Types of Pension Plans in India

The deferred annuity type of pension plan lets the policyholders receive annuity on a later date through single or regular premium payments. Over the course of the policy, they can save a substantial amount of money to be received as a pension. You can also avail of tax benefits with this type of pension plan.

Also Read: What is Annuity?

Under the immediate annuity type of pension, you deposit a lump sum amount and receive the annuities straightaway. It is up to you to choose from the range of annuity options and the amount to invest. In case of an unfortunate incident, the nominee is entitled to receive the benefits.

In this type of pension plan, the policyholder receives the annuity for a specific number of years. They can choose the period of payment at their convenience. The nominee of this type of pension plan receives the payments in case of the insured's demise.

The Government of India provides different types of pension plans for the retired population. It is also an opportunity for central and state government employees, except armed forces, to save for retirement. With this type of pension plan, the employees can invest at regular intervals in their pension account, which will be payable post retirement.

Know More: National Pension Scheme

The pension plans include life cover as well as an investment component. It means that the family members will receive a lump-sum payment upon the policyholder's demise.

However, it is essential to note that the insurance benefit amount may not be substantial with this type of pension plan.

With Max Life Forever Young Pension Plan (UIN - 104L075V03; A Unit-Linked Non-Participating Individual Pension Plan), you can secure a substantial retirement fund and choose the retirement age when you wish to receive the pension. There is also a partner care rider available to extend the benefits to your spouse.

You can also grow the savings in the retirement fund with this type of pension plan. The loyalty benefits add to the fund value at periodic intervals.

When you are not employed anymore, a guaranteed income source can make all the difference. Max Life Guaranteed Lifetime Income Plan (UIN – 104N076V11 ; Non-Linked Non-Participating Individual General Annuity Savings Plan) will ensure that you meet your financial needs independently throughout your life. This type of pension plan comes with the flexibility to choose annuity and pay-out options.

There are multiple immediate and deferred annuity options for the policyholder to customize their retirement income. You can choose to receive the pay-out on a yearly, half-yearly, quarterly, or monthly basis.

Max Life Perfect Partner Super (UIN - 104N077V03; A Non Linked Participating Individual Life Insurance Savings Plan) is exclusively designed to give your spouse financial protection against unforeseen events after retirement. You can also opt for a waiver of premium rider to this type of pension plan and relieve the burden of paying premiums in case of an eventuality.

Furthermore, there are bonus additions available with this type of pension plan. You can receive the accrued paid-up additions and terminal bonus, if any, at the end of the policy term.

All hard-working individuals have to manage their expenses carefully to fulfill several responsibilities in life. It can be challenging to visualize how your life will look after retirement in terms of money. So, find the right type of pension plan by mapping the timeline of significant life expenses.

Take the time to determine the possible changes in your responsibilities in a few years. It will help assess the needs of your financial dependents in alignment with your personal goals for post-retirement life.

The type of pension plan that can benefit you the most is heavily dependent on your current and future financial situation. If you have any debts or significant expenses in the future, consider if they will be present after retirement as well.

Consequently, you can arrive at the amount of investment in a particular type of pension plan to meet these needs.

An essential step in identifying the ideal type of pension plan is to compare different policies. Thorough comparison will give you a better perspective on your requirements and how they can be fulfilled efficiently. Going through the different types of pension plan features may uncover a need that you had not considered before.