• Call Us: 8882755000
PolicywalasPolicywalasPolicywalasPolicywalas
  • Home
  • About Us
  • Life
  • Health
  • Motor
  • Travel
  • General
  • Contact Us

Pension Plan

What is Pension Plan?

Retirement could be a part after you wish to relax and revel in your life when continuous, long and hectic professional life. On the money front, your regular income also stops. Managing post retirement expenses might become onerous for you with growing inflation. Only 4% of the total working population of India is covered by a pension scheme, usually government employees. The remaining population is either salaried or self employed who do not have the provision of a formal pension scheme.

Ideally, life insurance covers the risk of “dying too early “ or “living too long”. Pension Plans being a locality of insurance product cowl the danger of living too long. Insurance firms give the twin edges of pension and insurance cowl beneath pension plans. Pension arranges facilitate people to plan for his or her retirement effectively and supply people with a daily financial gain for his or her post retirement years. Also, in the event of the death of the insured, the amount specified as per the policy is paid to your nominee. A retirement account helps you reach the money stability when your retirement. You need to infuse a specific amount of money during your working phase to build a corpus.

These plans are best for those planning a secure future. Retirement plans are a decisive way of safeguarding that your current lifestyle is maintained even after you stop working.

Get Quotes from

Why Should I Buy Pension Plan?

Lead an Independent Life

The days are gone, when retirees used to depend on their children or other relatives. Now, people are looking to lead an independent life and for this, there is a need for enough savings. You need to speculate providentially with the simplest programme that’s the simplest match.

To Get Dual Benefit

Pension plan offers a twin good thing about insurance and pension each, out of your endowed quantity towards the programme.

To Confront Inflation

Inflation has a double impact on your savings. Inflation affects your current buying power and conjointly augments money necessities for the longer term. Saving applicable quantity frequently towards programme can assist you confront the impact of inflation.

To Attain Surplus Funds

Investing with your employer-run pension scheme is a wise move, but unfortunately, the corpus it provides may not be enough to maintain your lifestyle post retirement. That’s why you ought to plow ahead to speculate during a programme.

Not Enough Govt. Schemes

Not all of the Indian population is covered under the social security schemes, and the schemes are also limited. Thus, there’s AN imperative have to be compelled to invest and purchase the simplest retirement savings account that may give you a corpus at the retirement to satisfy any contingency.

Increased Life Expectancy

Improved and easy access to the advanced medical and healthcare facilities has helped people to live longer. After the retirement, you also need to acquire enough savings to survive a good life. Pension plans cowl the danger of living too long.

What Kinds Of Pension Plans Can I Opt From?

There ar sorts of pension plans out there basis the subsequent parameters

1. Basis the Need Appetite

Basis the need and requirement, you may choose the annuity type out of immediate annuity or deferred annuity pension plan.

  • Immediate Annuity Plans: Under this plan, the annuity/pension commences immediately after the payment of premium in one lump sum. You will start getting your annuity/pension on an immediate basis after giving the lump sum amount to the insurer.
  • Deferred Annuity Plans: As the name suggests defer means to postpone, so under this pension plan, you pay the premiums for a specific time period as per your chosen retiring or vesting age. The money accumulated is then used to pay annuities that help you as a regular source of pension.

2. Basis the Risk Appetite

Basis the danger craving, you may choose to opt to buy either a traditional pension plan (low risk) or unit linked pension plan (high risk).

  • Ancient Pension Plans: Such set up|pension account|retirement plan|retirement savings plan|retirement savings account|retirement account|retirement program|plan|program|programme’s ar for people who ar trying to find a secure and secure come on the cash paid towards shopping for a pension plan. When you opt a traditional pension plan, your money is majorly invested in government bonds and securities by the insurer. The insurance firm pays a gradual come on your investment. In case you have a conservative approach and want your money to be safe, it is prudent to go for the traditional plans.
  • Unit joined Pension Plans: These plans ar market joined pension plans. For folks having the next risk craving, this is the ideal pension plan for them. Under this plan, the investment steering is in your hands and not in the hands of the insurer. You may make a choice from debt or equity or balanced fund for the expansion of your endowed quantity towards pension. The pension is paid out of the whole fund worth created at the top.

