The different types of life insurance products help different people meet their insurance as well as investment requirements. Annuity plans help in retirement planning. You can invest in an annuity plan and build up a fund to secure your retirement years. You can also invest in an immediate annuity plan with a lump sum amount and have an assured source of income after you retire. Take a look at this article to know more about annuity plans and how they benefit you.
You can invest in an annuity plan at any time. Also known as pension plans, annuity insurance is a form of life insurance where you get to create a corpus over a period of time and then get regular payouts after your retirement. The annuity plans also cover your life and if you happen to die any time during the policy period, your nominees get the death benefits. Annuity plans are mainly available in two types:
This is a popular form of annuity insurance. Here, you save money over a period of many years in small investments. By the time you retire, a comprehensive and large fund is ready and you get a fixed salary each month for a fixed number of years. A deferred annuity plan allows you to invest in small amounts without becoming a financial burden. It also offers tax benefits, which further makes this type of insurance very handy.
If you haven’t been able to invest regularly over the years, but now at retirement have a lump sum amount of money with you, you can consider getting an immediate annuity plan. Here, the fund is created with the lump sum amount and the payout begins right away. This is also a very helpful form of insurance and allows the policyholder to remain financially independent even after retirement.
Now that you know more about the types and benefits of the annuity insurance plans, go ahead and get a good policy for yourself. Here is a list of the best annuity plans for 2023:
This is one of the best immediate annuity plans available in India currently. You can buy this plan any time after you turn 30 years and before you turn 85 years. You can invest a minimum of INR 1 lakh in this policy, while there is no maximum limit. There are different forms of payouts available here and you can choose to get monthly, quarterly, or bi-annually or annually. It is a very flexible and reliable immediate annuity plan.
Next on the list, we have the Aditya Birla Sunlife Empower Pension Plan. This is a Unit Linked Pension Plan that allows the policyholder to invest in an amount as low as INR 18,000. The policy period ranges between 5 and 30 years and you are assured of a lifetime payout.
The next plan on the list is also from LIC. The Saral Pension plan is an immediate annuity plan where you get a 100% return on the policy price. You can invest in the policy if you are between the ages of 40 and 80 years. It has a whole-life payout option. The Saral Pension plan is one of the most popular and highest-selling annuity plans in India.
A very popular online annuity plan, the HDFC Life – Click to Retire policy has both deferred as well as immediate annuity options. If you choose the latter, you can invest over a period of 8, 10, or 15 years. The lowest vesting age is 45 years. It is a unit-linked annuity plan, so you get high returns while your life also stays covered.
Bajaj Allianz is an immediate annuity plan that allows you to have a financially secured retirement. You can choose the payout for yourself (single payout) or for yourself and your spouse (joint payout). There is a minimum purchase price of INR 25,000 and no maximum price, making it accessible to people from all walks of life.
You have an immediate, as well as deferred option, with the Kotak Premier Pension Plan. It is a traditional pension plan and offers benefits such as a regular payout, tax benefits, etc. Since it is a participating plan, the bonuses earned get added to your fund and you stand to make a profit when you invest in this policy.
Considered to be one of the best deferred annuity plans in India currently, the ICICI Pru – Easy Retirement plan is loaded with benefits. You can invest for a period of 10 to 30 years, by paying an annual premium of INR 48,000. This is also a unit-linked plan and offers handsome dividends. You can choose the type of fund, depending on your risk capacity.
Aviva Annuity Plus offers you 7 payout options to choose from:
The entrt age is set to 50 years to 80 years while the minimum age is dropped to 18 years for Aviva pension policyholders. The minimum purchase prise is INR 25,000 and the minimum annuity instalment amount is INR 500.
This annuity plan offers both immediate as well as deferred annuity options. The available plan alternatives are:
The entry age is set to 45 years while the maximum age is set to 80 years for alternatives 5 and 6. The minimum purchase prise is INR 2,00,000 and the minimum annuity instalment amount is INR 1,000.
Along with lifetime income to the insured, this annuity plan offers flexible payout modes as well as an option of getting an Annuity card which helps in receiving the annuity amount without any hassle. The options available are:
The entry age is set to 40 years to 80 years while the minimum age is set to 0 years for existing Future Generali deferred pensionholders. The minimum purchase prise is INR 30,000 and the annuity amount can be received either as a direct transfer to the annuity card or as post-dated cheques.
This annuity plan by India First allows you to pick your retirement age based on your needs and you can begin reaping the benefits at any time between the age of 40 years and 80 years. The available options are:
The entry age is set to 18 years to 80 yeas while the maximum age is set to 99 years for existing India First beneficiaries, members, and policyholders. The minimum purchase prise is INR 3,00,000 and the minimum annuity instalment amount is INR 1,000 per month or INR 12,500 per year.
Annuity plans in India are a type of insurance product that provides a steady stream of income to the policyholder for a certain period of time, usually after the policyholder retires. The policyholder typically pays a lump sum premium at the start of the policy or a series of premium payments over time. The insurer then uses the premium payments to invest in various assets, such as bonds and stocks, with the goal of generating returns that will be used to pay out the annuity income. The policyholder can choose from a variety of annuity options, such as a fixed annuity, where the income is a set amount, or a variable annuity, where the income can fluctuate based on the performance of the underlying investments. Additionally, the policyholder can choose the frequency of the income payments (monthly, quarterly, half-yearly, annually).
Conclusion
As you can clearly see from the points mentioned above, annuity insurance is one of the best and most practical forms of life insurance. If you are looking for a product where you can safely invest your money to secure your future as well as have your life covered, an annuity plan would suit you the best. Explore the options, and based on your needs, select the best and the most appropriate policy for yourself.
Annuity plans and Fixed deposits are both risk-free investments which come with a lock-in period. Your ideal investment depends on your requirements and budget. If you are looking for higher returns, you should consider annuity plans as they usually have higher interest rates. If you are on a tight budget, fixed deposits can be ideal for you.
Most annuity policies allow you to begin investing as early as at 40 years age. As a result, if you wish to save for your retirement effectively through an annuity policy, you should begin as soon as you have a steady income stream.
The major downfall of annuity plan is the opportunity cost of high-interest return that you can get by investing in other market-linked plans.
LIC Jeevan Akshay 6 Pension Plan is one of most popular annuity plans in the Indian market.
Most annuity programmes do not permit early withdrawal. If an insurer does decide to accept a premature withdrawal, you will almost certainly be assessed a penalty or fee.
The four main types of annuity plans are:
There is no set ‘best’ annuity plan. Your ideal annuity policy depends on your finanical objectives, investment tenure, age and budget.
Even though the total contribution made towards an immediate annuity plan is tax deductible under Income Tax Act Section 80CCC, the annuity income are treated as salary and thus are taxed accordingly.
Annuity plans can be a suitable investment if you want to put your funds in a safe investment that guarantees revenue after a certain length of time and provides life cover to the insured.
The Jeevan Akshay VI is offered by LIC as an immediate annuity policy that may be purchased with a lump sum payment. The plan offers annuity payouts of a certain amount during the annuitant's lifetime.
