A Retirement Pension plan is now essential and ought to be prioritized due to improvements in the rising cost of living, healthcare, and life expectancy
Why choose Retirement Pension Plans offered by India first?
A plan that will provide a stream of income at that time is necessary because, after retirement, a person loses their source of regular income. In that case, pension plans are helpful because they offer annuity payments that assist in covering post-retirement costs.
Following is a list of some prevalent plan trends:
- There are two types of plans: deferred annuities and immediate annuities.
- The policyholder can choose how many years the annuity payments will be deferred under deferred annuity plans. The policyholder must pay premiums during those years, and the nominee will become eligible to receive the death benefit in the event of the policyholder’s passing. The date that the deferment period ends and annuity payouts begin is known as the “vesting” concept.
- Plans for immediate annuities do not use the waiting concept. After the one premium, known as the Purchase Price, is paid, the annuity
begins. The plans do not apply a death benefit because the payments cease upon the death of the policyholder.
Factors to Consider
When you reach retirement age, your income stops but your daily expenses do not. Furthermore, it appears that medical costs are rising. As a result, it is not wise to rely on our children to take care of us in our old age, and one should make retirement plans. These programs offer money when it is most needed, making them useful tools for retirement planning. Here are a few methods for selecting the best retirement savings plans.
1. ROI should be lower than the inflation rate – A long-term financial objective could be retirement planning. Protecting the invested amount from capital erosion brought on by fluctuating inflation rates is a significant challenge for many people when investing for the long term.
2. Find a sufficient retirement pension – When selecting a retirement pension plan, it’s important to keep in mind that you’ll receive enough pension income after you retire to support both you and your family.
3. Reduce risk and ensure a certain return – A person can increase their portfolio by taking some risks. But as you get older and think about your near future, you need to try to reduce the risk factor and look for strategies that guarantee you secure returns.
4. The vesting time – For the vesting period, you must always select the retirement savings plan that best suits your needs and requirements.
5. A suitable annuity substitute – You must pick the retirement plan with the best annuity option for you. One alternative to a lifetime retirement savings plan, for instance, guarantees an annuity for a certain number of years regardless of whether the assured person lives or not.
6. Charges – People need to always choose options with very low costs or expenditures. You need to realize that the more money you spend on expenses when deciding to take out a savings plan, the less money you will have saved for retirement.
What are the types of Retirement plans Available in India
In India, there are many different kinds of retirement plans, but they typically fall into one of four categories: life/immediate/deferred annuity, National Pension Scheme, pension funds, or ULIPs.
Pensions with or without life insurance
- While you are saving for the future in a pension insurance plan, you can rest easy knowing that your life is protected.
- The beneficiaries listed in your insurance retirement policy receive a lump sum sum as the sum assured in the event of an unfortunate event.
- There are some pension plans in India that don’t include life insurance. In the event of your untimely death, these plans pay your beneficiaries the lump sum you have accrued during the plan’s operation. In this situation, your nominees will not receive any life insurance or sum assured payments.
Pension plans with annuity insurance
A policy known as an annuity plan enables you to make one-time or recurring payments to accumulate a lump sum sum that earns interest and bonuses (if any). After the term of premium payments has ended, or at some point in the future, this corpus is then used to pay out a regular income.
- You can choose a payment frequency for the amounts you receive under an immediate annuity plan and pay a lump sum premium at the start of the plan in exchange for receiving an annuity right away.
- Two distinct phases—accumulation and income—are present in a deferred annuity plan. With this type of pension arrangement, you can accumulate funds during the policy’s term and then receive a pension in the form of a regular annuity payment that will start at a future date of your choosing.
- In a life annuity plan, the policyholder receives a pension payment up until death. You can make sure that your partner receives the pension payment after your passing by selecting the “with partner” option.
Traditional Pension Plans
Public Provident Fund and Employee’s Provident Fund are two well-known pension fund types in India. All salaried workers who participate in an EPF receive a portion of their employer’s salary as a pension fund contribution. A PPF is a well-known savings instrument that provides a lengthy lock-in period, the benefits of compound interest, and the opportunity to preserve your capital.
NPS, or the national pension system
The NPS, created by the Indian government, specifically serves people who want to accumulate retirement funds. You can choose between auto and active modes with this transparent tool. Corporate bonds, government bonds, and equity are available as investment options in the auto mode. Bonds make up the remaining investment in the active mode, with equity accounting for 50% of it.
Plans for ULIP Pensions
Unit-linked insurance plans are market-linked products with the dual function of actively managing your money and protecting your life. Depending on your risk tolerance, the premiums you pay are invested in bonds, securities, and stocks.
Benefits of buying Pension Plan
The advantages of a longer life are being reaped by Indians thanks to medical advancements and expanding access to better healthcare facilities. A longer lifespan would be of little use if you were unable to live comfortably in retirement. A financially secure retirement experience is the aim. Retirement benefit plans can help in this situation.
Money’s value is constantly fluctuating as a result of inflation. In a few decades, the same thing won’t be available for purchase for the same amount of money that it would cost today. Indian retirement plans assist you in setting aside and investing your current assets in order to generate the income you’ll need in retirement.
Making retirement plans and purchasing a pension plan are both strongly advised.
No need to make concessions Even if there is no incoming salary, with proper retirement planning, you can guarantee that you will never run out of money during your retirement.
You can methodically set aside small sums of money today to ensure that you never have to lower your standard of living in the future by investing in retirement plans in India.
