For all those who are self employed, there is no question of receiving an employment-based pension. Even for those who are in a job, there is no guarantee of a secured pension plan after retirement because these days many companies do not provide a pension plan for their employees. Then, too, there is no social security scheme presently prevalent in India. All in all, most people have to work out their own pension plans.
In order to select the most appropriate pension plan you first need to decide about how much pension you are looking for, and at what age. To be able to decide about the required amount of pension, a family budget and cash flow chart should be prepared based on realistic expenses, holidays and future family commitments
Pension plan - Jeevan Nidhi from LIC
LIC's JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan. On survival of the policyholder beyond term of the policy the accumulated amount (i.e. Sum Assured + Guaranteed Additions + Bonuses) is used to generate a pension (annuity) for the policyholder. The plan also provides a risk cover during the deferment period. The USP of the plan being the pension can commence at 40 years. The premiums paid are exempt under Section 80CCC of Income Tax Act.
a . Guaranteed Additions: Guaranteed Additions @ Rs.50/- per thousand Sum assured for each completed year, for the first five years.
b. Participation in profits: The policy shall participate in profits of the Corporation from the 6th year onwards and shall be entitled to receive bonuses declared as per the experience of the Corporation.
This is an Immediate Annuity plan, which can be purchased through lump sum payment as Single Premium. The plan provides for annuity payments which are available throughout the life time of an annuitant. Various options are available for the type and mode of payment of annuities.
Premium is to be paid in a lump sum.
Minimum purchase price : Rs.50,000/= or such amount which may secure a minimum annuity of Rs.3,000/- p.a.
No medical examination is required under the plan.
No maximum limits for purchase price, annuity etc.
Minimum age 40 years last birthday, Maximum age 79 years last birthday.
The Life Maker™ Pension Plan from Max New York Life India
The Life Maker™ Pension Plan is a comprehensive investment linked pension plan to meet your post retirement financial needs, ensuring you complete peace of mind. In this pension plan, you can invest your premium moneys in our investment funds that offer investments of different types; with different combinations of debt and equity assets ranging from potentially high risk - high returns to potentially low risk - low returns to match your risk taking appetite.
Choose HOW MUCH you want to pay - you have the flexibility to invest amounts more than your ATP as Top Up premiums, of any amount, at any time, subject to the minimum amount of Rs 10,000/-.
During the deferment period, after 3 rd policy year, you may surrender this Policy at any time by giving us prior written notice. The surrender value will be equal to the Account Value. Life Maker Pension Plan has nil surrender charge (please note that u/s 80CCC(2) of the Income Tax Act, surrenders are taxable as income in your hands).
You can change the type of investments in your policy by “SWITCHING” your invested moneys between the different funds offered by us. Every policy year, 2 switches are free. The switch will be effected by canceling units in the fund you wish to exit and by purchasing units in the fund you wish to enter at the next available unit price.
You have flexibility to invest your premium in more than one fund. You can also redirect your premiums to more than one fund at any time. Every year, one such “REDIRECTION” is free.
Prior to your retirement date, you have the right to alter your retirement date once to not more than age 70 and not less than age 50 years.
On surviving to maturity (i.e. vesting date), you can withdraw up to 1/3rd of your Account Value, or such proportion of Account Value as permitted by the then prevailing laws – tax free. The rest of the maturity value will be used to buy an annuity from us or from any other IRDA approved annuity provider that you choose. In case you decide to buy the annuity from us, you will have to enter into a fresh contract with us, under which, during the Annuity period, we will pay you a fixed periodic amount for the rest of your life – this amount is called the annuity. This annuity will be based on your age, the annuity option chosen by you and the applicable annuity rates prevalent at that time, and will be payable to you annually/semi-annually/quarterly/monthly as per your choice.
In case of your unfortunate death prior to your retirement date, we will pay the value of units in your policy to your nominee(s). If your nominee is your spouse, he/she may use the available Account Value in any one of the following ways:
Lump sum Cash Benefit - At your selected retirement age, you can withdraw 25% of the benefit amount as a cash lump sum.
Monthly Cash Income - The balance amount is used to buy an annuity that will pay you a regular monthly income for the rest of your life or the period you choose.
10% Guaranteed Additions - An additional 10% of the basic sum assured will be payable either on death or on survival at the time of retirement, provided the policy has been in force for 10 years. Nirvana is the only plan that offers you this benefit.
Bonus* - From the 5th policy anniversary onwards, a bonus as may be declared by Tata AIG Life Insurance Company Ltd., which will be credited to your policy. The bonus will be paid out on a compounded basis - so you will earn bonus on your maturity value - and all vested bonuses. A terminal bonus will also be paid on retirement, or in the unfortunate event of death, if the policy has been in force for more than 10 years.*Bonus will be based on Tata AIG Life Insurance Company Ltd.'s performance.
Tax Benefits - The premiums paid are eligible for the benefits under section 80 CCC(1). Up to Rs.10,000 is deducted from taxable income as per current Income Tax rules. Apart from this, the 25% lumpsum cash benefit and the bonuses declared are tax free as per current Income Tax rules.