• Annuity / Pension Plans in India – Detailed Overview

     4.5 / 5.0   by 16370 users
    Used this product? Write a review >>

    Fees & Charges

    Promised Interest Rate

    Plan Benefits

    Payment Options

    Policy Coverage

    Customer Service

    Responsiveness

    Retirement is an inevitable stage that comes in every working individual’s life. It is a stage in life which is likely to bring feelings of apprehension, especially in terms of finances. Now that regular paychecks will no longer be there, maintaining one’s lifestyle and meeting expenses is a valid worry which will every retired individual’s mind. However, insurance brings a special product designed specially to provide a regular income after you’ve retired, and in some cases, also provide insurance cover. Here are some important things which can help you decide on which pension plan is best suited for you.

    What is an Annuity/Pension Plan?

    Annuity is an insurance product that pays income and can be used as a part of retirement planning. You need to make an investment in the annuity and it makes payments to you on a future date. The payments are determined on length of your payment period.

    Why Do I Need A Pension Plan ?

    Retirement is a stage which comes in every working individual’s life, which can give rise to apprehensions in terms of income and maintaining one’s lifestyle. Post retirement, an individual’s source of income may no longer be there, forcing them to change their lifestyle. At such a time, a Pension Plan ensures that you continue receiving regular income after your retirement, once the regular work paychecks cease. After working for a major part of your life, a retirement is a well-deserved time, during which you should enjoy life. A pension plan will help fund the activities remaining on your bucket list, while also allowing you to be financially independent.

    Benefits of Pension/Annuity Plans :

    There’s a large part of our population which is fast approaching retirement, making them ideal candidates for pension plans. There is no shortage of insurers offering pension/annuity plans in India, making it easy for one to choose from a bevy of options. However, before you choose a certain plan, it is important that you understand exactly what that plan has to offer, its advantages, disadvantages and all related details. There are plenty of pension plans available in the market, each with its own set of benefits and advantages. Some of the benefits common to all pension plans are listed below.

    Provision of Regular Income Post Retirement – One of the biggest benefits of an pension plan is that it provides incomes after retirement. Pension schemes available in India help you cover your living expenses post retirement by providing a guaranteed income. With the variety of pension plans available out there, you can choose from one which suits your needs best. While some plans provide you with lifelong income, there are others which offer better returns.

    Funds at Times of Need – Some pension plans provide lump sum payments which can help you meet major expenses through life. Before your retirement, you may have several major expenses to take care of life purchasing a house, financing your child’s education, etc. Before you choose a policy, make sure you go over the details of the policy so you know exactly what you will be getting from it.

    Tax Benefits – Investing in an insurance policy comes with a set of tax benefits which you can avail. The same applies to retirement insurance plans. Check all the policies which you may have short-listed for the tax benefits they offer. Investing in a pension plan from an early age can help you save considerably on tax payments. Check your policy details to find out and understand the ways in which you may benefit from the available provisions of tax exemption under Section 80C of the Income Tax Act.

    Insurance Protection – In addition to providing income post retirement, pension plans also provide insurance cover. This is especially useful to provide protection in the unfortunate event of a death following which the family’s income will be protected. Insurance cover forms a part of most retirement plans which are offered by life insurance providers. this is helpful so that the surviving spouse does not have to undergo the financial burden following an unfortunate event.

    Annuity/Pension Plan Options :

    There are 5 segments but the range of options varies from person to person. The 5 segments are as follows:

    • Annuity Payable For Life

      Fixed annuity is paid at regular intervals throughout the insured’s life. The pension is stopped on the annuitant’s death. If you don’t have any obligations post your death, then opt for this option. Highest amount of pension is payable to an individual compared to the other options.

    • Annuity Payable For Life With A Guaranteed Period

      The annuity is paid for a certain period and thereafter till the annuitant is alive. If the guarantee period is shorter, you will get higher pension. The annuity stops on the death of the annuitant. If you have children who can take care of you after a few years, take this option for a shorter period.

