help plan for retirement and offer the security of insurance.
Planning for the old age when the ability to earn diminishes while the expenses to live a dignified and healthy life start rising is of utmost importance.
A lot of companies and consultants offer a host of financial products so that you save enough money for the golden years of your life. However, the rising costs ensure that no amounts of savings are enough to meet the daily expenses.
Also, savings are depleted fast in case of an emergency. This is where you need to factor in the pension plans.
Investing in a pension plan is to give yourself a gift in the old age: a gift in the form of money that will help you to meet routine expenses as well as manage any medical emergencies with your head held high!
We are her to help you choose the best pension plan! Just start your comparison at easypolicy.com!
Any resident or non-resident Indian between the ages of 18 to 55 years can buy a pension plan.
The documents that you need to produce while buying are:
Pension Plans come with distinctive features, which help to frame a policy specially meant for people who wish to plan for old age and do not want to depend on anyone for financial needs in later years.
Here are the most important features of pension plans you must know and understand:
Sum Assured Insurance Cover
Sum assured is part of particular pension plans that come with attached insurance cover. This sum is offered as life insurance to the pension plan buyer, which comes in handy in the scenario where the buyer needs to provide for the dependent family in their absence. The sum assured can be 10 times the premium amount or a lump sum fund value of the policy bought. It depends on the choice of pension plan taken. The advantage of this feature is security for family and a stress-free life.
Immediate and Deferred Returns (Annuity)
All pension plans come with an annuity attached: deferred or immediate. Based on individual requirement, whether you need funds immediately or after a certain age, you can buy pension plan accordingly. In case of immediate annuity, the insurance provider will pay the pension plan amount immediately after receiving the single lump sum premium. In case of deferred annuity, the insurance provider will start paying a certain amount only after a few years. The advantage of this feature is that you get to choose as per your foreseen needs.
Surrender Value Plan
If, for any reasons, you need to surrender the plan, the insurance company will pay a certain amount, that only if the minimum period premiums are paid. This surrender value is not of great use as the rest of the benefits such as life cover etc. become void. Also, the surrender value feature is added only with insurance based plans where there is a provision of creating a corpus of funds. With sole term plans, this feature is not available. If you foresee a reason to surrender, you may opt for insurance based plans with corpus accumulation. This brings the advantage of getting some amount back in case you cannot carry on the plan or cannot pay future premiums.
These features help you to understand your requirement of a pension plan. Now go ahead and buy the most suitable one, only at easypolicy.com!
Pension plans are an absolute gift when it comes to financial independence post retirement. A carefully studied and selected pension plan can help you enjoy your old age without worrying over money matters.
Easypolicy presents the benefits of a pension plan that make life easy and comfortable after retirement:
1) Income Guarantee After Retirement
These plans offer you guaranteed income post retirement, when your salary is not available to you. You can avail this income either monthly/quarterly/half-yearly or annually depending on your requirements. Whether you buy deferred annuity plans or immediate annuity plans, the income is secure and guaranteed.
2) Investment Returns With Fixed Amount Guarantee
As per the guidelines issued by Insurance Regulatory and Development Authority of India (IRDAI), the insurers are mandated to offer positive no-zero returns. Complying with the orders, the insurance companies now offer a minimum of 1% returns on investment. This way you’re assured of returns and your investment will not lead to any losses.
3) Takes Care of Your Family With Death Benefits
Not only a pension plan pays you regular income when you’re alive, it also ensures that your nominee receives death benefits in case you pass away. These benefits can also include any bonuses, if applicable. Your family can use the lump sum death benefit pay-out for many major expenses.
4) Choice of Investment In Different Pension Plans
Every buyer or investor comes with a different preference and limitation to invest. Some may prefer aggressive portfolios offering various benefits, while others may just want moderate or conservative ones, helping the basic needs. A host of retirement or pension plans offer the options of choosing the underlying funds. Depending on the options you chose, the returns and pay-out amounts will vary.
