| The average age of retirement which used to be | | | | and the nominee receives only the amount net of |
| in the range of 55 to 60 years, is now decreasing | | | | unpaid premiums and expenses. |
| as more and more individuals plan to quit regular 9 | | | | |
| to 5 work at an early age, and spend the later | | | | - Check the performance of the various pension |
| part of their life fulfilling their dreams. Retirement | | | | plans offered by the insurer. |
| planning through a pension scheme guarantees | | | | |
| regular income to the policy owner in the form of | | | | - A traditional pension scheme invests a |
| annuity or pension. | | | | considerable portion of the premium in |
| Types of Annuities or Pension Plans: | | | | government securities (G-Secs) and bonds, thus |
| Life Annuity: It ensures a stipulated regular income | | | | yielding low returns. Comparatively, investing in a |
| to an individual throughout his life. In case of death | | | | ULIP pension plan provides higher returns (if the |
| of policyholder, the invested amount is refunded | | | | investment in ULIP is well diversified). |
| to his nominee. | | | | |
| Guaranteed Period Annuity: It provides regular | | | | - Investment in a ULIP pension insurance policy |
| fixed income throughout an individual's life and also | | | | should be made only after considering the various |
| guarantees payment for a certain number of | | | | charges involved like allocation charge, fund |
| years to the nominee in case of a policyholder's | | | | management charge etc. |
| death. | | | | |
| Deferred Annuity: In this type of annuity the | | | | - Check the charges and deductions applicable on |
| policyholder 'defers' or postpones the annuity up | | | | surrendering the policy before maturity in case of |
| to a certain time period, hence it does not | | | | emergencies. |
| commence immediately. The premium payment | | | | |
| options in such a policy are either regular annual | | | | - Check for tax benefit provisions in the Pension |
| premiums or a single lump sum premium. | | | | Plan. Premium payments towards a Pension plan |
| | | | | are eligible for rebate under Section 80CCC. |
| Annuity Certain: In this type of plan, a stipulated | | | | |
| amount of annuity is paid for a fixed term (in | | | | |
| years) irrespective of how long the policyholder | | | | There are also some initiatives taken up by the |
| lives. | | | | government to promote old age income security, |
| | | | | like New Pension Scheme (NPS). It is a defined |
| Factors to be considered while investing in a | | | | contribution based pension plan. The NPS is |
| Pension Plan: | | | | regulated by Pension Fund Regulatory and |
| | | | | Development Authority (PFRDA). |
| - Compare the premium in various pension plans | | | | |
| and then select the one that best suits your | | | | It is important that individuals evaluate pension |
| requirements. | | | | plans from a retirement benefit perspective and |
| | | | | invest at an early age. In other words, the earlier |
| - Check whether the plan is with cover or without | | | | you take the step of investing in a pension plan, |
| cover. The former offers the sum assured to be | | | | the better retirement benefits you reap on |
| paid to the nominee in the case of an eventuality, | | | | maturity of the plan. |
| while in the latter case there is no sum assured | | | | |