Protection for Life
because Life matters.
Features
Guaranteed Pension/Income
Tax-Efficiency
Liquidity
Vesting Age
Accumulation Duration
Payment Period
Surrender value
Benefits
- Guaranteed Pension/Income
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You can get a fixed and steady income after retiring (deferred plan) or immediately after investing (immediate plan), based on how you invest. This ensures a financially independent life after retiring. You can use a retirement calculator to have a rough estimate of how much you might require after retiring.
- Tax-Efficiency
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Some pension plans provide tax exemption specified under Section 80C. If you wish to invest in a pension plan, then the Income Tax Act, 1961, offers significant tax respite under Chapter VI-A. Section 80C, 80CCC and 80CCD specify them in detail. For instance, Atal Pension Yojana (APY) and National Pension Scheme (NPS) are subject to tax deductions under Section 80CCD.
- Liquidity
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Retirement plans are essentially a product of low liquidity. However, some plans allow withdrawal even during the accumulation stage. This will ensure funds to fall back on during emergencies without having to rely on bank loans or others for financial requirements.
- Vesting Age
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This is the age when you begin to receive the monthly pension. For instance, most pension plans keep their minimum vesting age at 45 years or 50 years. It is flexible up to the age of 70 years, though some companies allow the vesting age to be up to 90 years.
- Accumulation Duration
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An investor can either choose to pay the premium in periodic intervals or at once as a lump sum investment. The wealth will simultaneously accumulate over time to build up a sizable corpus (investment+gains). For instance, if you start investing at the age of 30 and continues investing until you turn 60, the accumulation period will be 30 years. Your pension for the chosen period primarily comes from this corpus.
- Payment Period
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Investors often confuse this with the accumulation period. This is the period in which you receive the pension post-retirement. For example, if one receives a pension from the age of 60 years to 75 years, then the payment period will be 15 years. Most plans keep this separate from accumulation period, though some plans allow partial/full withdrawals during accumulation periods too.
- Surrender value
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Surrendering one’s pension plan before maturity is not a smart move even after paying the required minimum premium. This results in the investor losing every benefit of the plan, including the assured sum and life insurance cover.
Riders
- Waiver of Premium Rider
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The exemption of the premium rider protects you from disabilities. You will waive your payment if you are diagnosed as being totally disabled and not include the remainder of the coverage. This means that for the remaining life insurance or any other permanent coverage you will waive the premium. Moreover, in some plans with specific life insurance companies, the WOP rider will also waive premiums due to additional life insurance riders, assured drivers of insurance and renewable term drivers.
- Guaranteed Insurability Rider
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The guaranteed insurance rider should be very reasonable for every life insurance policy. When he marries a child or when the child is born, a policyholder can increase the benefit at certain birthdays without proof of insurability (that is to say, the life insurance blood testing does not need to be carried out). In particular, while considering the child or young adult life insurance, it is important to be aware of the fact that the insured can improve their total life insurance coverage and also the death benefits at a certain time if they develop a disease or become insurable during a policy period.
- Disability Income Rider
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If you're disabled, the income rider is designed to reimburse you monthly. You can add a short and long-running rider. You are normally paid for a short time. Long-term plans are meant for a longer period and usually have six months waiting before starting benefits. This rider often stops paying after two years, although other possibilities exist. It is a wonderful option for a buying-sell or a key person in your organisation if you run a firm. Once again, long-term, stand-alone disability insurance coverage can also be taken into account
- Critical illness rider
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Illnesses often come unexpectedly and affect your life and financial condition. Under critical illness rider, the insured receives a lump-sum on the diagnosis of critical illness pre-specified in the policy. Critical illness may either continue or terminate
- Term rider
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This is a very important rider that can be opted with a pension plan. In the event of death of the life insured, his or her nominee will receive a lump-sum sum money or a monthly payout for a specified duration
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