5) Tax Benefits On Pension
The Section 80CCC of the Income Tax Act offers you a tax deduction towards premium for pension plans. The deduction allowed is up to a maximum amount of Rs. 1.5lakhs in a financial year.
Start your search now, at easypolicy.com, to reach the best suited pension plan for your coming years.
A basic pension plan may not suffice for your critical needs. You may want to avail some additional benefits with the regular pension plan. These additional benefits are offered by insurance providers at some additional premium cost and are known as Riders.
Here are the types of riders you can choose with your pension plan:
Accidental Disability Rider
If the insured suffers a permanent or partial disability in an accident, during the term of the plan, the insurance company will pay an amount equal to or less than the rider sum assured. However, pay-out terms and conditions vary from company to company. Some companies offer a disability benefit only in case of permanent disability. Some offer a percentage of the rider sum assured depending upon permanent or partial disability.
Term Benefit Rider
This rider is similar to term life insurance. If the plan buyer dies during the term of the plan, then the rider sum assured is paid to the nominee. Since, this is a pure insurance product; therefore, it comes at a lower additional premium. For this reason, insurance providers put a limit to the maximum sum assured under this rider.
Critical Illness Benefit Rider
This rider brings the benefit of a lump sum amount provided to the beneficiary in case he is diagnosed of a critical illness. This amount is equal to the rider sum assured. Usually, insurance providers stipulate an upper limit to it
Waiver of Premium Benefit Rider
In the case, where the plan buyer faces a critical illness or physical injury and is unable to pay further premiums, this rider helps to wave off the premiums till the insured is ready to pay again. If the insured dies during the term, the policy remains in force even in the Auto Cover Period, and payments due in the auto cover periods are also waived. This must be informed that Auto Cover Period is duration of two years for which the policy continues, if the insurer is not able to pay the premiums. But, the auto cover period comes in force only if two years' full premium is paid.
Accidental Death Benefit Rider
This rider is a protection against accidental death. In the unfortunate event where the policyholder dies in an accident, the rider sum assured is paid to the nominee, appointed by the policyholder. This is in addition to the sum assured of your base term policy.
Hospital Cash Benefit Rider
This is a useful rider in case of a sudden hospitalization is faced by the policyholder, due to an injury, sickness or critical disease. A small amount is paid daily to take care of the hospital expenses. This is valid for a hospitalization of more than 2 to 3 days. It can be a percentage of room charge in hospital or a set amount for daily hospital cash, whichever is lower. There is a set limit to the benefit under this rider. This rider comes in force only after 2-3 months of policy being alive.
There is a catch here. If the policyholder claims this rider along with critical illness rider, the insurance company may not provide against hospital cash and only pay against critical illness rider. In such case, the further additional premiums for hospital cash rider are waived off.
Pension Plans are important for all those who look forward to a safe and financially secure future!
They serve as crucial instruments that facilitate financial stability in the retirement years. They also replace the insurance plans while providing the life coverage for old age. The best part of pension plan buying is that they are funded by your salary if you are in a job, or through your income if you are self-employed or in business. This means, a certain amount of your earnings are systematically saved and stored for your future.
There are other reasons that describe the importance of pension plans. Let us go through them to gain clarity.
They Are Important Because They Help To Develop A Saving Habit
As we know that usual pension plans are long term investments. You are required to pay small periodical premiums to build a large corpus of funds which is available to you in your retirement years. If you do not invest in a pension plan, you may or may not save otherwise. But, a pension plan ensures you are taking out a chunk of money and saving it purposefully for your secure future.
They Are Important Because They Brings Gains from Compounding
The investment made is compounded over the years in form of rate of interests on investments. Therefore, the longer you stay invested in an investment instrument, the more you gain. Pension plans can be launched as early as 20 years and the compounded returns by the age you are ready to retire, say around 60, you will have a substantial amount in your pension account, to live a happy and comfortable life.