3. Basis the Need for Life Cover

  • Programme With Life Cover: once you select a programme with life cowl. You get insurance and pension profit along beneath one umbrella product. Premium paid can have the part of insurance (for life cover) and investment (for building the corpus for pension). So in the event of death during the policy term, the nominees will receive the sum assured opted under as life cover.
  • Programme while not Life Cover: once you select a programme while not life cowl, the premium you pay will entirely be utilized for the purpose of building a corpus for pension pool. In the event of the death of the client, your insurer will pay the corpus accumulated in the pension plan to the nominee. It does not provide any sum assured as such policies are without life cover.

Phases In A Pension Plan

Pension plans offered by insurance corporations give the twin advantages of investment and insurance. A pension plan includes two phases.

Accumulation Phase: during this part, you tend to invest and accumulate the wealth during the term of the policy. Your funds are invested in securities or other investment avenues as approved by the insurance regulator, IRDAI by the insurance company.

Distribution Phase: during this part, you tend to consume the already accumulated wealth. This part most likely begins at the time of your retirement. Some could opt to withdraw the cash even before their retirement.

How Is My Term Plan Premium Calculated?

Type of Plan

If you buy a pension plan with life cover, you need to pay higher premiums, as it provides additional benefits of insurance, the rate of premium charged by your insurer depend on the kind of set up and its advantages offered.

Policy Term

The tenure of your policy also matters. If the policy term is for a lesser period, you need to pay higher premiums to achieve a targeted financial goal at the maturity.

Age

The age once you begin investment with a programme conjointly plays a key role in deciding the premium quantity. The premium charged by your insurer would be higher at the advanced age as compared to one who begins investing at a younger age.

Sum Required

The amount you need in your retirement also plays a key role in determining the premium amount. Higher the add needed, a lot of is that the premium quantity and contrariwise.

What Are The Different Annuity/Pension Options

There area unit 5 annuity/ pension choices you’ll make a choice from.

  1. Annuity payable for Life: under this annuity option, the fixed annuity amount is paid to the annuitant throughout his/ her lifetime. The pension benefits cease after the death of the annuitant/pension seeker.
  2. Life regular payment with a come of Purchase Price: Upon selecting this selection, the annuitant receives annuity/pension till he/she is alive. In the case of death of the annuitant, the purchase price (maturity amount) is given to the nominees/beneficiaries.
  3. Life Annuity with a Guaranteed Period: With this chosen option, the annuity is paid for a guaranteed period or throughout your life (whichever is later). In the case of death of the annuitant, the annuity is paid for the guaranteed period like 10, 15, 20 years (as chosen by the policyholder/Annuitant) and after that, the annuity ceases unless the annuitant has mentioned to pay the annuity/pension to his spouse/nominee.
  4. Increasing Annuity: This option provides you with the increase in the annuity amount every year. It usually increases at a specified rate on annually to cater to the growing inflation.
  5. Joint life annuity: Under this option, the annuitant receives pension till he/ she is alive. In the event of death of the annuitant, his spouse is entitled to receive the pension.

What Are Some Smart Buyings Tips?

Following area unit a number of the key tips you’ll think about for investment in a very program.

  • Systematic & Early designing: Planning early for retirement are going to be useful in your favour as beginning early can alter you value effective program choices. Systematic investment towards program can alter you to accumulate a sturdy corpus by the time you’ll retire.
  • Appropriate Pension Amount: It is prudent to assess the appropriate amount of the annuity you would need to lead a comfortable living post retirement. Take into aspects such as inflation, increased living costs, elevating medical costs. Decide on your pension want considering your current mode.
  • Choose the Right Vesting Age: Opt for a pension plan with a vesting age that fits your needs. There area unit some pension plans with vesting age beginning at forty years. So if you would like Associate in Nursing financial gain stream that too soon in life, go for such a plan. On the other hand, there are plans with vesting age at 85 years, which is suitable if you plan to retire later.
  • Right Pension Option: Choose the apt pension plan with suitable pension options like Annuity payable for Life, Life Annuity with Guaranteed Period, Increasing Annuity or Joint life annuity, etc. meeting your requirement.
  • Use Annuity Payout Calculator: The annuity payout calculator displays how much pension you will receive in payment over a decided period of time. It has the provision to administer the inflation rate to the annuity payout calculator to get a fair amount of what the annuity payout will really worth over the time.

