Pension Plan or Retirement Plan is a life insurance product for safe and comfortable life after retirement. Pension assists in managing expenses when your active income stops. Retirement plans provide investment opportunities to accumulate your savings over a period of time and offer you a steady income after retirement. This ensures your post-retirement life to be comfortable and worry-free.
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Give ₹7,69,1505 and get ₹50,913 annual annuity
What is a Pension Plan?
Importance of Pension Plan
Planning for retirement is a must considering the current cost of living and the rising inflation. A perfect planning and wise investment in a pension plan can ensure an independent and comfortable retired life. Because retirement plans offer regular income after your retirement, and this can cover multiple expenses like medical bills, going on vacation, pursuing hobbies, starting a new venture among others. It secures your future and makes you financially independent in the golden years of your life. This is important for the following reasons:
Features of Pension Plan
Pension plan provides you with a stable monthly income post-retirement. The plan is a way to save funds for your future and maintain a lifestyle the way you want it.
Who should buy a Pension Plan?
Buy a pension plan to create a huge fund and enjoy regular monthly/annual income when you are retired. The pension plan develops a habit of disciplined savings to handle the uncertainties in life. Like you buy a monthly ration and use it wisely in portions so that you use it for days more than in a month. Similarly, with your monthly income, saving for your retirement can prepare you financially for life post-retirement. These people should buy a pension plan:
Let us understand with an example. Rahul is 35 years old today and plans to retire when he turns 60 years. His monthly income is Rs.40,000/- and his monthly expenses are Rs.20,000/-.In such a scenario, considering the current savings as Rs.0 and the rate of return be 6%, a total retirement fund of Rs.85.25 lakhs will be needed. For that Rahul will have to save approximately Rs.12,000 for the next 25 years**.
Factors that affect Pension Plan premium
A pension plan premium is dependent on these factors:
Frequently Asked Questions
Find out more about pension plans and explore how it will benefit you.
- Buy Early: Start early so that you save more for your retirement. Kicking off early with a retirement plan means that you have more time to save and invest to create a large corpus of money.
- Type of Plan: Buy the retirement plan based on your requirements. If you need money immediately, go for an immediate annuity plan but if the requirement arises for a number of years later, then you must buy a deferred annuity.
- Know the Amount of your Future Requirement: Consider your liabilities that are unavoidable especially after retirement and then decide the corpus you want to build.
- Pension Amount Needed: Decide the pension amount and then start planning the savings amount keeping in account the inflation rate also.
- Premium Payment Period:Check the premium payment period also and see whether you will be able to afford the premium for the duration or not.
- Don’t just buy for tax savings:Retirement insurance is not just for tax-savings but is to meet your future requirements.
1 Tax benefits are subject to changes in the tax laws. You are advised to consult your tax advisor for the same
- Provide you a stable income post retirement.
- Help you as a financial security in case your savings are short at the time of emergencies.
- Helps you meet future requirements of money keeping current inflation of 4.91% in mind.
1 As per annual audited figures submitted to IRDAI for the period FY 20-21
2 As per annual audited figures submitted to IRDAI for the period FY 20-21
3 Tax benefits are subject to changes in tax laws. Kindly consult your financial advisor for more detail.
**The premium paying term will be 25 years in case you are 35 years and want to retire when 60. Current earnings Rs.40,000 per month and expenses Rs.20,000 per month.
4 ABSLI Saral Pension Plan, Healthy male 40 years, Single Pay: Premium Paying Term, Annual Payout Frequency: Annual, Policy Term: Whole Life, Single Purchase Price Rs.2,50,000/-, You get annual annuity of Rs.13,809/-.
5 ABSLI Guaranteed Annuity Plus, age 45 years, healthy male, Annuity Option:1-Life Annuity, Annual Payout Frequency: Annual, Policy Term: Whole Life, Single purchase price of Rs.7,69,150, you get annual annuity of Rs.50,913/-
6 ABSLI Empower Pension Plan, age 40 year healthy male, Policy term is 10 years, Accumulation period is 10 years, basic premium is Rs.100000/-, Plan Option: Assured, Payment frequency: Annual, Return@8% fund value.
7 ABSLI Empower Pension SP Plan, age 40 years, Policy term 10 years, accumulation period 10 years, Single premium Rs.1,00,000/-, Fund Value: Rs.1,78,366/-@8% returns.
8 Source: https://www.businesstoday.in/magazine/cover-story/story/rise-in-medical-costs-should-be-covered-in-health-insurance-34527-2012-07-19#:~:text=The%20oft%2Dquoted%20figure%20for,in%20the%20past%20few%20years.
^Tax rate applied as per the existing laws. Consult your tax advisor for the same.
9 ABSLI Empower Pension -SP Plan, single premium Rs.100000/-, age 25 years, policy term 10 years, accumulation period 20 years. Returns Rs.41,45,795 @8% fund value.
10 ABSLI Empower Pension Plan, age 35, accumulation period 10 years, policy term 10 years, fund value @8% Rs.13,57,294/-
An extra premium may be charged as per our then existing underwriting guidelines for substandard lives, smokers or people having hazardous occupations etc.
ABSLI Empower Pension Plan is a non-participating unit linked life insurance pension plan (UIN: 109L078V02).
ABSLI Empower Pension Plan SP is a non-participating unit linked life insurance pension plan (UIN: 109L094V02).
ABSLI Saral Pension Plan is a Non-Linked Non-Participating Single Premium Individual Immediate Annuity Plan (UIN: 109N130V01).
ABSLI Guaranteed Annuity Plus Plan is a Non-Linked, Non-Participating, General Annuity Plan (UIN: 109N132V03).