They Are Important Because They Offer a Flexible and Scalable Investment Plan
The most important factor about pension plans is that they offer options of investment based on your investment and risk appetite. Based on your need of returns, immediate or deferred, you can choose your investment form, be it aggressive (large and small period investments), balanced (medium and periodical investments), conservative (small one time investment). Also, you have the option to switch between debt based and equity based instruments, based on the market changes and personal needs & preferences. Pension plans are long-term financial planning where personal, financial and economic conditions will demand such flexibility in changing circumstances.
They Are Important Because They Offer Life Cover Too
Along with the investment instrument and the financial security that they offer in later years, with-cover pension plans offer a life insurance component too, which keeps the family and dependents financial needs safe, in case of demise of the policyholder. Through the insurance-led pension plans one can secure the future for self and provide for the family in their absence. The dual benefit makes pension plans very important investment of life.
Here is a clear comparison with or without pension plans:
|With Pension Plan||Without Pension Plan|
|Financial Future||Secured||Not Sure|
|Corpus of Funds||Available||Not Available|
|Old Age Dreams||Fulfilled||Not Fulfilled|
|Life Cover||Available||May or May Not Be|
|Flexible Investment||Yes||May or May Not Be|
|Flexible Returns||Yes||May or May Not Be|
Once you have understood the utmost importance of pension plans, you must reach the best pension plan suited to your distinctive investment and financial needs. Here at easypolicy.com, you can compare and buy the best pension cum investment plan.
Each individual has different needs pre and post retirement. Therefore, the pension plans come in various forms too, with different features, which can take care of your individual needs. Usually, pension plans differ on the basis of annuity (regular or lump sum returns) that they offer to the policyholder.
Here are the types of pension plans you can choose from, depending as per your financial planning before and after your retirement.
Immediate Annuity Pension Plans
In this type of plan, your returns start immediately as soon as you make the investment. A lump sum premium is required to be paid to the insurance provider and as per that premium; a set amount is available to the policyholder. In case the policy holder dies, his/her nominee shall receive the payable amount over the stipulated duration. The premiums paid for the immediate annuity plans are tax exempted, under Income Tax Act, 1961. These plans are suitable if you have a portion of spare money to be invested suitably.
Deferred Annuity Pension Plans
As the name suggests, the returns are not immediate, they are deferred for a later period, which is called pay-out or payment period. The policyholder is allowed to accumulate a corpus over a term by paying regular premiums or a single lump sum premium. This period of paying premiums is called accumulation period. Once the accumulation term is over, the returns in form of pension are received by the policyholder. The premiums paid (regular or one time) are exempted of tax. Deferred Annuity Plans are suitable for both kind of investors, the one who want to invest systematically and periodically, and the ones who have an amount to be invested in one single go.
With Cover Pension Plans
These pension plans come with a life cover component. This works as a term insurance plan, where a lump sum assured against life cover is paid to the family members, if the policyholder dies during the term of the plan. Do not take this lump sum amount as substantial, because, usually the major part of premium for such plans goes towards building the corpus of pension funds. Hence, the life cover component brings a nominal amount as returns. As per current trends, Deferred Annuity Plans come with life cover. This is a good plan to invest, and save money on term insurance.
Without Cover Pension Plans
There is no life cover component with such plans. The nominee of the policyholder receives the corpus accumulated over a period of time, till the death of policyholder. As per current trends, insurance providers offer Immediate Annuity Plans without life cover. You can buy this plan if you already have a separate life insurance policy.
Annuity Certain Pension Plans
Here the return (annuity) is paid to the policyholder for a certain number of years. It is up to the policy holder to choose that period of payments. If, in any case, the policyholder dies within those years, then the annuity is paid to the beneficiary nominated by the policyholder. One can nominate children or grandchildren to receive the benefits.