Is There Any Add On Cover/Rider With Pension Plan?

With a program, only a few insurer’s offer limited riders.

(Note:The rider profit, conditions and eligibility criteria may vary from insurer to insurer.)

What Is Not Included In The Pension Plan?

If a policyholder commits suicide within one year of commencement of a pension plan, no or limited benefits will be payable.

Pension Plan Insurance Glossary

Here are the basic terminologies related to pension.

  • Actuarial Present Value: It is the value of an amount payable or receivable on a specific date.
  • Annuity: A financial product wherein an investor has to provide a specific amount on a regular basis to a pension plan provider and in exchange, they assure you to pay the periodic payments usually monthly.
  • Annuity Plans: Plans which offer insurance and pension to cater to the post retirement expenses on payment of a such that premium to the insurer.
  • Asset Allocation: It determines however your funds are going to be endowed among totally different quality categories.
  • Automatic Investment arrange (AIP): It allows the investors to contribute tiny amounts at regular intervals towards the arrange. Funds are deducted automatically from the investor’s savings account or cheque and then invested in a retirement/pension account.
  • Commutation: it’s an area of your pension profit that you’ll take as lumpsum at the completion of your program tenure. Usually, one third of the total fund can be commuted as lumpsum.
  • Compounding: It refers to earning money on a principal amount. It is calculated on a monthly or annual basis. It helps to create wealth.
  • Contributory Pension Plan: A program whereby the worker makes contributions. In some plans, employers also make contributions to increased benefits.
  • Contingent Beneficiary: sometimes, the investor nominates their spouse as a primary beneficiary. But in the case, both the owner and spouse die due to a mishap, the plan benefits are then transferred to their children or maybe the trusts that are designated as contingent beneficiaries.
  • Deferred Annuity: this program, you pay the premiums for a specific time period as per your chosen retiring or vesting age. The money accumulated is then used to pay annuities that help you as a regular source of pension.
  • Defined Benefit Pension Plan: A pension plan wherein an employer promises to provide a fixed monthly benefit after retirement of the employee. Under this plan, the monthly benefit is defined on the basis of certain factors such as employee’s earnings history, age, and tenure of service.
  • Defined Contribution Pension Plan: This arrange provides pension advantages to the worker for services rendered. This plan provides an individual account for every participant and it also defines contributions to an individual account. An individual’s profit depends on the quantity contributed and therefore the investment performance of that program.
  • Immediate Annuity: Under this plan, the annuity/pension commences immediately after the payment of premium in one lump sum.
  • Life Annuity Payment: There are several options available to an annuitant when it comes to receiving payment after the retirement. Under the Life Annuity payment option, the payments continue throughout the life of the annuitant.
  • Life Expectancy: It refers to the average time one is expected to live.
  • Primary Beneficiary: It refers to a person or entity who is named by the owner of the retirement plan to receive the plan benefits in the event of his/ her death.

Pension Plan

Kotak premier pension plan

Know More

ICICI Pru Easy Retirement

Know More

ICICI Pru Easy Retirement SP

Know More

Kotak premier life plan

Know More

About Policywalas

POLICYWALAS is a Registered Trademark with
VAGMI RESOURCES PVT LTD.

IRDAI License No. CA0602.
Established in the Year 2018 and has managed to reach out to a major number of customers across the country within a short span of time through our dedicated and convenient services.

Life

  • Term
  • Child Plan
  • Pension Plan
  • ULIP
  • Endowment Plan

Location

  • 320, Tower C, I-Thum Business Park, Sec.62, Noida, Uttar Pradesh -201301
  • salessupport@policywalas.com
  • Call: +91 120-6870867
  • Monday-Saturday: 10am to 6pm

Social Media

  • Facebook
  • Instagram
Copyright 2019 by POLICYWALAS. | All Rights Reserved
  • home
  • About Us
  • Life
  • Health
  • Motor
  • Travel
  • General
  • Contact Us
Policywalas