    • Life Annuity With Purchase Price Return

      If you want to leave any amount for your dependents, then opt for this option. The annuitant will get pension till he dies, after his death, the purchase price will be given to the nominee.

    • Increasing Annuity at a fixed rate

      The annuity paid increases each year with this option.

    • Joint life and last survivor annuity

      Annuitant will receive pension till he dies, if his spouse survives then she is also entitled to the pension. The considerable amount of pension to be paid to the spouse can be selected.

    Types of Annuity/Pension Plans :

    The following are the types of Annuity/ Pension Plans: available.

    • Deferred Annuity

      Here the annuitant pays premiums till the policy term is over. After its term, the annuitant will start receiving the pension. No tax is levied on the amount the annuitant invests. You can make a one-time payment or make regular contributions towards the plan.

    • Immediate Annuity

      The annuitant has to deposit a large amount and the pension will begin immediately. The annuitant can avail tax benefits prevailing in India.

    • With & Without Cover Pension Plan

      ‘With cover’ will give you a life cover, a lump sum amount is paid to your family in the event of your death. ‘Without cover’ implies you do not get any life cover. The amount built till the date of your death is paid to your dependents. Deferred annuity is with cover and immediate annuity plans are without cover.

    • Annuity Certain

      Annuity is paid for a specific period. If he dies before that period, the beneficiary receives the amount.

    • Guaranteed Period Annuity

      Annuity is paid for certain periods regardless of the survival of the annuitant.

    • Life Annuity

      Pension is paid till the annuitant’s death. If with spouse options is chosen, then the pension will be paid to the spouse.

    • National Pension Scheme

      This is introduced by the government. You have the option of withdrawing 60% of the amount at retirement and the rest is used to purchase annuity. The maturity amount is not tax free though.

    How to Choose The Right Pension Plan?

    With the variety of pension plans available in the market, it could be a challenge to choose the one which suits your requirement best. However, before you invest in a pension plan, there are some basic parameters you must evaluate.

    • Returns – The most important part of any investment is the return it provides. Chose a pension only after you have a fair idea about the returns it would provide. Always keep in mind that if returns are guaranteed, the rate of returns will be low. Choose an option which provides high returns.
    • Liquidity – While most pension plans will have a lock-in period, during which you cannot withdraw the invested funds, there may be some plans available which offer a certain degree of flexibility in terms of withdrawal.
    • Tax Benefits – Insurance payments can help you save on tax payments to a certain extent. The same goes for pension plans. Before you invest in one, ensure that you find out the tax implication that the plan will come with.
    • Tax Exemption of Dividend / Interest – Another factor to consider when looking or pension plans is the tax exemption of the interest or dividend which you’re going to receive. Most pension mutual fund dividends are not exempt from tax.
    • Minimum & Maximum Investment Amount – Different pension plans carry different limits in terms of the minimum and maximum investment which can be made towards the plan. Check this before you invest so you can plan your budget accordingly.
    • Investment Mix – This factor comes into play only with regard to pension plans which are offered as part of a mutual fund. Find out the investment mix offered by the pension plan. While, usually the schemes are balanced, they may change over time.  
    • Additional Benefits – Retirement plans offer are often accompanied by a string of additional benefits like life cover, tax advantage, etc. Find out the additional benefits which different plans offer, before you make your selection.

    Eligibility Criteria for Pension Plans:

    In order to be eligible for a pension plan, individuals must fall within a certain age group, usually between 35-75 years. This age bracket (min-max age) may differ with different insurance providers.

    Pension Plan Riders:

    Most pension plans come with add-on riders which can be taken to enhance the benefits provided by the plan. some of the commonly available riders include:

    • Accidental death and dismemberment rider
    • Term rider
    • Critical illness rider
    • Waiver of premium rider

    Popular Pension Plans Available in India:

    SBI Life – Annuity Plus

    With this plan you can choose your annuity options. You can enjoy the following:

    • Regular income from the age of 40.
    • Lifetime annuity pay-out is paid for you and your family.
    • You can choose the frequency of the pay-outs.
    • You can add a rider, SBI Life- Accidental Death Benefit Rider.
    • You get the following options: Single Life annuity, Lifetime income with Balance Capital Refund, Lifetime income with Annual increase of 3-5%, lifetime income for 5, 10, 15 or 20 years, Two Lives’ Life Annuity.
    • You can avail tax benefits as per the tax laws prevailing in India.