Guaranteed Period Annuity Pension Plans
Under this plan, the policyholder receives the returns for a set number of years such as 5, 10, 15 or 20. These limits are set by the insurance provider and one of them is chosen by the policyholder. It is irrespective whether the policyholder remains alive for the chosen years, the annuity is offered for those years only.
Life Annuity Pension Plans
Choosing this plan, makes the policyholder entitled to annuity until his/her death, and entitles the spouse to receive the annuity after the policyholder dies. This is a very important plan if you wish to secure the financial future of your spouse, especially in old age.
National Pension Scheme (NPS)
This is a pure government initiative to facilitate the citizens of the country who wish to build pension funds. Under this pension scheme, one can invest the savings in equity or debt based instruments, as per the preference. Out of the entire maturity amount, one can withdraw 60% to take care of regular needs, while the remaining 40% must go into the annuity. The receivable maturity amount under NPS is not tax free.
Investing in a good pension plan will prove to be the most sensible step of your financial planning. These plans ensure a secure future in late years of life and also help to save money systematically.
PFRDA (Pension Fund Regulatory And Development Authority) has allowed 6 private companies to sell and manage pension plans.
Retirement planning is crucial! Everyone wants a comfortable and secure old-age where they do not have to worry about funds in hand for basic needs and comfort. A good retirement plan helps to fulfil the needs in the age when we are not able to work.
What makes all this possible are the Pension Plans chosen carefully, and each pension plan proves to be successful only if the returns are just what one expects.
Now, the question is how to determine the returns? What are the factors that affect returns on pension plans?
Here are some very important factors those if considered can help you to choose the correct pension plan for you.
Annuity Option Chosen
Based on the annuity option you choose; deferred or immediate, your investment on pension plans will bring returns to you. For example, in a deferred plan, the funds are accumulated first in accumulation period and you can withdraw in payment period, in a lump sum, quarterly or yearly based on your requirement. In an immediate plan your returns start immediately as soon as you pay the one time premium. The returns are affected as per your choice on annuity.
ULIP Pension plans are based on debt or equity. Therefore, there is a component of market risk involved which may affect your returns. The performance of financial and securities market, going up or down, will equally affect your returns. For example if the large component of your pension investment was sent to stocks, and if the price of the stocks you invested in, go high, you will garner higher returns, and vice versa.
Retirement depends on what you want, and when you want. According to retirement research, saving 15% or more of your income, starting from an early stage for 10-20 years in your career can ensure that you save enough to retire comfortably at 60. Retirement plan does not mean saving higher amount; it is also possible to save substantial by investing a small amount systematically, starting from young age.
Invested Period And Withdrawals
The period for which you remain invested directly affects your returns. The longer the period, the greater are the returns. In case you need to withdraw from your investments to supplement for your needs, you can withdraw 1/3rd amount from the vesting corpus amount. For example, if you are collecting 10,00,000 vesting corpus amount as your retirement plan/saving then you can withdraw around 3,00,000 from the corpus vesting amount, for immediate needs.
Good Credit Habits
Even if you have been diligent about building a solid foundation of retirement income, good credit habits are an important part of the retirement equation. Balancing unnecessary debt during your retirement can have high-interest payments with a limited cash flow.
Taxes On Investments And Returns
Often, the effect of taxes on your pension plan investments and returns are missed out. Taxes can significantly reduce the corpus you have available for you when you retire. So it is important to be aware of how your pension plans are taxed. Though pension plans provides the tax benefit of U/S 80(C), you should be aware that the pension received is Taxable. Not all the premiums paid and withdrawals made are tax exempted. For example, some income, like interest, is taxed at ordinary income tax rates.
When planning for your retirement and investing in a sound pension plan, it is important to consider these common factors that can affect your returns largely.
Around the retirement age, the mounting challenges to lead a peaceful life are huge. Especially with the income drop and increasing expenses of medical care!
That is the time when a sound investment plan will come in handy and save you from all the trouble of low finances.
