Best Annuity Plans Available In India 2021
Updated On Dec 02, 2021
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What exactly is annuity? An annuity is a long-term investment arrangement in which a person gets monthly payments or income from an insurance company. The payments might be made right away or at a later date by the respective individual. Individuals can choose to pay in monthly instalments or in one lump fee.
Individual financial objectives are quantitative and defined milestones that, when achieved, move an individual closer to their desired future. Setting proper financial goals needs a substantial level of financial knowledge on the individual's behalf. An annuity, as we all know, is a sort of insurance contract that guarantees a constant stream of income from invested assets in the future. As a result, the individual enjoys a steady stream of income for a certain period of time or for the rest of their lives. To find out more on annuity, read on.
Why Is An Annuity Plan Required?
Retirement is a moment in every working individual’s life that might cause financial concerns and make it difficult to maintain one's lifestyle. An individual's source of income may disappear after retirement, requiring them to adjust their lifestyle. A Pension Plan assures that the respective individual can continue to receive monthly income once they retire, even if their regular job payments stop coming in. After working for a significant portion of their life, retirement is a well-earned period in which an individual should relax and enjoy life. A pension plan can help them afford the things on their bucket list that remain unfulfilled while also allowing them to be financially self-sufficient.
Annuity Plan Options In India
Following are some of the annuity plan options available in India -
1. Annuity Payable For Life
A fixed annuity is a type of insurance that pays out at regular intervals throughout the rest of the insured individual's life. When the annuitant dies, the pension is terminated. If they have no commitments when they die, this is the alternative for any individual. In comparison to the other alternatives, the highest amount of pension is payable to an individual.
2. Annuity Payable For Life With A Guaranteed Period
The annuity is paid for a set amount of time and then until the annuitant dies. An insured individual will receive a greater pension if the guarantee term is shorter. When the annuitant dies, the annuity comes to an end. Take this choice for a shorter term if an individual has children who can care for them after a few years.
3. Life Annuity With Purchase Price Return
An individual can choose this option if they wish to leave any money to their respective dependents. The annuitant will get a pension until they die, and the purchase price will be handed to the nominee following their death.
4. Increasing Annuity At A Fixed Rate
With this option, the annuity paid grows each year.
5. Joint Life And Last Survivor Annuity
The pension will be paid to the annuitant until they die; if their spouse survives them, then the spouse will also be entitled to the annuity. It is possible to choose the size of the pension to be provided to the spouse.
How Does An Annuity Work?
Annuities are meant to provide insured individuals with a consistent source of income during their retirement years, easing concerns about outliving their assets. Some people may choose to purchase an annuity contract from an insurance company or another financial institution if their current assets are insufficient to sustain their current quality of living.
An annuity may be an amazing alternative for individuals who desire a reliable and regular income in retirement if they don't have any other options. For many people, a steady stream of income is enough, and they can use their other assets and investments to cover rising expenditures and other cost-of-living concerns.
Also read - Features And Benefits Of Annuity In NPS
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.