A big goal is being pursued in small steps. One small step is all it takes to travel a million miles. Pension plans are long-term investment tools that assist you in consistently investing a small amount of money over a lengthy period.
The effects of compounding and the addition of potential bonus amounts will further improve the corpus that is created by these consistent savings. Start now to ensure your financial security tomorrow.
Establishing a steady income stream
Many individuals are skilled at setting aside small sums of cash for future use. The proper management of a sizable corpus is also crucial, though. What you’ll need in retirement is a steady income stream to replace your professional salary. In order to generate a guaranteed income during retirement, pension plans assist you in investing and reinvesting your corpus. You won’t miss your salary if you have retirement plans in India.
strategy for protecting your loved ones
You can get life insurance through the right pension plan, protecting your loved ones in case of an untimely death. You can select an annuity plan that will provide your dependents with a safe retirement income after you pass away.
Adding to the provident fund savings
If there ever was a time when basic provident funds and gratuity savings would have been sufficient for your retirement, that time has long since passed. These required retirement savings are insufficient to support your standard of living and needs once you retire.
Additionally, the majority of provident funds permit partial withdrawals for significant occasions like a marriage or a child’s birth. The corpus is further depleted by withdrawals, making it even less sufficient.
The need for provident funds may be supplemented or even entirely eliminated by pension plans. If you have a retirement plan in place, you can use your gratuity and provident fund payouts however you see fit.
Reduce the pressure on your kids.
Families used to be larger and there were more kids for parents to rely on. As a result, the financial burden placed on children to care for their elderly parents was dispersed and minimized. Currently, nuclear families are the norm and families tend to be much smaller.
If you don’t have a plan for your retirement, your children will have to shoulder a huge financial burden to care for you in your later years. This might result in them giving up on their goals and ambitions because of a lack of resources. A retirement annuity insurance policy can do a lot to protect your financial independence and the security of your kids.
Reap Tax advantages
You may be able to receive tax breaks on the premiums paid for a retirement policy, subject to applicable Income Tax laws in India. Benefit from retirement insurance benefits while claiming tax deductions for premiums paid and maturities received at the conclusion of the pension plan’s term.
What are the types of pension plans offered by India first life?
With your retirement planning needs in mind, IndiaFirst Life has developed a selection of pension plans. Having IndiaFirst Life pension plans on your side will help you live stress-free. The types of pension insurance plans that IndiaFirst Life provides are as follows:
IndiaFirst Retirement Guaranteed Plan
- Participating, non-linked, endowment-deferred pension plan
- Insurance with a guaranteed annuity
- Options for investing include regular, limited, and single premiums.
- a forty-year policy term
Immediate Annuity Plan of IndiaFirst
- An immediate annuity plan that is non-linked and non-participating
- choice of vestment age between 40 and 80 years
- To safeguard your partner, consider a joint life.
- Refund of purchase price choice
Plan for a Guaranteed Annuity from IndiaFirst
- Individual annuity plan without links or participants
- There are 12 different types of annuities, such as escalating life annuities, return of purchase price annuities, deferred life annuities, and life annuities.
- Lifetime income is guaranteed.
- To safeguard your partner, consider a joint life.
IndiaFirst Annuity Plan
an immediate annuity plan that follows maturity with consistent cash flows for the rest of the investor’s life. The following list of features applies to the plan:
- According to the plan, the annuity payments will begin the month following the single premium payment.
- For the entirety of the annuitant’s life, annuity payments are due.
- According to Section 80CCC of the Income Tax Act, the premium paid to purchase the plan is not subject to taxation.
- Default Age
- Existing Clients – 0 years 40 years for new clients- 80 years
- Purchase Cost
- Rs.50, 000
- There is no restriction
- Frequency of Annuity Payments
Q1. How to pay premium? What are the modes of payment available?
Ans – The following methods of payment for INDIAFIRST Life Insurance’s premiums are available:
b. a debit or credit card
c. ECS, or electronic clearing system
d. Money in the form of a check
Prior to participating in ECS, you must register by properly signing and submitting the ECS form. Only a few cities can access this facility.
Q2. How can I check the policy status for IndiaFirst Life pension plans?
Ans – Log in to your IndiaFirst Account with the assigned User ID and password to view the status of your policy. This information is connected directly to your policy number. Once you’ve logged in, a detailed tab with all the necessary information about your policy will appear.
Q3. What is the policy renewal process for IndiaFirst Life pension plans?
Ans – Log in to your account to start the process of renewing your policy, then choose to pay online.
If you had originally purchased the policy, you could also choose to use the ECS or Auto debit option to pay the premium. You can fill out the necessary forms and submit them along with the required paperwork to the closest branch office to have the policy renewed.
Q4. What is the company’s process to settle claim for IndiaFirst Life pension plans?
Ans – The process for resolving claims at INDIAFIRST Life Insurance is transparent and easy to understand. Within a week of the incident, you must inform the company about it. Various methods of intimation are available, including:
2. By sending the information via courier
3. Contact us through Advisor.
4. Getting in touch with us at any of our branch offices.
As stated on the website, a set of documents must be submitted to the business. Within 15 days of receiving the same, the claim is resolved.
Q5. What is the policy cancellation process for IndiaFirst Life pension plans?
Ans – Fill out the necessary form, along with the surrender fees specified in the policy, and deliver it to the closest branch office to cancel a policy.
The option to cancel the policy is available to new customers for about 15 days if deemed necessary.