Planning for retirement requires clarity. After you have retired, you lack a stable income. You ought to prepare to have some reliable source of financial security so you may have peace of mind. The Guaranteed Pension Plan from IndiaFirst Life Insurance can offer both.
Here are six reasons why you should choose this plan for your golden years.
1. Assured Lifetime Income
A chief reason to invest in guaranteed pension plan by IndiaFirst Life is its assurance of lifetime payments. Once the deferment period ends, you receive a fixed annuity. These annuities remain unaffected by market fluctuations. This feature can prove crucial for some people, making this the best pension plan with guaranteed return. You know exactly how much you will get each month, quarter, half-year, or year. Such predictability helps with budgeting. It removes uncertainty about future expenses.
2. Multiple Annuity Options
Flexibility is a key feature to consider when you compare pension plans. This IndiaFirst Life plan offers five annuity options. You can choose between single life or joint life. You can opt between choices such as life annuity, life increasing annuity, life annuity with return of purchase price on death, life annuity with return of purchase price on death or on critical illness, and life annuity with return of purchase price on death or in instalment on survival. Each option targets a different need. For example, a joint life annuity secures your spouse’s income after you pass away. This ensures your partner does not face financial strain. Such variety helps you align with your retirement goals.
3. Return of Purchase Price Feature
One standout benefit is the return of your purchase price. During the deferment period, if you die, your nominee gets 105% of premiums paid. After the deferment period, under certain options, your nominee receives 100% of the purchase price on death. In one unique option, you also get instalments of your purchase price every five years after 20 years of annuity. This feature makes the plan stand out when you compare pension plans. It ensures your family retains a cash cushion, even if something unfortunate were to happen. This benefit adds an extra layer of security to your investment.
4. Critical Illness Coverage
Another compelling reason to invest in guaranteed pension plan is built-in critical illness cover. Under one annuity option, if you are diagnosed with a specified critical illness, the policy pays 100% of the purchase price immediately. This accelerates your benefits without extra premium. This component effectively blends health protection with retirement planning. It reduces the need to buy a separate rider, which often increases premium costs.
5. Limited Premium-Paying Term
A key advantage of this guaranteed pension plan is the short premium-paying term. You can choose to pay premiums over 5 to 10 years only. Once this period ends, annuity payouts begin and continue for life. Many plans require payments throughout your life. This plan asks you to pay only a fixed number of years. After that, you stop paying premiums. You simply enjoy the income. This feature enhances affordability. It also allows you to plan a final budget early. If you must stop paying after at least one year, the plan becomes paid-up with a reduced annuity, ensuring you still receive benefits.
6. Tax Benefits and Policy Loans
Tax efficiency and liquidity support this plan’s appeal. Premiums paid may be eligible under Section 80CCC or Section 80CCD(1B). Annuity payouts may be exempt under Section 10(10A), subject to prevailing income tax laws. These incentives lower your overall tax burden in the accumulation phase. Additionally, during the deferment period, you can avail a policy loan up to 80% of the surrender value. This facility acts as a financial safety net in emergencies. It helps you avoid dipping into other investments or borrowing at higher rates.
Utilising a Retirement Planning Calculator
Before you invest, use a retirement planning calculator to gauge your needs. Online tools like retirement calculators can be helpful to simplify the calculations, thus incorporating ease in your overall planning process. Input your expected retirement age, life expectancy, inflation assumptions, and desired monthly income. The calculator can help you decide on the premium-paying term and sum you need to secure the desired annuity. It will also show how this plan compares to others in terms of payouts and costs. Such analysis ensures you choose the most suitable option.
Choosing where to invest for retirement is crucial. When you compare pension plans, consider guaranteed income, flexibility, and security. The Guaranteed Pension Plan can meet these criteria. It offers assured lifetime annuity, multiple options, return of purchase price, critical illness coverage, tax benefits, and liquidity through loans. By combining the strengths of a pension plan and an annuity plan, it provides a comprehensive retirement solution. Use a retirement planning calculator to help with your decision. Invest wisely today to enjoy a comfortable tomorrow.
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