    HDFC Life New Immediate Annuity Plan

    • Get guaranteed income for as long and you and your spouse lives.
    • Choose from the wide variety of annuity options.
    • Choose the frequency of annuity.
    • Death benefit on certain annuity options are payable.
    • Tax benefits can be availed and they are subject to the tax laws in India.

    ICICI Pru Immediate Annuity

    You need to make a one-time payment or choose from the 5 pay-out option. You get 4 modes of pay-out i.e. monthly, quarterly, half-yearly or yearly. The pay-out options are as follows:

    • Annuity for life.
    • Annuity for life with return of purchase price.
    • Joint life, last survivor without purchase price return.
    • Joint life, last survivor with purchase price return.
    • Guaranteed annuity for 5, 10 or 15 years.

    Reliance Immediate Annuity Plan

    This is a single premium plan. You can avail the following benefits from this plan:

    • Earnings can be converted to regular income.
    • You can get regular income for your entire life.
    • You can leave some funds for your dependents.
    • Receive tax benefits as per tax laws prevailing in India.

    BSLI Immediate Annuity Plan

    You can avail the following benefits with this plan:

    • You can get regular income in your retirement.
    • You can choose the frequency of the pay-out.
    • You need not have to undergo a medical test to avail this policy.
    • You can enjoy tax benefits under Section 80CCC of the Income Tax Act, 1961.

    Pension Plan FAQs

    1. Can I make an early withdrawal from my pension plan?

      A. Early withdrawal from retirement plans may be allowed. However, there are certain government regulations applicable on early withdrawal from retirement policies. Do check with your insurer regarding early withdrawals before you invest in a certain plan.

    2. What is Death Benefit under a Pension Plan?

      A. In a pension plan, Death benefit is defined as the amount which will be paid on the passing away of the insured to the beneficiary of the insured, named in the policy.

    3. Are there any tax benefits accompanying Pension Plans in India?

      A. Yes, Pension Plans do provide tax benefits to the policy holder. Under section 80CCC of the Income Tax Act, premiums which you pay towards your Pension Plan will be subject to deduction up to the maximum amount of Rs 10,000 on your taxable income.

    4. What is meant by Annuity in a Pension Plan?

      A. Annuity is the term used to define the systematic payouts which you receive from your pension plan after your retirement. Most pension plans will allow individuals to avail annuity payouts on a monthly, quarterly, half-yearly or yearly basis.

    5. Can I apply for a Pension Plan online?

      A. Yes, most insurance providers have comprehensive websites which not only allow for viewing of different pension plans but also allow them to apply for a plan of their choice online.

    6. Can I make the premium payment for my Pension Plans online?

      A. Yes, online payment of premium can be done very easily. Most insurers do have a secure payment system in place to enable policy holders to pay their premiums online in a timely manner, without having to visit the branch office.

    7. I want to change my premium payment frequency for my Pension Plan. Can it be done?

      A. If you wish to change your premium payment frequency, you are advised to contact your insurance provider for the same as the facility may or may not be allowed by different insurers.


    Products you might be Interested


    News About Annuity/Pension Plan

    • Atal Pension Scheme to get tax benefits on par with National Pension System

      The Income Tax Department recently announced that investments made towards the Atal Pension Yojana (APY) will enjoy the same tax benefits offered by the National Pension System. Estimates show that over 20 lakh members have joined the APY since its inception in June 2015. With the government contributing 50% to the investment made by a member under this scheme, it has garnered great attention. With a minimum term of 20 years, added income tax benefits are bound to bring new members under its fold.

      23 February 2016

    • FDI of Insurance Companies with pension plan under scrutiny

      Foreign Direct Investments of Insurance companies with pension ventures is under a lot of scrutiny owing to lack of clarity on how foreign limit investment limit in the pension sector should be calculated. The Foreign Investment Promotion board had recommended a foreign investment proposal worth Rs.1,705 crore for the consideration of cabinet committee on Economic affairs.

