Pension plans are designed to help employees accumulate funds throughout their working years to support their retirement income needs. Pension is an essential part of financial planning for any individual as it helps ensure that they have sufficient funds to support their expenses once they stop working. The funds accumulated in a pension plan grow over time, as the investment grows, so does the individual's retirement savings, providing them with a significant sum of money upon retirement.Read more
Peaceful Post-Retirement Life
Tax Free Regular Income
Wealth Generation to beat Inflation
*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
A pension plan is a type of investment plan that helps you accumulate a part of your savings over a long-term period to have a secured financial future. It helps you to deal with post-retirement and ensures a steady flow of income after retirement. Even if a person has a good amount of savings, a pension plan is nevertheless crucial.
Here are some of the best pension plans in India available in the market.
|Pension Plans in India||Entry Age||Maturity Age||Policy Term||Tax Benefit||Annuity Payable|
|Aditya Birla Sun life Empower Pension Plan||25-70 years of age||80 years of age||5-30 years||Offers tax benefit U/S 80C of IT Act||
|Bajaj Allianz Life LongLife Goal||0- 65 years of age||99 years of age||99 years- Entry age||Offers tax benefit U/S 80C of IT Act||
|Bajaj Allianz Pension Guaranteed Pension Plan||0-100 years of age||N/A||Life time||Offers tax benefit U/S 80C &10(10D) of IT Act||
|HDFC Life Click 2 Retire||18-65 years of age||45-75 years of age||10,15-35 years||Offers tax benefit U/S 80C of IT Act||
|ICICI Pru Easy Retirement Plan||18-70 years of age||30-80 years of age||10, 15, 20, 25, 30 years||Offers tax benefit U/S 80C &10(10D) of IT Act||
|IndiaFirst Life Guaranteed Annuity Plan||40-80 years of age||N/A||Life time||Offers tax benefit U/S 80C IT Act||
|Kotak Premier Pension Plan||30- 60 years of age||45-70 years of age||10-30 years||Offers tax benefit U/S 80C of IT Act.||
|LIC Jeevan Akshay 7 Pension Plan||25-100 years of age||N/A||Life time||Offers tax Benefit U/S 80C of IT Act||
|LIC New Jeevan Shanti Pension Plan||30-79 years of age||31-80 years of age||--||Offers tax Benefit U/S 80C of IT Act||
|Max Life Forever Young Pension Plan||30 years-65 years||50-75 years of age||10 years to 75 years-Entry age||Offers tax benefit U/S 80C of IT Act||
|Max Life Guaranteed Lifetime Income Pension Plan||0-85 years of age||26-90 years of age||N/A||Offers tax benefit U/S 80C IT Act||
|Reliance Immediate Annuity Pension Plan||20 years- 80 years||--||5, 10, 15 years, or Life time||Offers tax benefit U/S 80C of IT Act||
|Reliance Smart Pension Plan||18-65 years of age||45-75 years of age||10, 15, 30 years||Offers tax benefit U/S 80C of IT Act||
|SBI Life Saral Retirement Saver||18-65 years of age||40-70 years of age||5, 10- 40 years||Offers tax benefit U/S 80C of IT Act||
|Tata AIA Life Guaranteed Monthly Income Plan||6-60 years of age||68 years of age||5, 8, 12 years||Offers tax benefit U/S 80C & 10(10D) of IT Act||
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
Aditya Birla Sun Life Pension Plans
Aegon Life Pension Plans
Ageas Federal Pension Plans
Aviva Pension Plans
Bajaj Allianz Pension Plans
Canara HSBC Pension Plans
Edelweiss Tokio Life Pension Plans
Future Generali Pension Plans
HDFC Life Pension Plans
ICICI Prudential Pension Plans
IndiaFirst Pension Plans
Kotak Life Pension Plans
Max Life Pension Plans
PNB MetLife Pension Plans
Pramerica Life Pension Plans
Reliance Life Pension Plans
Sahara Life Pension Plans
SBI Life Pension Plans
Shriram Life Pension Plans
Star Union Pension Plans
Tata AIA Pension Plans
A wide range of pension plans in India are available to cater to the insurance seekers' requirements. These plans have multiple classifications based on the plan structure and benefits. These plans can be further divided into eight categories:
Let's explore these pension funds in detail:
A Deferred Pension Scheme allows you to accumulate a corpus through regular premium or single premium payments over a policy term. After the completion of the policy tenure, the pension is provided to the insured. The deferred pension scheme offers various benefits, including tax exemption.
