Insure to ensure a comfortable retirement!

What is a Retirement Plan?

Retirement plans, also known as pension plans, are life insurance plans that provide you financial security once your active income stops. These pension schemes are insurance led investment plans that help build a large retirement corpus over a period for a comfortable and stress-free retirement. 

You invest your earnings over the years in them, which is invested on your behalf by the insurer to generate income during your post-retirement years. You can withdraw the corpus as a lump sum or fixed monthly income as desired.

Why do You Need a Pension Plan?

With high cost of living & rising inflation, retirement planning has become a must. Pension plans help you cover all the expenses arising in your post-retirement years, including going on a vacation and pursuing a hobby, among others. It gives you financial independence in your golden years as you receive a monthly income.

  • Regular Income
  • Financial security for your family
  • Maintain your lifestyle
  • Affordable way of Retirement Planning

Retirement Plans

ABSLI Empower Pension Plan

This plan ensures that you remain in control of your destiny even during the second innings of life. UIN: 109L078V03

  • Guaranteed Additions
  • Financial protection for your family
  • Tax benefits1

ABSLI Empower Pension- SP Plan

A single premium plan that ensures you enjoy a much deserved comfortable retirement. UIN: 109L094V02

  • Guaranteed additions
  • Regular income
  • Vesting benefit as per plan option chosen

ABSLI Immediate Annuity Plan

This planprovides regular income for your retirement years, ensuring peace of mind! UIN: 109N083V03

  • Guaranteed regular income for life
  • Financial protection for your family
  • No medical tests

Need help with life insurance?

+91
I agree to the Terms of Usage and Privacy Policy and authorize Aditya Birla Sun Life Insurance Company Limited and its associates to call/SMS/Email/WhatsApp me.

Thank you for your details. We will reach out to you shortly.

1800-270-7000 or reach out to us on this number.

Thank you for your details. Currently we are facing issue in our system.

1800-270-7000 or reach out to us on this number.

Benefits of Pension Plans

Regular income

Pension plans provide regular income, which helps take care of your post-retirement needs and aid you in leading a worry – free relaxed life.

Financial independence

Pension schemes help you live life on your terms without depending on your children or relatives and enjoy every moment of it.

Bridge shortfall of corpus

Savings from provident fund and gratuity may fall short in the long run. Pension yojanas help bridge this shortfall, fulfilling your every need during the golden years of your life.

Accumulate wealth

Regular and disciplined investment in pension plans helps you accumulate a sizeable retirement corpus in the long run. This helps you maintain your standard of living and meet post-retirement expenses.

Withdrawal in accumulation stage

Are you worried about an urgent need for funds due to an emergency? Relax. You don’t have to borrow from banks or your relatives. Some pension plans allow partial withdrawal during the accumulation phase, ensuring you have the required money when needed.

Tax Benefits

Premiums paid towards pension plans qualify for tax deduction under section 80CCC of the Income Tax Act, 19611. Also, on reaching the vesting age, i.e., the age when you start receiving the monthly pension, you can withdraw one-third of the retirement savings, tax-free as lump sum under section 10(10A) of the Income Tax Act, 1961. This helps you to save more money.

Retirement Calculator

Ascertain the amount you need for your retired life

Things to Keep in Mind While Choosing Pension Plans

  • Buy early

    Don’t you start early when you want to reach an important destination? Retirement planning is no different. When you buy a pension plan early, you have more time to save and invest to build a substantial corpus.

  • Know the corpus you want to build

    Knowing the approximate corpus you want to build helps you save and invest accordingly. Factor in your post-retirement needs, number of dependents, inflation and liabilities while figuring out the final corpus amount.

  • Type of plan

    Do you need pension immediately or after some time? If you need it immediately, you can buy an immediate retirement annuity plan. On the other hand, if you need it after a certain number of years, go for deferred annuity.

  • Pension amount needed

    Amount of savings required for a pension amount of Rs. 10,000, and Rs. 30,000 differs. Knowing the pension amount needed will help you save and invest accordingly. While figuring out this amount, take into account inflation, which brings down the value of money with time.