      25 January 2016

    • CPPIB invests a whooping Rs.1,000 crore in Larsen & Toubro

      Canada Pension Plan Investment Board invested a whooping Rs.1,000 crore in Larsen & Toubro’s infrastructure arm. This is the second tranche investment made by the company in the engineering major Larsen & Toubro. The first tranche of investment was in December 16, 2014 where the company invested Rs.1,000 crore.CPPIB's subsidiary has made the second tranche of investment today by subscribing to compulsorily convertible preference shares of L&T IDPL

      16 December 2015

    • Retirement planning is important for all

      With a proper asset allocation plan, one can secure one’s retirement. Talking about the importance of retirement planning, Nilesh Shah, the Managing Director of Kotak Mutual Funds says that that the pattern of living life has changed and it is important that your plan for your retirement rather than simply relying on your parents. Because, the option of relying on your children no longer seems to work. According to him, you can plan your retirement by allocating your assets into various investment tools such as equity, real estate, debt and commodities. It helps people maintain a good financial health and ensure a secured financial future.

      8 December 2015

    GST of 18% is applicable on life insurance effective from the 1st of July, 2017

    Annuity/Pension Plans Reviews

  • Page 1 of 50 1 2 3 4 5
    • LIC Life Insurance
      "Trusted Policy"
      0.5 3.0/5 "Satisfactory"
      I do online payment for this LIC policy. Good life secured policy. I found LIC is trustworthy to invest. I've been holding this policy more than 8 years. Risk coverage policy. Accidental and death benefitable policy. I used to pay the premium of Rs. 5000 every month. Its a life time policy. After 60 years it will get matured. I will get a sum assured amount of Rs. 10 lakhs
      Was this review helpful? 0
      , gurgaon
      Reviewed on Jun 20, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 4.0/5 "Great!"
      I am using the life insurance policy from the LIC for which I am paying a premium of almost 1 lac. Their services are good and never faced any issues so far. The payment options are also nice with the LIC. Being a Govt company the security for investment is certainly there with the LIC,
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jun 20, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've been using the LIC Bharti Jeevan Policy for a while. I pay a premium of 21000 per year. I make payments Via Cheque.. The service is good. No issues so far. The tenure of the policy is 15 years. Overall it has been a hassle free experience with the LIC and their services.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 20, 2018
    • Exide Life Insurance
      "Average Service"
      0.5 3.0/5 "Satisfactory"
      I've been using the Life insurance policy from the Exide Life for a while. The response is not good. I pay a premium of 2000 per year via ECS. The premium gets auto debited from the account as it is more convenient for me. So far it has been a useful insurance policy to have.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 20, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 4.0/5 "Great!"
      I've a life insurance policy with the LIC. I am paying the premium 11000, per year. The service good. It is so easy to make payments for this policy. I never faced any issues with their services. Being a govt company the security for my investment is guaranteed with the LIC.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 20, 2018
    • Max Life Insurance
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've a life insurance policy with the Max Life and I pay a premium of 600 per Month, I make payments online and the sum assured is 1 Crore. My friend is an agent and never faced any issues with their service so far. Overall it has been a hassle free experience with them.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 20, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 4.0/5 "Great!"
      I've been using the LIC Jeevan Tarang Policy for a while. It is take for my children. The tenure of the policy is 18 years. It can also be converted to a pension scheme where my children will be getting 28000 per year as a part of the plan. It is a useful policy and recommendable.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 20, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 4.0/5 "Great!"
      I've been using the LIC Bhima Gold Money back policy for a while now. I will get cash back every 5 years via DD. I pay a premium of 700 monthly for this policy. It is a very useful policy considering the low premium I pay. Overall it has been a good experience with the LIC and their services.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 20, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 4.0/5 "Great!"
      I've a Jeevan Anand policy with the LIC. I am paying the premium of 500 per month. It is too easy to make payments and I never faced any issues with their services. Being a govt company the security is there with the LIC Overall it has been a good experience .
