₹ 20,000
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Peaceful Post-Retirement Life
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Tax-Free* Regular Income
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Wealth Generation to beat Inflation
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- 15.8 Crore Registered Consumer
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- 7.16 Crore Policies Sold
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Retirement and Pension Plans in India
Find the right pension plan, starting at ₹3k/month
Start Investing ₹10k/Month & Build a corpus of ₹1 Crore# on Retirement
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Written By: Sameep Singh
Sameep Singh Business Unit Head - Domestic Savings
Mr. Sameep Singh is a Business Unit Head for the domestic Investment Business at policybazaar.com, holding a master's from Symbiosis School of Banking & Finance. He has played a pivotal role in crafting investment and term business strategies during his tenure at Policybazaar. His exceptional leadership has been instrumental in driving both product and business growth throughout his impressive career.
Reviewed By: Vivek Jain
Vivek Jain Chief Business Officer – Life Insurance, Policybazaar
Mr. Vivek Jain, Chief Business Officer – Life Insurance at Policybazaar, is a seasoned business leader with over a decade of experience across strategy, customer experience, and digital transformation in financial services. An alumnus of IIM Calcutta, he leads Policybazaar's life insurance business with a focus on helping Indian families build financial resilience through protection, long-term savings, and wealth creation. A strong advocate of goal-based financial planning and disciplined investing, his expertise spans ULIPs, guaranteed savings and child plans, retirement planning, NRI investments, and tax-efficient wealth creation. His perspectives have featured in The Economic Times, Mint, Financial Express, Zee Business, Gulf News, and Rediff.
What Are Retirement Plans and Pension Plans?
A retirement plan is a financial strategy to build a retirement fund. The plan takes into account how much money you need to invest, how big should be the corpus, and what investment products are best for your approach. A pension plan is the specific financial tool/product through which you accumulate your savings into regular, lifelong income. While closely related, a retirement plan and a pension plan serve two specific functions in your long-term strategy:
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Retirement Plan: A retirement plan is your overall strategy to save and compound money during your working years. While planning for retirement, you must also think of payout types and tax implications on your retirement savings.
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Pension Plan: A pension plan is the tool that helps you accumulate your investments and convert them into a guaranteed periodic income stream (an annuity) to cover your expenses after retirement. You can choose a pension plan from a wide range of options, including NPS, insurance-based pension plans, and other market-linked investments.
Key Reasons to Start Retirement Planning Early
Planning for retirement ensures financial independence and a stable lifestyle when your regular paycheck stops. It protects you from inflation, covers rising medical bills, and prevents financial dependence on family.
Maintaining Living Standards
A dedicated pension plan replaces active income with guaranteed payouts so you never have to compromise on your standard of living post-retirement.
Beating Medical Inflation
Healthcare costs in India grow by 11–13% annually. A dedicated retirement fund covers hospitalizations and insurance premiums without eroding your life savings.
Staying Prepared for Economic Shocks
Global market volatility, geopolitical conflicts, and inflation shocks impact personal savings. Structured pension plans offer long-term capital protection.
Adapting to Nuclear Families
As urban living shifts toward nuclear households, self-funded security replaces traditional family buffers.
Bridging Social Security Gaps
Mandatory savings like EPF or NPS provide a baseline, but they rarely replace 100% of pre-retirement income. Personal retirement plans bridge this gap.
Benefitting from Power of Compounding
Starting early allows small regular contributions to multiply exponentially over time, requiring less out-of-pocket capital to hit your target corpus.
6 Factors to Calculate Your Retirement Corpus
A general rule of thumb is that your retirement corpus should be 20 to 30 times your annual expenses at the time of retiring. For a lifestyle requiring ₹50,000 a month today in an Indian metro, you may need a target corpus between ₹1.87 crore and ₹5 crore, depending on your age, inflation, and medical care costs. A pension calculator helps you estimate how to be financially prepared for these future expenses. With the best retirement plan, you can reach such financial security in the long run.
Post-Retirement LifestyleTrack your current monthly spending and adjust for future shifts. While work-related commute costs may decrease, utilities and healthcare costs usually rise.
Time HorizonThe number of years remaining until age 60 determines your compounding duration. A longer timeline allows smaller regular investments to build a substantial fund.
Inflation ImpactWith an average inflation rate of 5–6% in India, living costs double roughly every 12 to 14 years. Your target corpus must cover future inflated prices, not today's expenses.