In a deferred plan, only 1/3rd of the corpus is tax-free on withdrawal, whereas 2/3rd of the corpus is taxable. The amount invested in a deferred pension plan is locked and cannot be withdrawn for any emergency.
A deferred pension scheme can be bought by paying one-time payments as well as paying regular premiums. Therefore, these pension schemes are suitable for all types of investors, be it those who want to invest systematically or those who have a chunk of money to invest in one go.
Under an immediate annuity scheme, the pension is provided immediately. The policyholder has to pay a lump-sum amount, and a pension will be provided instantly, based on the lump-sum amount paid by the policyholder.
Under the immediate annuity pension scheme, the insured can choose from a range of annuity options. Moreover, the premiums paid are tax-exempted as per Income Tax Act, 1961. In an immediate annuity retirement plan, the policy nominee is entitled to receive the money in case of the insured person's demise during the policy's tenure.
Under this pension plan option, the annuity is paid to the annuitant for a specific number of years. The annuitant can choose the period, and if they pass away before receiving all complete payments, the annuity will be paid to the policy's beneficiary.
With cover pension plans have a life cover component the plan. Upon the policyholder's death, the policy's beneficiary pays a lump sum amount. However, the cover amount is not very high since a large part of the premium is paid towards growing the corpus rather than covering life risk.
Under the cover pension plan, no life cover is offered to the insured person. In the event of the unfortunate death of the insured person, the nominee will get the corpus (till the date of the death). Currently, deferred pension schemes come with the option of life cover, whereas immediate annuity plans do not offer the option of life cover.
Under a guaranteed period annuity plan, the annuity is provided to the policyholder for certain periods like 5 years, 10 years, 15 years, or 20 years, whether or not the insured survives that duration.
Under the life annuity plan, the pension amount will be paid to the annuitant until death. After choosing the option of 'with the spouse,' the pension amount will be given to the policyholder's spouse in case of the policyholder's death.
The Government of India introduced New Pension Scheme to secure the financial future of the individual after retirement. As per an individual's preference, the money invested in the National Pension Scheme is put in equity and debt funds to generate returns on investment. The policyholder can withdraw 60% of the amount at retirement, and the rest 40% of the amount is used to purchase the annuity. The maturity proceeds are not tax-free.
The pension fund is a type of pension scheme that remains in force for a long period. This pension plan offers a comparatively better return upon maturity and is regulated by the Government under the Pension Fund Regulatory and Development Authority (PFRDA).
Besides, pension funds provide better returns during the maturity period when one compares to the other and remains active for a specified period. Insurance providers offer pension funds intended to empower policyholders to pull back their annuity sum at the hour of the aggregation stage. This component guarantees that the sum is constantly arranged for an unexpected crisis if it emerges. Above all, it keeps you from relying on banks for a loan under such circumstances.
Under this whole life ulips option of the pension plan, the money stays invested for the whole life of the insured, and upon retirement, they can make partial withdrawals and get tax-free income. Additional withdrawals are allowed whenever needed or whenever necessary.
Defined benefit plans ensure that you pay a specific amount from the retirement income for life. It is decided on the premise of the pension amount, which is formulated keeping into account your earnings as well as the number of years you have served with the employer. This implies that you and your employer can contribute easily to most plans.
In a defined contribution plan, the retirement income is not guaranteed; however, the contributions are. Within this plan, both you and your employer can easily contribute to the plan. Some of the contributions that you make may be matched by your employer.
You are answerable for contributing all commitments to develop your investment funds. The sum accessible for your retirement relies upon the all-out contributions made to your record and the investment returns this cash earned.
HDFC Life Insurance offers specialized pension plans in India for you and your loved ones. With customized coverages and benefits, it is best suited for individuals who need complete protection at affordable costs.
Savings Incentive Match Plan for Employees (SIMPLE) Individual Retirement Account (IRA), or SIMPLE IRA, is a retirement savings plan especially designed for small businesses with 100 or less employees. It is an easy and suitable option for employees of small businesses.
