Pension Plan
Pension Plan
About Pension Plan
Pension plans also known as retirement plans are investment plans that lets you allocate a part of your savings to accumulate over a period of time and
provide you with steady income after retirement. Even if a person has a good amount of savings, a pension plan is nevertheless crucial.
provide you with steady income after retirement. Even if a person has a good amount of savings, a pension plan is nevertheless crucial.
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Inculcates a Savings Habit
A pension plan is a long term investment where you pay small and regular premiums and build a retirement corpus. This helps inculcate fiscal discipline. If you start early, in your 20’s, you can save a sizeable amount by the time you retire (say at 60).
Safeguards the Interests of your Loved Ones
Your life is an asset. Over your working years, you leverage this asset to create wealth. However, even in your absence, you would like to secure your family’s future. Through an insurance-led pension plan, you can provide for your family even when you’re not around.
Gain from Compounding
You know that the longer one stays invested, the more he/she is likely to gain. A pension plan gives you the option to invest regularly and build a huge retirement corpus.
Offers a Flexible and Scalable Investment Plan along with Insurance
Pension plans are flexible. Based on your financial risk appetite, you can choose an investment theme ranging from aggressive to balanced to conservative. You can also switch between funds as your outlook towards risk changes. This flexibility is important because pension schemes are long-term investments and personal, financial and economic circumstances will certainly change over the period.
Features of Pension Plan
A pension plan is a type of retirement plan where an employee adds money into a fund that includes contributions by the employer.
The worker’s pension payments are determined by the length of the employee’s working years and the annual income they earned on the job leading up to retirement.
The worker’s pension payments are determined by the length of the employee’s working years and the annual income they earned on the job leading up to retirement.
There are 2 main types of pension plans: defined benefit (DB) and defined contribution (DC)
Corpus of funds
With pension plans you can build a corpus of funds which can be used to satisfy you financial needs post retirement.
Limited premium payment term
You can pay premiums for a limited term of 5/7 or 10 years based on your requirements.
Tax benefits
Pension plans are eligible for a tax deduction.
Life long income
Retirement plans provide lifelong guaranteed income as annuity.
Pension Policy – Eligibility
Any salaried, self-employed or professional Public and Privat companies, Government sector employees including Public Sector is eligible for a Pension Plan Policy.
Age
Maximum age of applicant at loan maturity: 60 years
Income
Minimum Net Monthly Income: Rs 15,000
Credit Rating
Applicant should have the bank specified credit score.
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