Best Pension Plan in India

Pension plans are specifically designed to secure the financial future of individuals post-retirement. They work by allowing individuals to contribute a portion of their earnings throughout their working years. These contributions grow over time, generating returns and building a pool of funds. Some of the best retirement plans in India cater specifically to the unique needs and preferences of NRIs.

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What is a Pension Plan in India?

A pension plan in India is the best investment plan to provide you with a life cover along with regular income during your retirement years. 

It involves you contributing a portion of your earnings to a pension fund managed by the insurance company. The accumulated funds are invested in market-linked investment options to generate high returns. Upon maturity, you receive regular pension payments.

Investing in the best pension plan in India ensures financial security and stability for you and your family after you cease working.

List of Top 10 Pension Plans in India in 2024 for NRI

The following table shows the overview of the best retirement plans in India for an NRI in 2024:

Pension Plans in India Entry Age Maturity Age Policy Term Tax Benefit
Tata AIA Fortune Maxima  18 - 60 years  100 years  100 minus issue age  Offers  Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961
Bajaj Allianz Life LongLife Goal 18 - 65 years 99 years of age 99 years - Entry age Offers  Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961
HDFC Life Click 2 Wealth 18 - 60 years  18 - 75 years of age 20 - 64 years Offers  Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961
Max Life Online Savings Plan  18 - 60 years  18 - 45 years  5 - 67 years  Offers  Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961
Edelweiss Life Tokio Wealth Secure Plus 18 - 60 years  18 - 70 years 5 - 25 years  Offers  Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961
ICICI Prudential Signature  18 - 75 years  99 years  10 - 30 years Offers  Tax benefits u/s 80C and 10 (10D) of the Income Tax Act, 1961
Tata AIA Life Guaranteed Monthly Income Plan 6 - 60 years 68 years 5, 8, 12 years Offers tax benefit U/S 80C & 10(10D) of IT Act
Bajaj Allianz Pension Guaranteed Pension Plan 0 - 100 years N/A Lifetime Offers tax benefit U/S 80C & 10(10D) of IT Act
Max Life Forever Young Pension Plan 30 - 65 years 50 - 75 years 10 to 75 years-Entry age Offers tax benefit U/S 80C of IT Act
ICICI Pru Easy Retirement Plan 18 - 70 years 30 - 80 years 10, 15, 20, 25, 30 years Offers tax benefit U/S 80C & 10(10D) of IT Act
LIC Jeevan Akshay 7 Pension Plan 25 - 100 years N/A Lifetime Offers tax Benefit U/S 80C of IT Act
LIC New Jeevan Shanti Pension Plan 30 - 79 years 31 - 80 years -- Offers tax Benefit U/S 80C of IT Act
Max Life Guaranteed Lifetime Income Pension Plan 0 - 85 years 26 - 90 years N/A Offers tax benefit U/S 80C IT Act
Aditya Birla Sun Life Empower Pension Plan 25 - 70 years 80 years 5-30 years Offers tax benefit U/S 80C of IT Act
IndiaFirst Life Guaranteed Annuity Plan 40 - 80 years N/A Lifetime Offers tax benefit U/S 80C IT Act
Kotak Premier Pension Plan 30 - 60 years 45 - 70 years  10 - 30 years Offers tax benefit U/S 80C of IT Act.
SBI Life Saral Retirement Saver 18 - 65 years 40 - 70 years 5, 10 to 40 years Offers tax benefit U/S 80C of IT Act
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Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer. The tax benefit is subject to changes in tax laws. *Standard T&C Apply

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Types of Pension Plans in India for NRI

A variety of pension plans that are designed to meet your retirement needs are available in India:

  • Deferred Annuity

  • Immediate Annuity

  • Annuity Certain

  • Defined Contribution

  • With & Without Cover Pension Plan

  • Guaranteed Period Annuity

  • National Pension Scheme (NPS)

  • Defined Benefit

  • Life Annuity

  • Pension Funds

  • Whole Life ULIPs

Details of Different Types of Pension Plans in India for NRI:

