Looking for Regular Pension After Retirement? Buy Annuity Plans Online
Vivek Jain, Investment, Business Unit Head, Policybazaar.com
Life after retirement from work is an amazing journey of self-discovery and it is important that you plan for your second innings in the best possible way. Retirement planning is a multistep process that evolves over time. And to enjoy a fun, comfortable and secured retirement, it is foremost to build the financial cushion that will fund your life after retirement. With people usually living longer these days, it is important to plan well if you want to continue with the lifestyle that you enjoy before retirement. The first basic requirement after retirement is to make sure that you have a steady flow of pension so that you are easily able to meet your daily expenses. The safest way of ensuring a steady pension flow post-retirement from work is investing in annuity plans. By buying annuity plans, you are guaranteed a financially secured future for you, your spouse and even your children. Annuity plans are the most trusted way to cover the risk of outliving your retirement corpus. These plans are specifically designed to meet long-term retirement needs of people with a decent corpus for investment.
Annuity Plans – The Best Pick for Retirement Planning
As the name suggests, an annuity policy helps you to get a regular monthly pension for life once you make a one-time lump sum investment. Under annuity plans, there are two basic categories of plans available for the customers namely – Deferred Annuity and Immediate Annuity. Under deferred annuity plans, you make a lump sum investment with the insurer and wait for it to grow over a period of 5 – 10 years, after which you start receiving regular pension. In contrast to deferred annuity plans, under immediate annuity plans, payments start immediately after you make a lump sum investment with the insurer. while immediate annuity products are best recommended for customers over 60 years of age, deferred annuity products are best suitable for customers in their early 50s. The size of your monthly payments is determined by a variety of factors, including the corpus invested and tenure of your payment period. One of the prominent reasons why annuity plans are the most preferred choice of customers over other retirement plans is that the customers can lock-in the interest rate being offered not just for a period of 10/15/20/25 years but for their entire life. Under most other retirement plans, you can only lock-in the interest rate for a maximum of 10 years and with interest rates of other saving instruments like bank FD and PPF falling drastically, investing in annuity plans is a smart move. Moreover, annuity plans are an excellent way to tackle reinvestment risk – which other investment options lack – and reduce the longevity risk. Most retirement options available in India come with an investment cap; however, there is no such investment caps/limit when investing in annuity plans. Under different annuity plans available online, now you also have the choice of investing under a plan that guarantees pension for life to both you and your spouse, and the invested amount being returned to your nominee. One important thing that customers must keep in mind while investing in annuity plans is that you choose your payment frequency wisely. Annuity plans give the customers the option of receiving fixed payout at intervals that suit them the best. You may choose from monthly, quarterly, half-yearly or annual payout as per your financial needs and requirements.
Buy Online to Earn Extra Pension
When planning to invest in annuity plans, it is always suggested to buy online as annuity plans sold online come with a plethora of benefits for the customers. The most sought after benefits of buying annuity plans online is that you receive an extra payout on the corpus invested in comparison to plans bought offline. For instance, say you invest Rs. 10 Lakh in an immediate annuity plan which guarantees lifetime pension to you and your spouse and return of amount invested to your nominee. Now, if you buy this plan online, you will receive a monthly payout of Rs. 5128 which comes to Rs. 64,100 annually, but if you buy the same plan offline, you will receive a monthly payout of Rs. 4961 which comes out to Rs. 62,100 annually. When buying the plan online, you receive Rs. 2,000 more per year and over a period of 30 years, you receive approximately Rs. 60,000 more than offline plans. When buying annuity plans online, the customer receives approximately 3 per cent extra pension on the corpus invested. Some other benefits of buying annuity plans online include ease of buying as the entire buying process is carried out online. Considering the ongoing pandemic crises, when everyone is avoiding stepping out of their houses unless very important, investing in plans online makes all the more sense. You do not need to visit the agent to discuss the details and features of different plans, rather everything can be done online within a few clicks. Most importantly, you can compare the different plans offered by different insurers online on various important aspects like features, payout amounts, variants of different plans and much more. When buying online, all a customer needs to do is select the annuity plan and transfer the money online and start receiving the payout as per the policy terms and conditions.