  • Premium payment period

    Being aware of the premium payment period, i.e., the time for which you need pay premiums, helps you to be better prepared with money so that you can pay premiums on time, and enjoy policy benefits.

  • Don’t look at only tax-savings

    Note that investing is pension schemes only to save tax is not the right approach. The best pension plan not only helps you lower your tax outgo but also help you meet all your financial needs in your retirement years and help you lead a stress-free retired life.

Frequently Asked Questions

  • Does pension end after my death?

    It depends on the policy’s terms and conditions and is better to clarify the same with your insurer.

  • When should I start investing in pension plans?

    It is always considered 'earlier the better'. So, start as early as possible so that you have to save smaller amounts from your income while the corpus built can be substantial

  • What is the premium amount for retirement plans?

    The premium amount for most of the retirement plans is decided by the insurer according to the plan you choose. Various factors like age, lifestyle play a pivotal role in deciding the premium amount.

  • Can I invest in multiple pension plans?

    Yes, you can. However, note that retirement pension plans are long-term commitment which requires premium payment for a certain period of time. If you have enough income to do so, you can opt for more than one pension plan. If not, it’s advisable to stick to one or two plans at the most.

  • What happens to my pension plan if I surrender before maturity?

    If you surrender your pension plan before maturity, the entire sum received is added to your income and taxed as per the applicable tax rates. Also, you will lose out on other benefits, including life cover from your policy.

  • Are Retirement Plans taxed?

    No, the retirement plans are not taxable. However, any withdrawal made can be taxable.

  • What is the difference between participating and non-participating pension plans?

    In a participating pension scheme, the insurer shares the profits made in the form of bonuses and dividends. This is not the case with a non-participating scheme. Also, a participating pension plan has a higher premium than a non-participating plan.

  • What are the tax benefits accompanying pension plans?

    Premiums paid towards pension plans qualify for tax benefits1 under section 80CCC of the Income Tax Act, 1961. Death claim proceeds are exempt for taxesin the hands of the nominee and annuity received is taxed as per the existing tax slab.

    1Tax benefits are subject to changes in the tax laws. You are advised to consult your tax advisor for the same

  • What is the meaning of vesting date?

    It’s the date from which you start receiving pension as regular income from your retirement pension plan.

  • Why should I buy a pension plan?

    You should buy a pension plan to secure your retirement. A pension plan helps you spend your retired life without worries as you receive a regular income. An in-built life cover offers your dependents a financial cushion in your absence.

  • What is the main feature of a retirement plan?

    The main feature of a retirement plan is the steady and fixed income that it offers that helps you take care of your post-retired needs and aids  in providing a stress-free retired life.

  • What are the types of pension plans?

    Broadly there are two types of annuity pension plans – immediate and deferred. In immediate annuity, you start receiving pension immediately after investing while in deferred annuity, you receive pension after a few years.

Trending Articles

Popular Articles
View All

1Tax benefits are subject to changes in the tax laws. You are advised to consult your tax advisor for the same

Disclaimer

For more details on risk factors, terms and conditions please read sales brochure carefully before concluding the sale An extra premium may be charged as per our then existing underwriting guidelines for substandard lives, smokers or people having hazardous occupations etc.
The Trade Logo "Aditya Birla Capital" Displayed Above Is Owned By ADITYA BIRLA MANAGEMENT CORPORATION PRIVATE LIMITED (Trademark Owner) And Used By ADITYA BIRLA SUN LIFE INSURANCE COMPANY LIMITED (ABSLI) under the License.
Aditya Birla Sun Life Insurance Company Limited Registered Office: One World Center Tower 1, 16th Floor, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai - 400013. IRDAI Reg No. 109 www.adityabirlasunlifeinsurance.com CIN: U99999MH2000PLC128110 Toll free no. 1800-270-7000

ADV/9/20-21/1180

Need help with life insurance?

+91
I agree to the Terms of Usage and Privacy Policy and authorize Aditya Birla Sun Life Insurance Company Limited and its associates to call/SMS/Email/WhatsApp me.

Thank you for your details. We will reach out to you shortly.

1800-270-7000 or reach out to us on this number.

Thank you for your details. Currently we are facing issue in our system.

1800-270-7000 or reach out to us on this number.