long term financial plan for retirement years.

Insurance companies offer various pension plans (also called as retirement plans or annuity plans) where a person has to initially invest either a lump sum amount or regular annual installments/ premiums over a period of time in return for regular income either for life or for fixed number of years depending upon the plan.

Deferred Annuity Plan:

Under this type of plan, the pension is not paid immediately but deferred for a time period as required by policyholder. If the policyholder survives the term of the policy, then the accumulated amount (consisting of sum assured, guaranteed additions and bonuses) is invested to generate regular income.

Immediate Annuity Plan:

This plan can be purchased for a lump sum in return for fixed payments throughout life. Insurance companies offer various options under annuity plans. There are different categories of Immediate Annuity plans:

Annuity Certain:

The insurance company pays a fixed sum of money for a certain number of years.

Guaranteed Period Annuity:

Under this plan, insured will be paid pension for a certain number of years as stated in his/her plan (say 10 years) even if he/she does not survive this period.

Life Annuity:

Policyholder will be paid a specified amount regularly through her life. This plan also comes with the option of 'return of purchase price' to the beneficiary upon the policyholder's death. In case policyholder opts for this plan, her nominee will get the maturity amount plus any bonus upon her death.

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Benefits

      Regular income post retirement
      Tax benefits as per prevailing tax laws
      Take care of increased medical expenses
      Benefits of compounding effect
      Provides a minimum guarantee


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