A person's retirement is a milestone in his life. It heralds a time of rest and the peaceful pursuit of hobbies. However, this is not the way most people's retirement goes. While they are able to cobble together some savings over their working lives, often the money they have saved is not enough to take care of daily expenses and medical treatment costs.
The biggest factor on which retirement hinges is the loss of a steady income. Retirees must either save up a large corpus of money for their future or make balanced investments in their younger years. The latter option is a must for those who seek a peaceful, worry-free retirement. For this, it is wise to seek out annuity plans that help retirees live an independent life post the age at which they retire.
What are annuity plans?
Annuity plans are insurance products that offer a steady stream of revenue after a person quits active working life. It is useful also for those who wish to retire early from their careers for personal pursuits. You must make an investment into the plan and it makes regular or one-time payment to you at a future date. You can choose to receive monthly, quarterly, six-monthly or annual payment from the annuity plan.
The pay-out mode is determined by the type of annuity you select. You can choose 'immediate annuity' under which you begin to receive a pay-out after the first premium is paid. This is useful for people who are nearing retirement and would like a supplemental source of income. The other mode is 'deferred annuity', where you can make payments for a number of years and receive the pay-outs only after the maturity of the plan.
Looking at immediate annuity
Under immediate annuity, the pay-out is instant. You also have the option of switching your deferred annuities to immediate annuity when the pay-out time arrives.
Aditya Birla Sun Life Insurance offers an excellent immediate annuity plan that helps retirees account for the expenses of their retirement years. It also factors in future inflation when calculating the pay-outs. The pay-out is monthly, quarterly, six-monthly or annually. It provides a steady pension for the retirement years and also has tax benefits under Sec 80CCC for the annuitant.
The purchase price of the immediate annuity plan provides a minimum regular income of Rs 1,000, Rs 3,000, Rs 6,000 and Rs 12,000 in the pay-out mode frequency mentioned above. Aditya Birla Sun Life Insurance offers six annuity plan options, depending on whether the annuitant wants regular, increasing or joint life annuity.