Rising Healthcare ExpensesMedical inflation runs higher than general living costs. Because health expenses are non-negotiable, allocate a dedicated medical cushion or comprehensive health insurance buffer.
Pre-Retirement MilestonesCalculate major life events (such as children's higher education or marriage) separately, so they do not eat into your primary retirement savings.
Expected Rate of Return (ROI)Choose a balanced investment strategy that combines equity growth with fixed-income security to ensure your money outpaces inflation. Use a pension plan calculator to create a strategy that works for you.
How to Choose a Pension Plan for the Payout You Need
Whether you need a monthly pension of ₹10,000 or are planning for a bigger retirement income, a tried and tested investment approach is much needed. Check out the ways to build the retirement fund you need according to your lifestyle.
Finding the Best Pension Plan in India
Here's a list of some of the best retirement plans in India. This comparison lets you consider the minimum investment amount, payment option, etc. Note that in Regular Pay you pay premiums (monthly/quarterly/half-yearly/yearly) throughout the entire policy term. In Limited Pay, you pay for a specific shorter period. One Time is the lump-sum investment option.
| Name of the Pension Plan | Minimum Investment (yearly) | Payment Options# | |
| Axis Max Life Forever Young Pension | ₹36,000 | Regular Pay/Limited Pay | Get Details |
| Bajaj Life Smart Pension Plan | ₹36,000 | Single Pay/Limited Pay/Regular Pay | Get Details |
| Bandhan Life iInvest Pension Plan | ₹36,000 | Single Pay/Limited Pay/Regular Pay | Get Details |
| Canara HSBC EZ Pension Plan | ₹36,000 | Single Pay/Limited Pay/Regular Pay | Get Details |
| HDFC Life Click 2 Retire Plus II | ₹36,000 | Regular Pay/Limited Pay | Get Details |
| ICICI Prudential Signature Pension | ₹36,000 | Limited Pay/One Time | Get Details |
| Kotak Life Confident Retirement Builder | ₹30,000 | Regular Pay/Limited Pay | Get Details |
| LIC New Pension Plus | ₹30,000 | Regular Pay/One Time | Get Details |
| PNB Met Life Smart Invest Pension Plan Pro | ₹36,000 | Regular Pay/Limited Pay/One Time | Get Details |
| Pramerica Life NextGen Pension Plan | ₹36,000 | Regular Pay/Limited Pay/ | Get Details |
| SBI Life Retire Smart Plus | ₹30,000 | Regular Pay/Limited Pay/One Time | Get Details |
| Star Union Dai-ichi Pension Plus | ₹36,000 | Regular Pay/Limited Pay/One Time | Get Details |
| Tata AIA Smart Pension Secure | ₹36,000 | Regular Pay/Limited Pay/One Time | Get Details |
See More Plans
Disclaimer: ≈ Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is done in alphabetical order (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
How Does a Pension Plan Work?
Insurance-based pension plans work in two phases: a period of building your corpus (accumulation phase) and a period of withdrawing from the fund (vesting phase). The accumulation phase begins with the premium you pay to the insurance company. Payments could be monthly, half-yearly, or yearly, depending on the option you choose. And when you’re ready to retire, you enter the vesting phase. It’s the point at which your corpus becomes available as income.
Accumulation (your money grows)
During this period, the insurance company invests your premiums in market instruments suited to long-term growth. Depending on the plan you choose, returns may be guaranteed or market-linked.
Vesting (you get retirement income)
This is when you begin receiving your pension. In India, the vesting age typically ranges from 30 to 80 years. In most plans, up to 60% of your total corpus can be withdrawn as a lump sum; the remaining 40% is converted into a lifelong monthly pension.
How Accumulation and Payout Work in a Pension Plan
Let’s understand how a retirement plan works with the example of Raghu, a 40-year-old working professional. Raghu plans to buy a pension plan, hoping to build a retirement corpus sufficient for his golden years. The following illustration shows how Raghu can build the desired retirement corpus:
Invest
Put in ₹20,000/month for 10 years (Age 40)
Compound
Let it grow untouched until age 60 to reach ~₹2.13 Crore.
Withdraw
Take a ₹1.28 Crore tax-free lump sum at maturity.
Earn
Receive ₹35,000 – ₹42,000 as a monthly pension for life.
