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
- Pension plan is an investment tool that helps you to save money for your post-retirement life
- After the term of the plan is over, the insurance company pays you monthly income for a pre-decided period of time to meet your financial requirements apart from paying a substantial amount as lump sum.
- This ensures you have a steady income flow even during your old age and you will never be dependent on others for your monetary needs.
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!
Eligibility to Buy Pension Plans!
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:
- Photo Identity Proof
- Address Proof
- Crossed Cheque of First Premium Payment or Online Transfer Availability
- PAN Card
- Date of Birth Proof
Key Advantages and Features of Pension Plans!
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:
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!
Benefits of Pension Plan!
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:
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.
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.
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.
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.
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. 1.5 lakhs in a financial year.
Start your search now, at easypolicy.com, to reach the best suited pension plan for your coming years.
Riders (Additional Benefits) That You Can Avail With Pension Plans!
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.
Accidental Disability Rider
The younger you’re, the lower will be the premium. Young people are less likely to die, therefore considered to be less risky by the insurance providers. For example; a person at the age of 25 buying insurance policy will have to pay lower premium than the person buying at the age of 50
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
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.
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.
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.
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.
Riders always strengthen your basic pension plan. Make sure you choose your riders as per your significant individual needs.
Importance of Having Pension Plans!
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.
|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.
Types of Pension Plans
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.
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.
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.
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.
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.
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.
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.
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.
Factors That Affect Returns On 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.
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.
Why You Should Invest In Pension Plans!
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:
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.
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.
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.
It Helps To Pursue A Relaxed Life
Post retirement, when you no longer want to work, but enjoy a relaxed life, follow some ambitions such as travelling to places, or pursuing a hobby, funds returned from pension plan will become a large support. Hence, investing in a pension plan is a must in your young years. 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!
Tips To Invest In A Pension Plan
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:
- Starting early has its benefits since you get more time to make your money grow. Pension plan investments grow based on the compounding effect and the longer these plans stay invested in the equity markets, better are the returns.
- The volatility of the markets gets nullified over a long term period so that by the time you retire, your investments would have multiplied into a substantial amount resulting in adequate pension for a longer period of retired life.
- If you invest at the age of 25 compared to at the age of 35 years, you get a decade to make your money multiply and offer handsome returns.
- There is never the right amount to begin with when it comes to investing in pension plans. The idea is not to invest huge or substantial amounts, but to invest at the right time, even if the amounts are small.
- Do remember that small amounts invested with discipline over a long period of time in equity based markets are known to offer exemplary returns and build a solid corpus of funds for you to enjoy later in life.
- Don’t wait to save some money and then invest; instead start investing immediately with whatever little you can spare after meeting your survival expenses.
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!
How Easypolicy Helps You To Choose Best Pension Plan!
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:
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.
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.
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.
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.
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.
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.
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!
Step Wise Process To Buy Pension Plans Online!
Buying your pension plan online is the wisest thing to do, as it saves a lot of time, effort and paperwork.
Login to an insurance comparison website or the insurer's website directly if you have chosen your insurer already.
Login to an insurance comparison website or the insurer's website directly if you have chosen your insurer already.
Read through the various plans available and make a study as per your individual needs.
Choose the coverage amount that you need.
Choose the riders (additional benefits) with your policy.
Fill in the details required by the insurance company such age, gender, illness etc.
Calculate the premium. The premium amount is usually determined as per the filled details and chosen riders.
Pay the premium online through credit card, debit card, or net banking.
The pension plan will be generated in your name and issued by the company. You will receive the documents online, in your mail and the hard copies via post.
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.