Simplified Employee Pension (SEP) Individual Retirement Account (IRA), or SEP-IRA, is a pension plan that can be opted for either by self-employed or employers to meet their retirement needs. Tax deductions are applicable under the SEP-IRA, and contributions are made to employees as per their eligibility.
A special Individual Retirement Account (IRA), Roth IRA, is a pension plan in which an individual pays tax on the money deposited in their bank account every time, but all withdrawals will be tax-free in the future.
Buying a pension plan online comes with a lot of benefits. Take a look at them below:
Retirement Planning is the process of planning long-term and short-term retirement goals and the ways to accomplish these goals. It involves identifying different income sources, analyzing the financial objectives, estimating future expenses, opting for a savings program, and managing risk and assets.
Let's take a look at the key takeaway of retirement planning.
It can be described as the financial planning of investment, savings, and final distribution of money to sustain oneself at the time of retirement.
Various popular investment options allow individuals to accumulate funds with the advantage of tax benefits.
While planning for retirement, it is important to consider factors like future liabilities, expenses, life expectancy, and assets and income.
The earlier one starts planning for retirement, the better fund one can accumulate over a long period to have a secured life after retirement.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
If you are trying to find the best retirement plan in India, it is very important to understand the advantages of retirement planning offered by various pension schemes in India. Each retirement scheme in India comes with its specific benefits.
Further, here we have mentioned some of the advantages offered by the pension scheme in India.
Irrespective of the premium payment mode selected by you, which can be multiple small payouts or a lump sum payment, one thing you assure with a retirement plan is savings for the long term. Pension scheme India mainly focuses on creating an annuity that can further invest in generating a steady flow of cash for your post-retirement years.
The pension scheme in India offers a guaranteed income that helps the policyholder to meet their day-to-day expenses. Your current income and future inflation should lay the foundation of your retirement planning as it will help you to compute the money you'll need post-retirement. Some insurance plans offer income that ensures the policyholder does not have to worry about the future. Since these life-income plans offer better returns, it is a smart way to walk down the lane of retirement planning.
The retirement planning solutions people invest in provide them with an insurance cover to protect their family if the worst comes to pass financially. Most life insurance companies offer an insurance cover benefit under various retirement plans, so the spouse does not have to face any financial difficulty if the unfortunate happens.
The pension schemes in India protect the policyholder against any kind of investment risk. If your employer offers your pension plan, then also you need not worry. This is because, even with the stock market downfall, the company has to make up to recover the lost money.
However, there will not be any negative effect on your retirement benefit. Moreover, even if your company goes bankrupt, nothing happens to your pension even then. This is because the government entity- the Pension Benefit Guaranty Corporation, takes care of your pension payouts.
Your investment in retirement planning solutions will help you save significantly on your tax. If you plan it well, enjoy the offered tax benefits. Checking the policy details will also allow you to understand if you can avail of tax benefits under Section 80C of the Income Tax Act.
Some plans offer lump-sum payments that you can use to meet major expenses (if any). In the years leading up to retirement, an individual may need funds for various reasons, such as buying a flat or paying for a children's wedding. Some pension plans offer to withdraw a large chunk of your corpus to meet financial emergencies. Checking the policy details for the various plans will help you in Retirement Planning, as you will be able to pick the ones that suit your future financial expectations.
While buying a retirement plan in India, you will get numerous options. These options will be according to the retirement age and the inclusions you may want. You can pay a lump sum of approximately Rs.5 Lakh in one go and immediately start getting annuity payments. Or you may go for a deferred annuity policy to get more interest before the start of the payout.
By opting for an add-on rider, you can enhance the coverage of your retirement plans in India. Some retirement plan riders worth considering are disability due to an accident rider, critical illness rider, etc.
With pension schemes in India, you can go for the option of a Unit-Linked Insurance Plan. Under a ULIP, your money will be invested in equity and debt funds or safer government securities as per your preference. You can get a huge corpus based on the market returns at your retirement. It can help you to maintain your lifestyle without making any compromises.
Note- For detailed information on the pension plan, read the plan brochure. You can log on to PolicyBazaar.com to compare the best retirement plan in India for you.
The early on you start planning for your retirement, the more wealth you can create over a long period to create a secure future after retirement. Let's take a look at the reason why you should start retirement planning today.
