Insurance Planning in India for NRIs – Get FREE Pension & Retirement plans
Pension plans are great advantages for a regular and comfortable income after retirement. Insurance companies also offer them to individuals for generating a regular stream of income after retirement. They are not life insurance plans, but made in installments or lump sum payments which you end up making for a given period of time. They can be made quarterly, half yearly or annually for life or a fixed number of years.
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You need to know some basic differences between annuities and a life insurance cover. Unlike life insurance cover, annuities do not offer a guarantee for an income for life or a fixed period of time. Annuities are bought for the sole purpose of generating income which is like pension after you leave service and decide to live a comfortable life. If you buy a pension plan or an annuity, you could be assured of generating a life time income.
If you retire from service with a large superannuation benefit, you would need a perfect pension plan so that you can effectively invest the money and earn a comfortable income. These payments are annual in nature and spread in such a way that you won’t be hard pressed paying them.
A life annuity will guarantee a specified amount as long as you live and after your death, the money invested will go to your nominee. For a guaranteed period annuity, your nominee will get a fixed amount of money for a predetermined number of years.
Under the annuity certain plan, the stipulated annuity is paid for a predetermined number of years and stop after some time which could precede your lifetime. For deferred annuities, the amount is deducted from your taxable income during payment and the interest will not be taxed right away. But the proceeds of the annuity will be taxed as soon as you receive them. You can choose from a wide array of pension plans in India like UPIL, Tata AIG, Reliance, and those offered by Bajaj, LIC, ICICI and HDFC.
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In maturity payouts, you will receive the entire corpus as son as it matures. For pension plans, you will have the option of withdrawing a third of the maturity amount. In the case of death benefits, the nominee will receive the entire sum and bonuses. You can also take the option of receiving the entire amount in cash which can be used for buying up annuities. People looking for pension plans also look for death benefits to ensure their dependents live a reasonably comfortable life after their deaths.
You can also avail of loads of tax benefits as well under section 80 c. For premiums paid up to Rs 1 lakh yearly, they are eligible for deduction. Premium payments towards pension plans are also eligible for deduction.
You can end up preparing for your future, securing a comfortable lifestyle when you retire as well as enjoy tax benefits on your present income. The pension plans are fantastic and can ensure that your stay in India after retirement will be full of fun and frolic. If you are reasonably healthy, there is no way of lowering your lifestyle.
Maturity payouts are not taxed in conventional insurance plans and the money is absolutely free right from the time you receive it. A third of the maturity amount, if withdrawn, will be treated as tax free. Marginal rate of tax will be employed on the balance amount. There are several options in pension plans and your best bet would be to opt for the one that would suit you best. To begin investing is not easy as you need to check out the websites of the insurers and pension planners and compare their features.