An Immediate Annuity Plan offers a guaranteed income stream immediately after a lump sum investment, ensuring financial security. It provides flexible payout options like lifetime or joint annuities with no market risks. Retirees can choose monthly, quarterly, or yearly payouts, and some plans even return the purchase price, making it a reliable choice for lifelong financial stability.
Guaranteed Income for Life
Tax Deferred Annuity Growth
Multiple Annuity Options
An annuity plan is a financial scheme that provides regular income in exchange for a lump sum or periodic payments to an insurance provider.
An Immediate Annuity Plan is a type of annuity where the policyholder makes a one-time payment to the insurer and starts receiving guaranteed income almost immediately. The payments can begin as early as one month from policy issuance, based on the chosen frequency—monthly, quarterly, half-yearly, or yearly. It is ideal for individuals and retirees seeking a steady income stream. The annuity payout amount depends on factors like the invested lump sum, age, and annuity type, ensuring long-term financial stability.
The key features of this best investment plan for retirement planning are listed below:
An immediate annuity plan provides annuity payments as early as the next month after investment.
This annuity plan ensures a fixed income for life or a chosen period, offering financial stability.
Your income remains unaffected by market fluctuations, interest rate changes, or economic conditions, making it a secure investment plan.
Once you invest, the insurer manages the funds and ensures regular payouts, making it a hassle-free investment option.
You can customise your annuity plan with monthly, quarterly, half-yearly, or annual payouts as per your needs.
With Return of Premium (ROP): In case of the annuitant’s death, the nominee receives the entire premium amount.
Without ROP: The annuitant gets a higher pension, but no amount is paid to the nominee after death.
This immediate annuity plan ensures that after the annuitant’s passing, the spouse continues to receive the pension.
The annuity amount increases over time to help manage inflation, making it a smart investment option for long-term financial security.
A one-time premium payment secures your future income, and the insurer takes care of the rest, making it a convenient investment plan.
An immediate annuity plan works as follows:
You receive regular payouts as long as you live. The payments stop after your demise.
Both you and your spouse are covered. You receive annuity benefits for life, and after your demise, your spouse continues to receive them until their passing.
Regular payouts continue for life. After your demise, the initial investment amount is returned to your nominee.
The annuity covers both spouses. After both pass away, the nominee receives the purchase price.
Payouts continue for a fixed period, even if the annuitant passes away. After the term ends, payments stop.
The payout increases annually to help counter inflation, ensuring a stable yet gradually rising income.
Mrs. Gupta, a 62-year-old retired teacher, invests her savings in an immediate annuity plan with Life Annuity with Return of Purchase Price (ROP). She receives regular payouts for life, and if she passes away, her initial investment is refunded to her nominee. To protect against inflation, she also chooses an inflation-indexed annuity, ensuring her payouts increase over time. This plan provides Mrs. Gupta with a steady, growing income, ensuring financial security throughout her retirement.
Let us suppose you buy an immediate pension plan from Policybazaar as per the following conditions:
Your Present Age= 60 years
You Pay For= One Time
Starting Pension= Now (next month)
Plan Type= Annuity Plan
Specifications= Pension + Return of Purchase Price (ROP)
The following table highlights the key differences between an immediate pension plan and a deferred annuity plan:
Feature | Immediate Annuity | Deferred Annuity |
Purpose | Provides immediate income for retirement | Offers flexibility to start payouts later |
Payment Start | Starts immediately after purchase | Starts after a waiting period |
Income Security | Provides steady, immediate income | Provides income starting at a future date |
Tax Benefit | No tax benefit on growth | Grows tax-deferred until payouts start |
Payout Frequency | Regular payouts for a set period or lifetime | Payouts start later as per your choice |
Flexibility | No flexibility in payment timing | Flexibility in choosing when to start payouts |
Conversion Option | Not applicable | Can convert to immediate annuity later |
Lump Sum Payment | Typically required upfront | Can be made upfront or gradually |
Accumulation Period | None | Funds accumulate over a specified period |
Retirement Age | Suitable for immediate retirees | Suitable for those planning retirement |
Immediate annuity plans can be a good option for people looking for a secure income stream in retirement. Some of the key benefits of a pension plan are as follows:
You receive a guaranteed income immediately after purchasing the annuity plan, providing financial stability.
The annuity can be structured to provide payments for your entire life, ensuring you will not outlive your savings.
Unlike investments in stocks or bonds, immediate annuities are not affected by market fluctuations, providing a stable source of income.
You know exactly how much you will receive in payments, making it easier to plan your budget and financial future.
The annuity rate is fixed for your entire life and does not change with dropping interest rates of other guaranteed instruments
Immediate income plans are straightforward and easy to understand, making them a convenient option for retirement planning.
You can choose from various payout options and features tailored to your individual needs and preferences.
Choosing the right time for investment varies from person to person. You can choose to buy an immediate annuity plan in the following circumstances:
Consider buying when you are nearing retirement to secure a steady income stream.
If you need reliable, fixed monthly payments for the rest of your life, this plan is ideal.
Opt for this plan if you prefer guaranteed returns with minimal market risk.
Buying an immediate annuity after receiving a lump sum, such as a pension or settlement, helps create a reliable income source.
If you are in good health and expect a long life, this plan can offer peace of mind.
Dedicated retirement planning is crucial to cover your financial needs after your active working life ends. You and your spouse can lead a peaceful, independent life backed by the steady income stream you have ensured through your immediate annuity plan.
You must essentially survey the market for the various immediate annuity plans on offer to make an informed choice that best suits your needs. It is also sensible to look for additional features and benefits like inflation protection. You must also consider the following essential points before you commit to a particular plan:
An Immediate Annuity Plan offers reliable income right after your investment, ensuring financial security during retirement. With lifetime payouts and flexible options like joint annuities, it’s ideal for a worry-free future. Insurers provide competitive returns and customised payout choices. Compare different plans to maximise benefits and guarantee long-term financial stability for your retirement.
˜Top 5 plans based on annualized premium, for bookings made in the first 6 months of FY 24-25. 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. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved
insurance plan. Standard T&C Apply
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