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 20, 2018
    • LIC Life Insurance
      "Better policy to use"
      0.5 5.0/5 "Blown Away!"
      I got the life insurance policy long back. This policy has the tenure of 20years. The plan benefits and the coverage is good with this policy . I would say i am satisfied having the Life insurance policy with Life Insurance Corporation of India.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 20, 2018
    • LIC Life Insurance
      "Wonderful"
      0.5 3.5/5 "Pretty good"
      I am having the life insurance policy with the LIC of India. I would like to say that the customer service is good one and the response is better one too. Policy coverage value is good too with them. I am happy with the LIC of India.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 20, 2018
    • LIC Life Insurance
      "Excellent"
      0.5 4.5/5 "Excellent!"
      I am having the Life Insurance policy with the Life Insurance Corporation of India. I would like to say that the customer service is also very good too and the response is good too. Coverage value is fine one too with the LIC of India.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 20, 2018
    • LIC Life Insurance
      "Best"
      0.5 4.5/5 "Excellent!"
      Customer service is not experience with the Life Insurance Corporation of India, Policy coverage is good and I have taken two policy with the Life Insurance Corporation of India. Everything is better one with them till now.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 20, 2018
    • ICICI Prudential Life Insurance
      "EXCELLENT"
      0.5 5.0/5 "Blown Away!"
      The tenuity period is for 10 years. I have been using since 2016 and i am happy by using the life insurance. The payment i do through the on line for monthly once. Apart from that the documentation i have done through the physically at my doorsteps.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jun 20, 2018
    • Max Life Insurance
      "EXCELLENT"
      0.5 5.0/5 "Blown Away!"
      I have been using since 5 years. I am very happy by using the MAX LIFE INSURANCE. i had a excellent experience with the life insurance. The tenuity period is for 10 years and it is a short term policy from life insurance. I have been using because i am happy holding this insurance policy.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jun 20, 2018
    • HDFC Life Life Insurance
      "Good "
      0.5 4.0/5 "Great!"
      I am having the life insurance policy with the HDFC life and the customer service is good too. I would like to say that everything is good and their response too. I am happy with them till now and everything is better with the HDFC life insurance company.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 20, 2018
    • LIC Life Insurance
      "LIC is a very good policy"
      0.5 5.0/5 "Blown Away!"
      I have taken this LIC Jeevan Tarang policy 10 years before. I don't remember about the plans and benefits. I'm paying the premium amount of rs. 10000 six months once. I will come to know about the benefits when the maturity arrives. Total tenure of the policy is 12 years. Sum assured amount is 8 lakhs. Death benefits, Risk coverage and Accidental benefits are available. I used to make the payment through cash. My brother working as LIC agent and he suggested this policy.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 20, 2018
    • Bajaj Allianz Life Life Insurance
      "Best product offerings"
      0.5 4.0/5 "Great!"
      I have three policies from Bajaj Allianz life. The premium gets auto debited from the account(Check details here : https://www.bajajallianzlife.com). I don't have to worry about the due date and this makes life so much easier. The agents are very friendly and in case of any discomfort, they have always helped me understand and sort things out. I recommend Bajaj Allianz to everyone over any other company in the market
      Was this review helpful? 0
      , pune
      Reviewed on Jun 19, 2018
    • LIC Life Insurance
      "Good policy"
      0.5 5.0/5 "Blown Away!"
      I have taken life insurance from LIFE INSURANCE CORPORATION OF INDIA and the yearly premium is 30000. The total maturity period is for 20 years. After the maturity period i will get the sum assured and the interest. I mostly do cash payment.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 19, 2018
    • LIC Life Insurance
      "Good Policy"
      0.5 4.0/5 "Great!"
      I have a life insurance policy with LIC from last 14 years and it is a long term policy. I am happy with the returns and benefits of this policy. I pay my premium once in 3 months by cash and i am convenient with the payment options. The maturity period for this policy is after 23 years.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Jun 19, 2018
    Common Loader Icon
    Page 1 of 50 1 2 3 4 5
  • reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.