We can compare your current insurance coverage against a variety of insurance companies to find out who offers the best deal.
We will also review your current coverage and advise you if we see that you are either over-insured, under-insured, or if we have other recommendations for your specific situation.
In today’s day and age, people start planning for the retirement life at an early stage so that at the later stage they do not have to depend on others to make their ends meet. In case you want to opt for a Pension Plan, ensure that the plan you choose has the following features:
The annuity is the most distinctive feature of a pension plan and generally comes in two types, immediate annuity and deferred annuity. As the name suggests, immediate annuity starts immediately. The insurance company pays the pension plan annuity amount right after receiving the lump sum premium. Immediate annuity pension fund comes with the option of single premium payment so that the insurance company can use the amount invested by the policyholder to build up a corpus for him or her.
The deferred annuity pension plan starts paying a certain sum after a few years. The insurance companies offer a diverse range of plan options for different terms that allow the policyholder to choose the period for which they want to receive the annuity.
If you are looking forward to retirement planning, then, zero in on the best pension plan in India by keeping in mind the annuity offered by the pension scheme and the premium charged by the policy.
The sum assured is a pre-defined amount offered to the insured during the tenure of the policy. The sum assured amount is generally offered as death or maturity benefit under with cover pension plan. The sum assured amount is determined by the insurance companies in a different way. Under some pension scheme, the sum assured amount is determined as 10 times of the annual premium paid, while others may offer a sum assured that equals the fund value of the policy opted by the individual. In case, there is no sum assured, then the plan is more in the nature of a pure pension plan rather than an insurance plan with pension scheme.
The investors can either choose to pay the premium at one go as lump-sum investment or in periodic intervals. The premium invested is simultaneously accumulated over a long-term period in order to create a financial cushion for the future. The accumulation period in a pension scheme is described as the time from which you start investing until the time you invest. For instance, if you start investing at the age of 30 years and you continue to invest until you turn 60, then the accumulation period of the pension plan will be 30 years. Your pension for the chosen period majorly comes from this corpus.
Age is the age when the investors begin to receive the monthly pension. For example, most of the pension plans keep their minimum vesting age at 45 or 50 years. The vesting age in a pension scheme is flexible up to the age of 70 years. However, some of the insurance companies allow the vesting age to be up to 90 years of age.
The payment period, as the name suggests, refers to the period during which the investor starts receiving the payments post-retirement. For instance, if an individual receives a pension from the age of 60 years -75 years, then the payment period of the pension plan will be 15 years. In most of the pension plan, the accumulation phase is kept separate from the payment period. However, some pension schemes offer the option of partial or full withdrawal during the accumulation period as well.
Here are different factors that should be considered while purchasing a Pension Plan:
While planning for retirement, it is very important to keep in mind the monthly expenses. After retirement, the regular source of income is cut-off. Thus, in order to keep up with the regular monthly expenses of the family, it important to create a financial corpus big enough to take care of all these expenses. Apart from the monthly expenses, it is important to allocate ample fund for the post-retirement unexpected financial emergencies.
While purchasing a Pension Plan, it important to keep in mind the growing inflation rate and plan accordingly that how much corpus will be sufficient enough to maintain a financially secured lifestyle after retirement.
There is no way to correctly predict how long an individual will live. Thus, while purchasing the best pension plans your retirement fund should be suf ficient enough to support your financial needs during the old age.
Young people often tend to ignore the future medical expenses. However, when one gets old, they may have to spend a bomb on medical check- ups and treatments. Thus, it is very important that your Pension Plan should provide you with an adequate fund to deal with any type of medical emergencies.
Another important thing that you should consider while purchasing the best Pension Plans is your outstanding loans and current assets. In case you have any outstanding loans, then repay off these loan(s) on time. If you fail to repay the loan(s) on time then it can take away a chunk of the annuity income.
It is crucial that you understand how much you need to sustain yourself and your dependents after your retirement.
Read through the pension plan details in depth to understand what you are signing up for. The pension details in the pension scheme will offer information on the periodicity of your income, how much is guaranteed, how much is dependent on market performance etc.
There are various retirement plans available in the market. Shortlist the ones that will fulfill your financial expectations.
Do not stick to a Retirement Planning solution just because someone says so. One product that suits your friend may not suit you. Look up the provident funds, or pension funds offered by the asset management companies and those offered by the insurance companies to get what you need.
Consider tax benefit as a secondary benefit instead of a primary benefit. If you opt for a retirement plan, considering only the tax benefits, you might not be able to build up the corpus you need for your retirement. So, do your retirement planning calculations and choose a plan accordingly.