Term Description
Deferred Annuity
  • You can build a corpus through regular or one-time premium payments
  • The invested amount is locked for a period of 5 years, during which you can make partial withdrawals
  • Pension payments of a Deferred Pension Plan begin at a future date
  • Allows for the accumulation of funds during the deferral period
  • The most preferred pension plan in retirement planning
  • Tax benefits available under Section 80C and 10(10D) of Income Tax Act, 1961
Immediate Annuity
  • Offers regular payments immediately after the initial lump sum contribution or premium payment
  • You can choose from various annuity options
  • You can avail of tax benefits on the invested amount
  • Provides death benefits to the nominee in case of your unfortunate demise
Annuity Certain
  • Provides guaranteed payments for a specific period, irrespective of whether you live or die during that period
  • You can choose the investment period as per your preference
  • In case of your uncertain demise before receiving all payments, the beneficiary receives the remaining annuity
Defined Contribution
  • Retirement plan where the employer, employee or both make contributions into an individual account
  • The contribution is pre-determined as per your need
  • Retirement amount depends on contributions and investment returns
With & Without Cover Pension Plan
  • With Cover: Includes life insurance coverage along with pension benefits
  • Without Cover: Focuses solely on providing pension benefits without life insurance
Guaranteed Period Annuity
  • Provides a guaranteed annuity payment period
  • Ensures that annuity payments will continue for a specified duration even after your demise
National Pension Scheme (NPS)
  • A voluntary, long-term pension scheme in India which helps to ensure systematic savings for the future
  • Introduced by the Indian Government for retirement security
  • It invests your funds in equity and debt funds for market–linked returns
  • 60% withdrawal at retirement, and 40% used for annuity purchase
  • Maturity proceeds are taxable
Defined Benefit
  • Retirement plan where the employer promises a specified pension amount
  • Calculations of pension payments are based on factors like salary history and years of service
  • Guarantees a specific retirement income for life
Life Annuity
  • Offers regular payments throughout your lifetime
  • The pension ceases upon your demise
  • 'With the spouse' option transfers the pension to the spouse upon your death
Pension Fund (PF)
  • Government-regulated long-term pension scheme
  • Offers better returns at maturity
  • Active for a specified period
  • Allows annuity withdrawal during aggregation for financial security
Whole Life ULIPs
  • Unit Linked Insurance Plans (ULIP) with a life cover component
  • Combines investment and insurance, providing benefits throughout your lifetime
  • Tax benefits on investment amount and earned income
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Benefits of Pension Plans in India for NRI in Singapore

You can avail of numerous advantages by investing in a pension scheme in India. Some of the most important ones are as follows:

  • Annuity: An annuity is a fixed annual payment that you receive throughout your lifetime. An annuity can either be immediate or deferred, depending on your preference.

  • Death Benefit: Pension plans in India also provide a death benefit to the nominee in case of your unfortunate demise. This ensures that the family is financially secure even after the death of the breadwinner.

  • Choice of Investment Options: NRIs have a wide range of investment options to choose from when it comes to pension plans in India. You can invest in equity funds, debt funds, or a combination of both.

  • Early Withdrawal: You can also withdraw a part of your pension corpus before retirement under certain circumstances, such as medical emergencies or higher education expenses.

  • Flexible Withdrawal Options: NRIs can choose from a variety of withdrawal options, such as lump sum withdrawals, regular annuity payments, or a combination of both.

  • Tax Benefits: You can avail tax benefits on your pension contributions under Section 80C and Section 10(10D) of the Income Tax Act, 1961.

Eligibility Criteria for NRI in Singapore

  • Entry Age: You can join a Pension Plan when you are at least 18, though some plans might start at 30. The upper limit for entry is usually around 70.

  • Premium: To get a Pension Plan, you need to pay a minimum premium. The pension you receive depends on how much premium you have paid.

  • Vesting Age: Vesting age is the point at which you begin receiving a monthly pension from your pension plan.

  • Payment Period: The payment period is when you start receiving payments after retirement.

  • Accumulation Period: The accumulation period covers the entire duration during which you make regular premium payments towards your policy or plan.

Advantages of Best Retirement Plan in India for NRI in Singapore

Benefits of Pension PlanBenefits of Pension Plan

Some of the several advantages of having the best pension plan in India for Non-Resident Indians (NRIs) in Singapore are as follows:

  • Financial Security: Pension plans provide you with a reliable source of income after retirement. This ensures financial stability during your golden years.

  • Tax Benefits: Pension plans often come with tax advantages, allowing you to optimize your financial planning and reduce your tax liabilities, both in India and Singapore.

  • Currency Diversification: By investing in Indian pension plans, you can diversify your investment portfolio and gain exposure to the Indian rupee. This allows you to gain potential benefits from currency appreciation.

  • Long-Term Savings: Pension plans encourage disciplined and long-term savings. This helps you to build a substantial retirement corpus over time to meet your future financial needs.

  • Flexible Investment Options: Many pension plans offer a range of investment options, allowing you to tailor your portfolio based on your risk tolerance and financial goals.

  • Repatriation Benefits: Some pension plans provide options for the repatriation of funds. This enables you to bring back your accumulated savings to Singapore or any other country of residence.

  • Nomination Facility: Pension plans typically offer a nomination facility. This ensures that the accumulated benefits are seamlessly transferred to the nominee in the event of your demise.

  • Inflation Hedge: Pension plans often come with features that help protect against the impact of inflation. This allows you to maintain the purchasing power of your accumulated corpus over the years.

  • Peace of Mind: Having a pension plan in place gives you peace of mind, knowing that you have a structured financial instrument to support your lifestyle and expenses during retirement.

  • Social Security Net: Pension plans serve as a form of social security, providing you with a reliable income stream and reducing dependence on family or external support during retirement.

