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How To Pick The Right Pension Plan?

Published On Mar 16, 2022

Retirement is unavoidable; everyone who works has to retire at some point and return to the basics, in most cases. The most crucial part of a worry-free and successful retirement is proper planning and preparedness, both emotionally and financially. You may be financially prepared for retirement, but your mind may not accept the idea that you will soon retire, and vice versa.

Best Way To Choose The Right Pension Plan

Certain market elements influence whether or not a pension plan is appropriate for you. These pointers may assist you in selecting the best plan for your needs and, of course, within your budget:

1. Availability of Inflation Adjusted Returns

Keep an eye on the fact that your selected policy delivers inflation-adjusted returns as one of the most important and smart elements to consider when choosing the best pension plan for you. This means that the pension plan you select must offer you returns that are unaffected by current inflation when you retire; the value of your invested funds should continue to rise in tandem with rising consumer prices.

2. Guaranteed Pension for the Insured and his Spouse

After working so hard for so long, one wants to live a happy and independent life free of worries. You may like to spend your retirement completely with your husband and children, and to spend the funds on them, which is understandable, but what if you die in an unfortunate event? Check if your chosen plan provides a guaranteed pension for your spouse in the event of your death to secure financial security for your family and direct nominees. You are ensuring their safety in both your presence and absence this way.

3. Flexibility to Increase Premium Amounts

Every individual is required to begin saving early in his profession so that by the conclusion of his employment, he would have accumulated a substantial sum of money. However, it is likely that you did not start saving and investing until later in life, and as a result, your savings and investments are not worth much. Many pension plans allow you to increase your premium amounts if you have a large sum of money or if your salary rises, increasing your corpus.

4. Frequent Bonuses and Other Benefits

Pension plans with bonus incentives can be even more valuable, and the greatest part is that many insurance firms give frequent bonuses and other monetary incentives to their customers. As a result, you should strive to select a policy that offers you a loyalty incentive, a maturity bonus, or other additional benefits.

5. Guaranteed Income Option

It makes no difference how much you save throughout your career because there is always the possibility that you will run out of the stated amount of money at some point. As a result, it is vital that you choose a pension plan with a guaranteed income option that pays you a monthly income for the rest of your life when you retire to ensure your financial security.

Some Pension Plans In India For Senior Citizen

1. LIC New Jeevan Shanti

The LIC New Jeevan Shanti is a single premium plan that offers a deferred annuity option for both single and joint life.

  • Payment options for annuities are varied.
  • After one year of loan repayment, the nominee will get a death benefit.
  • If the dependent life is hampered, the investment is lowered.
  • There is a 15-day free lookup period.
  • The maximum age for admission is 79 years old.
  • Within three months of purchase, the policy can be surrendered.

2. SBI Life Saral Pension Plan

The SBI Life Saral Pension Plan is a classic individual, participating, non-linked pension plan that protects policyholders from market volatility and fluctuation.

  • If there is a financial need, a loan can be obtained.
  • If you are diagnosed with a serious illness, you have the option to surrender your coverage.
  • From the date of receipt of the policy, you have a 15-day free look period. A 30-day free look period is offered in the case of an electronic insurance purchase or a policy obtained through a distant mode.
  • It is possible to obtain tax benefits in accordance with the existing income tax legislation.
  • There are two types of return of premium options: single life annuity and joint life annuity.

3. HDFC Life Pension Guaranteed Plan

The HDFC Life Pension Guaranteed Plan is a single premium annuity designed to give a lifetime of guaranteed income.

  • Annuity payments might be made yearly, half-yearly, quarterly, or monthly.
  • Option to receive a refund of the purchase price if you die.
  • 30 years old is the minimum admission age, and 85 years old is the maximum.
  • Sections 80C and 10(10A) of the Income Tax Act of 1961 provide tax incentives.
  • Option to raise annuity payments by way of a top-up payment
  • You have the option of planning for a married life or a single life.

4. MAX Life Saral Pension Plan

The Max Life Saral Pension Plan is a single premium, non-linked, non-participating instant annuity plan that offers a steady income after retirement.

  • There are two types of annuities available: single life and joint life.
  • Surrender is possible at any point after the policy has been active for six months.
  • There is a loan facility available.
  • There are possibilities for payouts on a yearly, half-yearly, quarterly, and monthly basis.

Take Away

These are the most common factors that influence your pension plans and give you increasingly greater benefits as you approach retirement. Choose a plan that meets your needs and enjoy a worry-free existence.

Also Read: Is the Post Office Monthly Income Scheme For Senior People?

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.

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