Investing in a pension scheme in India is one of the best ways to create a substantial post-retirement corpus for yourself. It’s one of the few things that you need to do to ensure that you continue to live a financially independent life even after you have stopped working, so that you don’t have to compromise on anything in life.
If you are looking for a suitable pension scheme in India, then we will help you understand pension schemes, and the types of schemes that you can opt for, so that you can make an informed decision when choosing the best pension plan that aligns with your financial goals for the future.
What is a Pension Plan?
Simply put, the investment definition of a pension plan is that it helps create a pension fund once you have retired and regular income stops flowing in. This helps you not only sustain your day-to-day living expenses, but also take care of your other needs such as medical emergencies, rents, etc. so that you can continue to maintain your lifestyle without any compromises.
You must be aware of the provident fund that’s also a type of retirement fund where the employer makes the larger investment to build your corpus. However, with inflation rising steadily year-on-year it’s best to also create your own corpus to supplement the one created by your employer for greater returns.
Now that we have got the crux of it, let’s have a brief look at the types of pension scheme in India that would help you select the best pension plan for yourself!
- National Pension Scheme: The NPS is a pension scheme in India offered by the Government to both employed and self-employed individuals. The plan is available across the board to everyone between 18-70 years of age. Since it’s backed by the Indian Government, it’s considered to be one of the safest options if you want guaranteed returns and a regular pension once you have retired.
- Deferred Annuity: You can invest in a deferred annuity plan to build significant savings over the course of the scheme. Under this plan, the policyholder can either make a single lumpsum payment or pay daily premiums to build a corpus over time.
- Immediate Annuity: This is for the late starters who want greater returns, but didn’t start investing early on. By making a single lumpsum payment, a person gets immediate annuity as the name suggests. This is great if you never invested in a pension plan, and want to create an immediate corpus.
- Annuity Certain: This pension scheme in India offers regular payouts for a set number of years to the policyholder. Moreover, it also gives the policyholder the flexibility to choose the duration of the payment. In case the policyholder passes away before the scheme reaches maturity; the nominee (s) of the policyholder become entitled to receive all investment made towards the plan as payout.
- Life Annuity: This pension scheme comes ‘with spouse’ option that makes the spouse of the policyholder eligible to receive pension in case the policyholder passes away. The scheme is active as long as the policyholder is alive.
Benefits of the Best Pension Plan
Now that you have an understanding of pension scheme in India, and a few of the best pension plan available in the market; it’s time to look at the benefits the best pension plan offers!
Guaranteed Vesting Benefit
The investments that you make in a pension fund gives you a steady and fixed income once you have retired. This helps you create a second source of income once you have stopped working to help take care of your day-to-day expenses without compromising on your quality of life.
The best pension plan offers you the dual benefit of creating a corpus and ensuring the financial future of your loved ones by providing life cover. In case of untimely demise of the policyholder, the nominee (s) of the policyholder become eligible to receive the sum assured under the policy.
Flexible Payment Terms
The best pension scheme in India also comes with the added flexibility of letting you choose the payment terms that best align with your financial goals.
Customize Your Retirement Plan
By offering riders as add-ons to the policy such as critical illness cover, accidental protection, etc. You can further strengthen the pension plan with additional benefits and customize it as per your unique requirements.
You become eligible for tax breaks up to an amount of ₹1.5 Lakh in a financial year by investing in a pension scheme in India under Section 80 C of the Income Tax Act.
With so many benefits on offer, there is no reason why you shouldn’t start investing in the best pension plan in India as of today. Max Life Insurance offers you all of these benefits under their pension scheme in India to help you sail through the second innings of your life. So, if you are really serious about ensuring your financial independence post-retirement, start investing right now!