Protect
Ensure a ₹85 Lakh tax-free payout for your nominee later.
- Age at plan purchase 40 years
- Investment tenure: 10 years
- Investment amount: ₹20,000 per month
- Total investments: ₹24,00,000
- Lock-in period: until the age of 60
- Retirement corpus (at age 60): ₹2.13 crore
Corpus Utilisation at Retirement:
- 60% lump sum: (₹2.13 crore) = ₹1.28 crore (tax-free)
- 40% annuity purchase = ₹85.2 lakh to be invested in an annuity plan
With the annuity plan, Raghu may receive a pension of around ₹6.3 lakh per year (taxable as per his income tax slab).
In the event of Raghu's untimely demise, the nominee will receive the entire annuity amount (₹85.2 lakh) as a tax-free lump sum.
Note: The illustration assumes ~14.7% p.a. compounding.
How Much Retirement Corpus Do I Need?
While estimating how much you need to invest to build the desired corpus, you must consider factors like your age, current monthly expenses, and your desired retirement age. A pension calculator helps you make these calculations and build a retirement plan based on personalised data.
Pension Calculator
Pension Calculator
How much do you need to save for retirement?
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₹ 25,000
₹ 30,000
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For a monthly pension of ₹77,300
you need to invest
Recalculate? you need to invest
₹14,300/month
Calculated as per past performance of 15% Types of Pension Plans in India
Comparing the best pension plans in India from government and private providers gives you helpful insights for retirement planning. Here are the details about the various types of pension plans.
Insurance-Based Pension Plan (Annuity)
An annuity plan is the smartest and most secure way to ensure a guaranteed income to financially secure your retirement life. What kind of annuity plan you should choose depends on factors like your life stage and the type of investment (one time or periodic) you want to make.
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Immediate Annuity: In an immediate annuity plan, you need to invest a lump sum, which is converted to annuity income shortly after your investments. You could start getting a payout as short as 1 month after buying the plan. Immediate annuity plans are suitable for people close to retirement or the ones who’ve already retired.
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Deferred Annuity: Deferred annuity plans give you payout after a defined period of time in which your money grows. It’s called the deferment period. You can make the payments in periodic installments or as a lump sum. Deferred annuities are preferred by people who are still at least several years away from retirement.
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Fixed Annuity: Fixed annuity plans give you a guaranteed, fixed interest rate, which in turn ensures fixed annuity payouts irrespective of market conditions. Fixed annuity plans are suitable for risk-averse investors who would continue to work for an income for several years.
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Variable Annuity: With a variable annuity plan, you get a combination of market-linked returns plus a guaranteed lifelong income. You can invest in a variable annuity as a lump sum or as a series of premiums. Variable annuity products are preferred by investors who want to beat inflation while getting the assurance of a guaranteed pension.
Government Pension Schemes
A range of government pension schemes like NPS are popular among investors who prefer schemes regulated by a government agency. These schemes are accessible to investors from different income categories. Below are some of the most popular government pension schemes.
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National Pension System (NPS): The NPS is a market-linked, voluntary contribution scheme. NPS has a simple structure, flexible investment options, and the government's backing as a reliable retirement-planning instrument. The National Pension Scheme is also known for its unique tax benefits.
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Atal Pension Yojana (APY): The Atal Pension Yojana (APY), named to honor former Prime Minister Atal Bihari Vajpayee, aims to enhance financial security among workers in the informal sector. APY subscribers from the age of 18 to 40 years can make contributions and choose a monthly pension from ₹1,000 to ₹5,000.
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Employees’ Provident Fund (EPF): EPF is a mandatory savings scheme for most salaried employees. You earn fixed returns on your monthly contributions. A part of your savings provides a small pension. This suits workers seeking basic retirement income security.
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Public Provident Fund (PPF): PPF is one of the major government-backed long-term savings schemes for retirement. It offers fixed returns for long-term goals. It has a mandatory fifteen-year lock-in period. PPF is an ideal choice for secure and tax-free savings. It offers EEE tax benefits, meaning returns are completely tax-exempt.
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Senior Citizen Savings Scheme (SCSS): Senior Citizen Savings Scheme (SCSS) offers a guaranteed regular income for senior citizens. With an interest rate as high as 8.2% p.a. You can invest between ₹1,000 and ₹30 lakh. Contributions to the scheme qualify for tax benefits under Section 123 (old Section 80C).