Understand with clarity why you should invest in a pension plan:
Guaranteed Stream of Income
Pension Plans offer a regular income. As per the Insurance regulatory and Development Authority of India (IRDAI), the insurance providers are bound to provide a no-zero return on all premiums or guaranteed maturity benefits attached with pension plans. In order to adhere to this, insurance companies offer a guaranteed return of 1% of total premium over the complete policy term.
Post Retirement Years Are Taken Care Of
After you get retired, you require better medical care, which needs adequate funds. With a pension plan and regular income coming in, you can look forward to a healthy life your post-retirement and take care of other necessary expenses.
Pensions Offered By Employers Are Not Sufficient
Employer companies offer a standard pension provision which may overlook your individual needs. Therefore, you must invest in a separate pension plan, keeping in view your actual requirements.
Social Security System Does Not Exist In India
The concept of social security, which is prevalent in many foreign countries, does not exist in our country. This means that government will not be available to take care of your particular needs in old age. Therefore the onus lies on you to invest in pension plans and secure your later years.
It Generates A Corpus of Funds
While you are still earning, you can start investing in a good pension plan, to accumulate a corpus of funds for life goals and family responsibilities, at the time when you are unable to work and earn.
Investing in Pension Plans is important because they sustain life in weaker years and fulfil your dreams.
There is a range of pension plans available in the market. Make a good comparison at easypolicy.com and buy a pension plan now!
When you can’t earn anymore or don’t want to earn anymore, it is a better idea to make your money earn for you by investing sensibly!
Pension plans investments do exactly that by ensuring that you receive substantial income in your golden years without having to step out of your house!
However, you need to be smart enough to invest correctly in a pension plan for it to offer hefty returns.
Here are the important tips you need to keep in mind when it comes to buying or investing in pension plans:
1) Start Early
2) Start Small
A pension plan is your friend, companion and support in the later years of life. Check all the investment plans at easypolicy.com and invest wisely!
The decision and choice to invest in pension plans is a complicated process for most people.
But, Easypolicy is here to make the process smooth and easy for you.
Here's how we do it:
1) It Is Effortless
Surfing Easypolicy website for information has been kept absolutely user-friendly and simple so that you can sail through it without any trouble. Whatever information you require about the pension plans, it is easily available and presented in an easy to understand manner supported by expert advice.
2) It Provides Quick Access
Easypolicy values your time and therefore it is our endeavour to provide you every bit of information as fast as possible. Also, to make things even clearer, all information is up to date so you can take well-informed decisions.
3) Assistance With Processing Of Claims
We will not only help you to buy an insurance policy, but will also help you to understand the entire claim process and even guide you during filing of the claims and the processing of the same.
4) Uncomplicated Formalities
To dispel the most common perception that buying pension plans require complicated paperwork, Easypolicy brings to you simplified procedure of filling up forms. Not only the language is easy to understand, there are experts, who will guide you during every step of the process.
5) Facility To Collect The Documents
We understand you have busy schedules and deadlines and that’s why we offer you the option of picking up necessary documents from your home and delivering it to the concerned insurer within mandated timelines.
6) Tracking The Policy From Start To Finish
With Easypolicy, you can be assured of getting up to date information about your pension plans. Right from the time you buy it, till you file a claim for it, we will keep a track of every little detail and will even remind you about paying premiums.
7) Special Features At Your Service
Everyone has different needs and priorities and we totally understand that. That’s why we help you sort down the requirements, through as many filters as possible, and provide you with specific information about pension plans that meet your criteria.
Easypolicy is your one stop shop for getting all answers and investing in all kinds of pension plans! Start now!
Buying your pension plan online is the wisest thing to do, as it saves a lot of time, effort and paperwork.
Here is how you can buy your pension plan online in few easy steps.
At easypolicy.com, we make insurance buying very easy for you. We are your #1 trusted partner, when it comes to effective solutions related to insurance products.