Retirement is one of the most important events of a person’s life and being prepared for it is an assurance that every person needs to have. People need to be able to gift himself the certainty of a regular income throughout the waning years of their lives. Life retirement plans offer the insured with the security of knowing that their hard earned money is invested safely post retirement. With the advent of new technology, life expectancy has increased in the last few decades, thus creating a need for post-retirement care and the requirement for funds to cater to medical expenses, etc.
Reliance Retirement plans ensure that the insured does not have to compromise on his lifestyle even after he has stopped earning. A sufficient retirement fund will aid the insured to lead a comfortable retirement life with the independence that he has earned.
Types of Reliance Retirement Plans
There are two types of retirement plans that Reliance Life Insurance offers.
- Reliance Smart Pension Plan and
- Reliance Immediate Annuity Plan.
Reliance Smart Pension Plan
Reliance Smart Pension Plan allows the insured to make a successful retirement plan by starting early to build a retirement fund. With the ever increasing inflation, it would be good thinking to start building a retirement fund early. This plan allows the insured to start saving systematically in order to build the lump sum that is required to provide a steady income post retirement.
Benefits of Reliance Smart Pension Plan
The insured can build an adequate retirement portfolio by choosing a policy term that is most suitable to him under the Reliance Smart Pension Plan. This plan allows the insured to get equity participation while getting the capital guarantee.
Loyalty additions can be used to enhance the insured’s retirement portfolio. Extra lump sums can be added as Top Ups to increase the insured’s retirement fund. The Reliance Smart Pension Plan allows the insured to choose the age of his retirement from anywhere in the range of 45 years to 75 years.
The insured can also choose to extend his retirement age if required. Furthermore, the insured will receive a steady income depending on the annuity he chooses. Tax-free withdrawals of 1/3rd of the accumulated funds upon retirement give the insured the freedom to fulfil immediate needs.
The Reliance Smart Pension Plan protects the insured’s family by giving minimum guaranteed amount based on the amount of premiums paid in case of the unfortunate death of the insured.
Moreover, tax benefits can be availed on investments as well as on returns as per the Income Tax laws.
Why Reliance Smart Pension Plan?
Reliance Smart Pension Plans allows the insured to build a retirement fund for the future and also lets the insured decide his retirement age. It gives the insured the freedom to live an independent life while ensuring a regular income for the insured’s lifetime. Reliance Smart Pension Plans also offers tax benefits as applicable.Example
Vasco, who is 34 years old opts for the Reliance Smart Pension Plan with a premium payment term of 10 years. He chooses the policy term to be of 20 years. Vasco pays an annual premium of Rs. 50,000.
Vasco receives an equity participation of 20% with a minimum guarantee of Rs. 5,05,000 upon vesting and loyalty additions are accrued on his policy account.
Upon vesting, Vasco receives two options-
Either Vasco can commute up to 1/3rd of the fund value buy annuity guaranteed for life from the balance.
On the other hand, Vasco could choose to invest the entire fund value to buy annuity guarantee for life.
Reliance Immediate Annuity Plan
Reliance Immediate Annuity Plan allows the insured to convert lump sum amounts into a regular income for life. It gives the insured the power of gifting himself a salary for life. The insured will receive regular annuity income based on the annuity option that he has opted for and the payout frequency that he has selected.
Benefits of Reliance Immediate Annuity Plan
Reliance Immediate Annuity Plan requires the insured to make a one-time payment which requires him to pay the premium for the policy only once. This plan gives the insured guaranteed income for his whole life.
The flexibility offered by the plan gives the insured the opportunity to choose from three different payout options namely, monthly, quarterly, half yearly and yearly. Not only does this plan furnish the insured with life annuity but it also gives it with the return of purchase price.
Moreover, a life annuity is guaranteed for 5 years, 10 years or 15 years and is payable for life thereafter. To top that, Reliance Immediate Annuity Plan provides the insured with ease of enrolment as it does not require any medical tests. The insured also receives tax on premium paid as well as benefits received in accordance with the Income Tax laws.
Why Reliance Immediate Annuity Plan?
Reliance Immediate Annuity Plan provides the insured with the chance to convert earnings into a steady income. The insured can get steady income (annuity) for the rest of his life while leaving behind a legacy for his family. The insured can live life to the maximum with Reliance Immediate Annuity Plan while receiving tax benefits.Example
Salim opts for Reliance Immediate Annuity Plan by paying a lump sum of Rs.5 Lakhs. He receives a guaranteed income of Rs. 2,371 per month for the rest of his life. In the unfortunate event of his death, Salim’s nominee receives the purchase price of Rs. 5 Lakh as lump sum death benefit.Tip: Consider the effect of inflation and rising costs when deciding coverage required during post-retirement years
Retirement is the time of life when every individual must be able to live without any stress and pension plans grants this convenience of a tension free retirement for the insured.
Other Reliance Life Insurance Plans
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GST of 18% is applicable on life insurance effective from the 1st of July, 2017