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Monthly Investment ₹10K YOU GET ₹1.5 LAKHS* MONTHLY PENSION
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Monthly Investment ₹7K YOU GET ₹1 LAKHS* MONTHLY PENSION
Monthly Investment ₹5K YOU GET ₹75 THOUSAND* MONTHLY PENSION
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Eligibility Criteria for Buying a Pension Plan
If you are 18 or older, most insurance companies have a pension plan for you. Along with the entry age, you should also know the premium payment terms and the vesting age before buying a pension plan in India.
Entry Age
In most cases, the minimum entry age for a retirement plan is 18 years, but some plans require an entry age of 30. The maximum entry age is up to 80 years.
Premium
The premium amount depends on the retirement fund you want to build. You could start from a premium of as low as ₹3000/month or invest more, like ₹10k/month, to build a corpus of 1 crore.
Vesting Age
The age at which you begin receiving your pension. The ideal vesting age is set at 60 to 65 years but can vary depending on the retirement plan and insurance provider.
Premium payment term:
You could make a single payment as a lump sum (common in immediate annuity) or choose to make periodic payments as per a schedule of your convenience, like monthly, half-yearly, yearly premiums, etc.
Policy term
t’s the total length of your insurance-based pension plan. The minimum policy term is usually 10 years (common in deferred annuity). Longer policy terms reflect more disciplined investments and better preparedness for retirement.
Who Should Buy a Retirement Plan in India?
A pension plan is relevant at almost every stage of earning life and not just for those close to retirement. Here's a quick look at who benefits most.
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01Young ProfessionalsBeginning a pension plan in your mid-twenties means your corpus has 35 to 40 years to grow through the power of compounding. A low monthly premium today can translate into a desired retirement income tomorrow.
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02Self-Employed IndividualsA pension plan gives self-employed professionals and freelancers a structured, disciplined way to build retirement savings, with flexible premium options that work around variable income.
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03Employees Without Pension BenefitsMany private-sector employees don't have a workplace pension scheme. If that's you, a personal pension plan ensures you're building your own retirement corpus.
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04Those with Irregular IncomeBusiness owners and professionals with fluctuating cash flows can still plan effectively for retirement. Many pension plans allow flexible premium payments, so you can contribute more in high-income periods and less when cash flow is tight.
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05Those Aiming for Early Retirement (FIRE)If your goal is to retire well before the conventional age (FIRE), a pension plan can be central to that strategy. Putting a large portion of your income into a pension plan through your 30s can help you build a corpus to fund decades of financial independence.
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06Investors Seeking Inflation-Protected IncomeA pension that stays fixed while living costs rise loses value every year. Plans with increasing annuity options (where your payout grows by a fixed percentage annually) help ensure your retirement income beats inflation.
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07Those Looking to Save on TaxesPension plan investments qualify for tax deductions under Section 123 (formerly Section 80C), and maturity benefits may be exempt under Section 11 (formerly Section 10(10D)) of the Income Tax Act, 2025.
When Is the Right Time to Start Planning for Retirement?
The right time to start retirement planning is now! The earlier you start, the better the chances of building a desired corpus. Having said that, you should also understand that at what life stage you plan for your retirement greatly impacts the outcomes. Below is an overview of how retirement planning works for different age groups.
Importance of Retirement Planning for Different Ages
The importance of planning changes with different stages of life. Knowing these stages can help you make smart financial decisions for a comfortable retirement.
Let us have a look at the significance of retirement planning based on age and life stages:
Tax Benefits on a Pension Plan in India
The best retirement plans in India are designed keeping in mind the attractive tax benefits for ULIP-based plans. Investing in these plans helps you save for your future while reducing your current tax liability. You can use an online pension calculator to see how much tax benefits you could get from your pension premiums.
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Section 123 (old Sections 80C & 80CCC)
Premiums paid toward retirement savings, including contributions to specific annuity pension funds, qualify for a tax deduction of up to Rs. 1.5 lakh in a financial year.
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Section 124(3) (old Section 80CCD(1B))
An additional deduction of up to Rs. 50,000 is available for contributions to NPS, over and above the Rs. 1.5 lakh limit under Section 123.
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Tax-Free Maturity
Up to 60% of the corpus received at maturity can be withdrawn tax-free. The remaining amount is used to purchase an annuity.