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Points to Consider for NRI for Investing in Best Pension Plans in India

You need to consider the following key aspects before starting to invest in the best pension retirement plans in India:

  • Regulations and Eligibility:

    • You need to understand the regulatory framework for NRI investments in Indian pension plans.

    • Check eligibility criteria and ensure compliance with relevant regulations.

    • For Example: Annually in November, you need to submit a life certificate either from the Indian Embassy or your local bank in the country where you currently reside.

  • Currency Considerations:

    • Evaluate whether contributions and payouts are in Indian Rupees or foreign currency.

    • Assess the impact of currency fluctuations on returns.

  • Account Type:

    • Open a Non-Resident Ordinary (NRO) account with an Indian bank, as your pension will be credited to your NRO account.

    • If you have an existing domestic savings account in India then inform your pension plan provider and corresponding bank of your NRI status. Request conversion of your domestic bank account into NRO account

  • Tax Implications:

    • Be aware of the tax implications in both India and the NRI's resident country.

    • Understand the Double Taxation Avoidance Agreements (DTAA) that may apply.

  • Repatriation of Funds:

    • Understand the rules and procedures for repatriating pension funds.

    • Confirm the ease of transferring funds back to the NRI's country of residence.

  • Nomination Process:

    • Nominate beneficiaries to ensure a smooth transfer of benefits in the event of the investor's demise.

    • Keep nomination details updated.

  • Monitoring and Management:

    • Stay informed about the performance of the pension plan.

    • Consider professional financial advice for effective portfolio management.

  • Exit Options:

    • Understand the exit options and withdrawal rules.

    • Plan for the maturity or premature withdrawal of the pension plan.

  • Risk and Returns:

    • Assess the risk profile of the chosen pension plan.

    • Balance potential returns with the level of risk acceptable to the investor.

  • Inflation Protection:

    • Choose pension plans that offer features to counter the impact of inflation.

    • Ensure the plan provides a reasonable real rate of return.

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Why Should an NRI Start Investing Early in Pension Plans in India?

Investing early in a Pension Plan in India provides various benefits to you, such as the following:

  • Long-Term Financial Security: Early investment ensures a substantial corpus for a comfortable retirement.

  • Power of Compounding: Starting early maximizes compounding, multiplying your wealth over time.

  • Currency Advantage: NRIs benefit from favourable currency exchange rates during investment.

  • Tax Benefits: You can avail tax advantages early on for your contributions and withdrawals as per Indian tax laws.

  • Mitigating Inflation: Beat inflation by building a robust pension fund through early investments.

  • Flexibility and Control: Start early to have greater control over your investment strategy and goals.

  • Financial Discipline: Inculcate a habit of regular saving and disciplined financial planning.

  • Peace of Mind: Early pension planning ensures a stress-free and financially secure retirement for NRIs.

Steps to Buy the Best Pension Plan for NRI

The following is a step-by-step guide to purchasing the best retirement plan from Policybazaar:

Step 1: Assess your retirement needs- Think about your retirement goals and lifestyle, calculate your estimated expenses in retirement, and consider your current financial situation and obligations.

Step 2: Research and compare pension plans- Explore different pension plans offered by Policybazaar. Ensure that you read reviews and compare ratings of different plans. You need to compare the features, benefits, and costs of various plans. 

Step 3: Review terms and conditions- Thoroughly examine the terms and conditions of the retirement plan. Understand the vesting period, contribution limits, and withdrawal restrictions.

Step 4: Choose the best plan for you- Consider your retirement goals, financial situation, and risk tolerance. Select a plan that offers the features and benefits that are most important to you.

Step 5: Buy the plan online or offline- Policybazaar offers the convenience of buying pension plans online or offline. You can also contact a Policybazaar representative to help you with the process.

Step 6: Monitor and review your plan- Regularly track the historical performance of your pension plan. Always monitor your plan and adjust your contributions or investment strategy as needed.

FAQ's

  • What is a pension plan in India?

    A pension plan in India is a type of investment plan that helps you to save and invest for your retirement needs. It allows you to accumulate a pool of funds by making either a lump sum investment or regular premium payments over a period. These plans provide a steady income stream during your retirement years, ensuring financial security and independence.
  • What is the pension plan in Singapore?

    The Central Provident Fund (CPF) is the main pension plan in Singapore. It is a mandatory social security system that covers all Singapore citizens and permanent residents who are employed. It is a comprehensive savings scheme that provides for retirement, healthcare, housing, and education needs.
  • Which bank is best for pension?

    Some of the top banks for pension plans in India include:
    • State Bank of India (SBI)

    • HDFC Bank

    • ICICI Bank

    • Kotak Mahindra Bank

    • Axis Bank

  • What is the most common pension type?

    The most common pension type in India for NRIs (Non-Resident Indians) is an Annuity Plan and National Pension Scheme (NPS).

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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