Deferred Annuity lets the policyholder pay the premium amount regularly in the accumulation phase for a few years. Once the tenure is over, the pension starts. The pension frequency can be decided by the policyholder. It can be monthly, quarterly, half yearly, or yearly. It is like any other investment product that helps you invest regularly.
In an Immediate Annuity Plan, where the premium is paid at one time in lump sum. The pension starts immediately after paying the premium. Again, the pension frequency can be decided by the policyholder- monthly, quarterly, half yearly, yearly.
In Life Annuity, the pension amount is paid to the policyholder till death. It also provides an option to the policyholder’s spouse to get the pension post his/her death.
The policyholder can specify a certain number of years he/she would want to receive the annuities. In case he/she dies before receiving the complete payment, the beneficiary can avail the annuity.
A Guaranteed Period Annuity lets you plan the investment in a way that you can choose the number of years you want to receive the annuities irrespective of the policyholder surviving that duration.
In this scheme, an individual can invest their money in the scheme which is used in the Equity markets for further returns. 60% of the amount accumulated can be withdrawn at the time of retirement, this amount won’t be taxable. The remaining 40% amount has to be compulsorily used to buy an annuity plan.
For people with high risk appetite, these plans invest a substantial portion of the premiums in high return-high risk investments such as money markets, non-government securities, bonds and stocks. The ULIP Pension Plans also have a life insurance component to cover premature death.