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Taxable Annuity Income
The regular pension income you receive after retirement is taxable. It is added to your income and taxed per your applicable slab rate.
Factors to Consider Before Buying a Pension Plan
To ensure that you have one of the best pension plans in India, consider the following factors before making an investment decision.
Retirement Age and GoalsDetermine your desired retirement age and lifestyle you want post-retirement.
Financial NeedsAssess future expenses like healthcare, inflation, and daily living costs to estimate your required retirement corpus.
Plan TypeChoose between traditional pension plans, market-linked plans (ULIPs), or annuity-based plans based on your risk appetite.
Premium AffordabilityEnsure the premium amount fits within your current budget.
Tax BenefitsEvaluate tax deductions on premiums and exemptions on maturity by using a pension plan calculator.
Annuity OptionsCheck for flexibility in annuity payouts, including lump-sum, monthly, or increasing annuity options.
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Life Cover
Look for plans that provide life insurance coverage along with retirement benefits.
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Add-Ons
Opt for plans that offer withdrawal options, top-ups, or riders for critical illness or disability.
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Plan Performance
Analyze historical returns for market-linked plans and the financial strength of the insurer.
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Loan Facility
Check if the plan allows borrowing against the policy in case of emergencies.
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Inflation Adjustments
Ensure the plan offers features to keep up with rising costs, such as increasing annuities.
Read more
Steps to Buy a Retirement Plan from Policybazaar
Check and compare retirement plans on Policybazaar.
Understand the features and premiums of different plans to find the best fit for you.
Choose the most suitable plan that aligns with your goals and needs, like your retirement lifestyle and hobbies you want to pursue.
Make your payment online and receive confirmation about your retirement plan.
Consider adding riders to customise your pension plan features, adjust coverage, or to modify the plan according to your requirements.
Documents Required for Buying a Pension Plan
Below is a list of documents needed to buy a insurance-based pension plan in India.
Proof of Identity:
- PAN Card is mandatory for all transactions.
- You can also use your Passport or Voter's ID.
Read more
Proof of Address:
- You must submit documents showing your current address.
- A valid Aadhaar Card copy is commonly accepted.
- Your Passport or Driver’s License works too.
- You can also use recent utility bills, like electricity or gas.
Read more
Proof of Age
- This confirms your date of birth.
- The insurance company requires accurate age proof.
- You can use your Passport or Birth Certificate.
- A School Leaving Certificate is also acceptable.
Read more
Bank Details
- A cancelled cheque leaf is needed for bank proof.
- This links your bank account for premium payment.
- It also ensures your future annuity payout is correct.
- Provide a recent bank statement or passbook copy.
Read more
Other Documents
- The fully completed and signed proposal form.
- One or two recent passport-size photographs.
- Specific medical reports, if requested by the insurer.
Read more
,
Why Buy a Pension Plan from Policybazaar?
Policybazaar provides you with a seamless online platform to compare the best pension plans in India in one place and make informed decisions.
Comparison Tool
Policybazaar is a one-stop shop for comparing the best pension plans available in the market. You can then make a truly informed purchase decision.
Hassle-Free Purchase
Here, you can do a detailed comparison of features, benefits, and premiums of different plans and buy the one you like without any hassle.
Customisable Plans
Whether you want to choose a specific add-on or need to select a convenient premium payment frequency, everything is just a few clicks away.
No Hidden Charges
We don't give you any unwanted surprises with hidden charges. All kinds of charges and fees are transparently presented before your purchase.
Expert Assistance
A team of seasoned experts is always at your disposal to guide you through the buying process should you need any assistance while choosing the best retirement plan.
24/7 Customer Support
We know that we're in a critical domain of insurance and investments. Our round-the-clock assistance for purchase, claim, and other queries means you don't have to worry about anything.
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˜The insurers/plans mentioned are arranged in order of highest to lowest first year premium (sum of individual single premium and individual non-single premium) offered by Policybazaar’s insurer partners offering life insurance investment plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in
##The Guaranteed Returns are dependent on the policy term and premium term availed along with other variable factors. 7.3% rate of return is for an 18-year-old, healthy male for a policy term of 20 years and a premium term of 10 years with ₹5,00,000 annually installment premium. All plans listed here are from insurance companies’ funds.
*All savings are provided by the insurer as per the IRDAI approved
insurance plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).
