As the difficulties due to the coronavirus pandemic are increasing day by day, not only is it important to take all the safety measures but also keep in mind how to build a safe, secure, independent future. And to do so, every individual in their 30s opts for a retirement plan. When it comes to pension Plans for senior citizens during the Coronavirus pandemic, Coverfox has got all the answers for you. DID YOU KNOW, the senior citizens will get a three-month pension in advance. Yes, this rule has been set by the Central Government of India on 27th March 2020. The government has decided to pay a 3-month pension in advance to the senior citizens, differently-abled, and widows. This move is a part of the relief measures taken by the government as the country's economy is affected due to the ongoing pandemic and nation-wide lockdown. There are numerous benefits under this program, and the pension funds are directly transferred to the recipient's bank account.
As per the ASAP, an amount of INR 200 is provided to senior citizens between the age of 60 to 79 years and rupees five hundred to citizens aged 80 years and above, every month.
Rupees three hundred is given to the widows between the age of 40 to 79 years every month and INR 500 to those who are above 80 years of age. And for the disabled beneficiaries, the pension is capped at Rs. 300 per month up to 79 years of age and Rs. 500 for people above 80 years. Besides this advance pension scheme, Union Finance Minister announced that an ex gratia amount of Rs. 1000 will be given to the beneficiaries in two installments over the next three months from April 2020. This amount is over and above the pension fund that has been given to beneficiaries on a monthly basis.
In addition, in order to provide relief funds to citizens, the Reserve Bank of India has allowed banks to provide a moratorium on EMI payments on all types of term loan for the next three months, starting from April 2020.
These are retirement plans where the policyholder is supposed to contribute some amount of funds. These funds are then invested for the investor’s benefit in the future. This collected fund is provided to the policyholder after retirement for buying an immediate annuity plan.
Pension is the most common yet important saving scheme. There are three components to the pension system in India, civil servants’ pension, the mandatory pension schemes run by the Employee's Provident Fund Organisation, and the National Social Assistance Programme.
Here are the top 5 reasons:
With the rise in the life expectancy rate, there has also been a rapid growth in healthcare inflation in India. Hospitalization and medication costs are increasing day by day. In such scenarios, a pension plan will ease some tension and provide financial assistance during your post-retirement phase.
Pension plans assure you a stable flow of income after your retirement. These plans help you lead a comfortable, independent, and worry-free life after retirement. Some pension plans come with bonuses too.
Investing in a pension plan at an early stage of your life gives you income tax benefits under Section 80C of the Income Tax Act, 1961.
Unlike the developed countries, India lacks social security in terms of measures taken by the governing body to provide income to the individual or their family when there’s no source of income to properly run a household. India yet lacks such schemes and programmes, which will look after the benefit of retired as well as disabled individuals, which is why it is important for you to have a secure future in terms of finance. So you do not have to depend on someone to have a decent standard of living.
As per the reports issued by the world bank, the life expectancy in 2017 in India was 68.78 years. It has increased by 10% in almost 20 years. The higher the life expectancy, the higher will be the amount required after retirement.
We all work hard and save money to live peacefully after retirement. It is important to have enough savings after your retirement to maintain a good lifestyle and meet healthcare expenses easily. Therefore, pension schemes play a significant role in your financial planning. And to ensure a worry-free and quality life after retirement, you must start planning for your retirement well in advance.
Vesting age refers to the age at which the policyholder of a pension plan starts receiving a pension on a monthly basis. In most cases, the minimum vesting age is usually between 40 years and 50 years and is flexible up to the age of 70 years. Although there are a few companies that extend their vesting age till 90 years.
Do not mix it with the accumulation period. The payment period is the time in which you receive the pension after retiring. For example, if one receives a pension from the age of 60 to age 75, the payment period will be 15 years. Most funds keep this separate from the accumulation period, though some funds allow partial or full withdrawals during the accumulation period as well.
Surrendering your pension plan before maturity is not a smart move even after paying the required minimum premium. This results in the investor losing every benefit of the plan, including the assured sum and life insurance cover.
In this period, the investor pays regularly or once during the tenure. This is the time when your wealth starts accumulating in order to build a good amount of corpus. For instance, if you start investing at the age of 25 years and continue investing till the age of 60. Here, your accumulation period will be 35 years and your pension for the chosen period comes from this corpus.
Coverfox can be an ideal option to go for as it provides you information from official sources, gives you professional assistance, and comes with easy solutions to your insurance hassles. It has an easy process and quick access.
A pension scheme is basically a low liquidity product. Many insurance companies offer pension funds that are designed to enable policyholders to withdraw their pension amount at the time of the accumulation stage. This feature makes sure that you are always prepared for an unpredictable emergency. More importantly, it prevents you from being dependent on banks for a loan under any urgent situation.
This serves the purpose of a reliable source of income after your retirement or according to your preference. It enables you to plan in advance so that you are financially independent and stable even after your retirement. It is advised that you use the pension plan calculator to get a rough idea of the retirement corpus you need to aim for.
In short,
You can have a secure pension plan even in the ongoing pandemic. Retirement plans are always a good option to go for as they ensure you have a safe and independent future. And we Coverfox ensure to provide you all the information you require with our hassle-free system. Cover Karo, Kaam Ayega!