With the help of the retirement plan in India, you will be able to take care of the family's financial needs after retirement, as it will provide you with a source of income post-retirement.
The money saved for retirement can help you deal with any type of emergency, whether wealth-wise or health-wise, in the future.
One of the most important advantages of retirement planning is that you can live a stress-free retirement life after retirement as you will not have to depend on anyone.
With proper retirement planning and investing in the right pension plan, you can maintain a good lifestyle after retirement and even fulfill your unfulfilled desires that you couldn't early on in your life.
With the help of pension funds in India, you can assure a guaranteed income after retirement as an annuity to take care of your monthly expenses.
A pension scheme is as important as a health insurance plan. Here are the reasons why:
Some people want to work until the last day of their life. Due to aging, poor health will stop most people from working. In such cases, having a regular source of income works as a virtue. Retirement plans can provide a regular source of income even when you will not be able to work.
The older you get, become more prone to develop/ contract health issues. Aging doesn't only affect your health, it affects your pocket as well. After retirement, one of the most recurring expenses is medical expenses. If you don't have a senior citizen plan, you have all the more reasons to opt for a retirement plan.
A medical emergency may leave a big hole in your pocket, especially post-retirement. Having a pension scheme can help you keep such financial crises at bay.
You might have made many compromises from childhood to old age, such as not pursuing your dreams, travel plans, etc. However, you can easily check off your bucket list items if you have planned your retirement gracefully by opting for one of India's best retirement plans.
By being financially independent, you will not become a burden to your children during your post-retirement life. This will give you mental peace and give your family (children) a sense of satisfaction that their parents are financially sound.
Another benefit of retiring gracefully with retirement plans is being able to help out your family in their bad time or when they need (if need be).
Various retirement plans in India ensure a safe and tension-free retirement. They are among the most popular choices for retirement planning. Since there are many different types of pension plans in India, it is important to analyze your financial needs before choosing a retirement plan.
Let's take a look at the top 5 tips for Retirement Planning:
Save for retirement Now- Many of us rely on personal savings as a retirement planning option. While the salaried individuals will have pension income after retirement and the self-employed will have savings, opting for a pension plan early on in life always works as a lifesaver.
Be Prepared for Future Financial Emergencies- Since most people have only one source of income, having a retirement corpus to fall back on during the golden phase of your life will be pretty comforting. The corpus should be adequate to take care of your future financial emergencies.
Explore various insurance options- In case you have any dependents, then life insurance serves as the primary income replacement option for those who depend on you. In case you don't have any dependents, then you can invest your income in different investment instruments where it can multiply, and you can receive a good return on your investment during a particular period.
Diversify your Investments- Retirement Planning doesn't have to be boring. Since investing only in retirement plans may not be enough to support your financial situation after retirement, you consider putting your money in different investment instruments for long-term capital appreciation and return. Moreover, various investment plans also provide a tax advantage to individuals
Think about Your Retirement Wants- Before you reach your old age and retire, start saving money according to your retirement needs. For example, as you age, the medical expenses automatically increase, so secure yourself and your family with proper health insurance so that you are covered entirely in case of any critical illness. Do give a thought to many other factors like which city you want to settle in after retirement, a major investment that can take place after retirement, etc.
The three main eligibility criteria for purchasing retirement plans in India are:
Entry Age: You can purchase a Pension Plan only after you attain a certain age. There are different age brackets for different insurance plans, but generally, the minimum entry age for a Pension Plan is 18 years. However, some companies have set the entry age for these plans as 30 years. In the same way, there is a maximum entry age for the pension fund. In most cases, it is around 70 years.
Premium: There is a minimum premium payment that the policyholder has to pay for taking a Pension Plan. This is because the pension is received according to the premium paid by the policyholder.
Vesting Age: This is the age at which the policyholder starts getting a pension. Generally, it is set at 40 years. It can go up to the limit provided by the insurance provider.
|Term Plan||Pension Plan|
|Objective||To get a financial backup for your family in case of your demise||To get a financial backup for yourself and your family while still living. Though, like a term plan, it also provides a sum assured to your family in case of your demise|
|Maturity Benefit||The entire maturity amount is paid out at once and is tax exempted||1/3rd maturity amount is paid out as a lump sum and is tax exempted. The rest 2/3rd is paid out as annuity and is taxable|
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