Securing your future in today’s uncertain times is crucial. An annuity plan provides a future payout in regular installments. It ensures your life after retirement is stress-free and financially secure.
However, an annuity is often confused with a pension plan. Therefore, it is essential for you to duly understand what an annuity plan is and its different types.
An annuity is an agreement between you and an insurance company that guarantees to provide a regular income during your retirement. You can pay premiums towards the plan in a series of payments or as a lump sum.
An annuity plan helps in maintaining a regular income upon retirement or when you are battling the challenges of unemployment. You can customise annuities based on your specific requirements.
Apart from protecting you during retirement, annuities serve the purpose of protecting your loved ones during emergencies.
After deciding on the type of annuity plan you wish to buy, you make a lump sum investment toward it. You can also make a series of payments. This is known as the accumulation phase.
Theannuity service provider (ASP) , then, pays you on a future date or at frequent intervals. This timeline can be monthly, quarterly, annually, or a one-time lump sum. This is known as the disbursal phase.
Many factors, such as the tenure of the annuity, determine the income payout. You can choose to receive a regular income for a fixed time or lifetime. The income amount varies depending on whether you have chosen a fixed or variable annuity.
The key types of annuities with examples are as follows:
Wrapping Up
Annuity plans provide a sense of confidence during retirement. You can pick a plan based on your capacity to pay premiums and then enjoy a regular income throughout your retirement. It is vital to assess your goals and financial circumstances before selecting a type of annuity plan.
PNB MetLife Immediate Annuity Plan is an ideal choice to live comfortably after your retirement. It secures your spouse with a regular income even if you are not around.
India has four types of annuity plans: immediate, deferred, fixed, and variable.
You can claim deductions of up to ₹1.5 lakh per annum for the premiums paid under the policy as per the conditions of Section 80C of the Income Tax Act, 1961.
Disclaimer:
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
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