Aditya Birla Sun Life Insurance Company Limited

Annuity plans: Useful or not?

India is fortunate to have a well-developed insurance space that is also constantly evolving to meet customers' expectations. There is an array of insurance products available in India today. Apart from conventional life, health, vehicle and travel insurance plans, a growing category of plans pertain to those that invest in the markets whilst providing protection to the policy holder.

This second category is seeing robust growth as more people realise the immense potential of plans that offer growth over investment as well as insurance protection. Of special interest in this context is a product known as the 'annuity plan'.

What is annuity?

Annuity plans are insurance products that are useful for those planning their retirement. It is not a plan that is to be taken after retirement. On the contrary, it is a policy that one takes while one is still young and having a stable income. It is designed such that once the person retires, he may have a steady revenue with which to pay all his expenses.

An annuity policy is also useful for those planning to retire early from their job, such as age 45 years instead of the conventional 60 years. One can use the corpus from the annuity plan to run the household expenses as one pursues a hobby, takes a sabbatical for a few months or starts one's own business.

The pay-out from the annuity plan is in terms of monthly, quarterly, six-monthly or annual frequencies.

The types of annuity plans

There are two types of annuity plans: Immediate Annuity and Deferred Annuity.

'Immediate annuity' refers to a policy where the holder receives the pay out right after the premium is paid. This kind of annuity is useful for those who are on the cusp of retirement and who can invest a large sum of money in the plan. The investment gains returns from the interest payable on it.

'Deferred annuity' refers to a plan where the policy holder pays premiums for the policy for a number of years. The pay-out takes place once the holder retires, and may be paid in the frequencies mentioned above. This option is useful for those who would like income in periodic intervals post-retirement.

The absolute need for annuity plans

There are two sides to retirement-one is the peaceful, joyful side that allows the retiree the chance to finally do the things that a lack of time and opportunity prevented him from doing earlier. The second side is the grim side of retirement. It is one which sees the retiree battle daily household expenses and struggle to pay for essential medication and treatment. This retiree has not been able to plan for a stable and peaceful retirement, resulting in financial chaos. To make matters worse, he does not have an income after retirement, but his expenses still continue as before.

Annuity plans have been designed for both categories of retirees. They take care of one whether one is financially stable post-retirement or not. The corpus provided by these plans can be useful for you at a time when there is no active income but there are household responsibilities.

Toll free (Within India):

1800 270 7000

Outside India: :

+91 22 66917777

(Call charges apply)

Between 9 am to 9 pm, All 7 Days

Send an Advisor

Mail on:

care.lifeinsurance@adityabirlacapital.com

Get to a branch closest to you

Connect with us on Whatsapp:


Step 1. Register

Register by giving a missed call on 7676690033 or SMS OPTIN on 567679 from your registered mobile number


Step 2. Begin Chatting

Save the number 8828800040 as ABSLI contact and say 'Hi' to us on WhatsApp

Other Related Articles

Are you planning for your retirement correctly?

Often, we erroneously believe that the most important years of a person's life start in young age and peak in the...Read more

5 Must-Haves for Your Retirement

Although Indian employees have the second highest savings rate of 16%, more than 78% Indians feel they... Read more

Factors to check before choosing the right pension plan

With every passing year, the life expectancy of people all over the world continues to rise. In India, there are...Read more

5 Things You Must Know About Retirement Planning @ Aditya Birla Sun Life Insurance

A survey conducted by IPSOS Mori https://www.ipsos-mori.com/in 2015 found that about 44% of the Indian participants either did...Read more

Annuity plans: Useful or not?

India is fortunate to have a well-developed insurance space that is also constantly evolving to meet customers' expectations...Read more

Can annuity double up as a pension plan?

Retirement-the term itself has a golden aura of contentment around it. When we say the word 'retirement', we often think...Read more

How much money will I need for my retirement?

Can't figure out how much will be enough to lead a comfortable retired life? Here's a simple three-step method to calculate it...Read more

How to Handle Retirement Investments Smartly @ Aditya Birla Sun Life

Mr Kumar had been a very successful advertising executive. He earned well, took care of his family and had a comfortable...Read more

I am self-employed. How can I plan my retirement using life insurance?

Several types of insurance policies provide life cover as well as regular returns. Most salaried employees have PPF and gratuity...Read more

Is life insurance a retirement planning tool?

Planning for your retirement? Then ensure life insurance policies are included in your portfolio...Read more

Know the basics of retirement and how to plan for it

If you are in your 30s or 40s, chances are that you are a long way off from thinking about retirement. The sad truth is...Read more