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Annuity

Annuity plans are essentially an agreement between two parties, the insurance company and the buyer, with a promise to pay a series of payments at regular intervals of time against a purchase amount.Read More

It is a popular choice among people who wish to enjoy their retirement lives without any financial stress or burden. Post-retirement is an important phase in life where most people don’t have an active source of income and hence, they look for best retirement plans to manage their finances early on to meet the daily needs and simultaneously maintain their lifestyle too. Read Less

TYPES OF ANNUITY PLANS

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    There are multiple types of retirement income plans available, such as –  

    • Premium Payment Frequency: Single & Regular
    • Payout Types: Fixed and Variable
    • Payout initiation: Immediate and Deferred
    • Duration of payout: Lifetime and Fixed period
    • Number of Annuitants: Single & Joint

FREQUENTLY ASKED QUESTIONS

What are Annuity Plans?

Annuity plans, also known as retirement plans, enable one to receive payments regularly after paying a lump sum amount. That payment made is further used by the company to generate income and pay the customer with the generated returns.

What are the reasons to buy a retirement annuity plan?

Safe Investment Option: Annuity plans let you plan for the future and is one of the safest investment tools because your payout is guaranteed. It isn’t like mutual funds or other investment options which are market-linked i.e. it doesn’t have the volatility in returns like other products.

Financial Security: Acts as a retirement plan that guarantees offering a payout during post-retirement phase of your life and lets you lead a comfortable and relaxed life in that period.

Flexibility in Payout: You have the flexibility to choose from an array of annuity options depending on what suits your requirements the most.

What is the difference between deferred and immediate annuity plans?

Under this, the money is invested for some period before payments are made. It's recommended for individuals who are working and still have some more years before retirement. It may also come with a “life cover”, which implies that, in case of the demise of the insured, the nominee is paid a lump sum amount.

Immediate Annuity: In an immediate annuity, you start receiving payments as soon as the initial investment is made. If you are approaching retirement age, then this is the type of annuity to opt for. So, deferred annuity accumulates money while immediate annuity pays money.

How much do I need to invest in annuity plans?

There is no limit on the amount that you need to invest in retirement plans. Whether you choose a deferred or an immediate annuity, there are few things you need to consider:

·         Your actual financial needs

·         Your long-term financial goals

·         Your current savings/investment portfolio

·         The impact of inflation.

For instance - If you are retiring at the age of 60, even before you zero down on your annuity pension plan, you will have to consider the amount required for your monthly expenses, the yearly inflation rate at which this expense will grow, emergency costs like payments toward health issues etc., to calculate the retirement savings you will require.