Most of the retirement plans offered by insurers are blended products that offer both investment benefits and insurance. It is important to understand three important terms related to pension plans:
Vesting Age: It is the age at which the insured individual starts receiving pension.
Accumulation period: The period during which the individual pays premiums for accumulating funds for retirement.
Annuity: It is the monthly income received by individual after the vesting age has been crossed.
Why should You Plan Now?
It does not take rocket science to understand the fact that you need a sufficient amount of money after retirement to lead a decent life. Even if you are business professional, who prefers to work in the later stages of life, it is a wise idea to make an investment in pension plans because you will have contingency funds in case of an emergency.
Also, as the plans come with insurance benefits, your dependents will have a substantial amount in case of a tragedy. If we take inflation into consideration, it might be difficult to manage the expenses in future just by saving the money in your bank account.
The pension plans offer regular income after vesting age, which means you don’t have to rely on anyone to take care of your regular and medical expenses.
Best Pension Plans in the Market?
There are numerous pension plans offered by private players like HDFC and Reliance and also government organizations like LIC. We have listed ten best plans among all the available options.
HDFC Life Guaranteed Pension Plan
- It comes with premium payment term of 10, 7, or 5 years.
- The company offers a lump sum Vesting Addition, which is payable at vesting.
- The plan comes with guaranteed death benefit that is equal to total premiums paid till the date, which are accumulated at 6 percent per year.
- Guaranteed additions of three percent of sum assured on vesting. This gets accrued for every completed year.
- The nominee receives the premiums paid till date that are compounded annually at six percent per annum in case the policyholder dies.
- The minimum installment of premium annually is Rs. 24,000, whereas half-yearly, quarterly, and monthly are Rs. 12,000, Rs. 6,000 and Rs. 2000, respectively.
- Buy HDFC Life Guaranteed Pension Plan
LIC New Jeevan Nidhi
- On maturity, the individual can either purchase deferred annuity or immediate annuity
- There is an availability of Accidental Death and Disability Benefit Rider.
- The policy gives assured additions at Rs. 50 per thousand of Sum assured for every completed year. This is applicable for first five years.
- The policyholder receives basic sum assured, along with vested simple revisionary bonuses, accumulated assured additions and final additional bonus (if any).
- Buy LIC New Jeevan Nidhi Policy
ICICI Pru Immediate Annuity
- It is a non-linked life insurance plan
- The policyholder is able to change the annuity-related option during the term of the plan.
- The policy offers pension for policyholder and his/her spouse for life
- The nominee also gets a lump sum amount in case the policyholder dies.
- The individuals get a chance to return the policy in case they are not satisfied with the period. The freelook period of the same is 15 or 30 days, depending on how you purchased the policy.
- Buy ICICI Pru Immediate Annuity Policy
Bajaj Allianz Retire Rich Plan
- The individuals can choose from single, limited, or regular premium payment option.
- The rate of loyalty additions increases with the increase in policy term
- The plan gives the flexibility to modify the premium payment term ( in case of limited or regular premium payment)
- Flexibility of paying top-up premium also makes it an ideal plan
- Buy Bajaj Allianz Retire Rich Plan
National Pension Scheme
- The individuals can choose from one of the seven fund managers for investment
- There is a facility to change the investment fund while the scheme is active.
- The operational simplicity makes it popular among the individuals from Tier II and Tier III cities.
- It is applicable for individuals with 18 to 60 years of age.
Reliance Nippon Life Smart Pension Plan
- The individuals can select vesting age from 45 to 75 years
- The loyalty additions help in increasing retirement corpus
- Policy term can be chosen from 10 to 30 years, as per the convenience
- The retirement age can be extended, as per the policyholder’s needs
- Buy Reliance Nippon Life Smart Pension Plan
HDFC Life Pension Super Plus
- In case the policyholder dies, the nominee gets fund value or total premiums paid (whatever is of higher value).
- The minimum death value is 105 percent or more.
- After maturity, the policyholder receives fund value or assured benefit of 101 percent of all premiums, along with top-up premiums.
- 11th year onwards, additional allocation premium rate is 102.5 percent.
- Buy HDFC Life Pension Super Plus Plan
LIC Jeevan Akshay-VI
- There are seven annuity options available under the plan
- The policyholder has to pay the premium in the form of a lump sum
- The minimum purchase price for offline distribution channels is Rs. 100,000, whereas it is Rs. 150,000 for online sale
- Medical examination is not needed for the plan.
- The minimum age at entry is 30 years, whereas the maximum age is 85 years.
- Buy LIC Jeevan Akshay-VI Plan
Birla Sun Life Insurance Empower Pension Plan
- The policyholder has to select among three risk appetites, which include aggressive, conservative and moderate while purchasing the plan
- The age limit for purchasing the plan is 25-70 years.
- The maximum vesting age is 80 years.
- The policy term ranges from five years to 30 years.
- The individuals can surrender the policy to insurer till vesting in case of emergencies.
- Buy Birla Sun Life Insurance Empower Pension Plan
Just like any other insurance and investment plan, these pension plans also offer income tax benefit as per Section 10(10A), Section 80C and Section 10(10D).
Choosing a perfect investment plan will not only secure your life post-retirement but will allow you to choose a life you want. For example, you can indulge in traveling, start a business you have dreamt of, or indulge in sports or adventurous activities. Make sure to read the brochure from company to read the terms and conditions in detail. Also, analyze the major factors like ability to invest regularly or one-time and future needs before finalizing a plan. Our portal ComparePolicy.com will help you to compare pension plans of all leading available in the market.