Pension plans are designed to help individuals accumulate funds throughout their working years to support their retirement income needs. They work by allowing individuals to contribute a portion of their earnings towards the plan during their working years. These contributions are invested and grow over time, generating returns and helping you build funds for your retirement.
Peaceful Post-Retirement Life
Tax Free Regular^ Income
Wealth Generation to beat Inflation
A pension plan is a type of investment plan that helps individuals invest for their future retirement needs. It allows you to accumulate corpus for your retirement by making either a lump sum investment or through regular premium payments over a period of time. These plans ensure that you have a secure future by providing you with a guaranteed steady income stream during your retirement years. By contributing to a pension plan throughout your working years, you can build a substantial corpus that will support your financial needs when you are no longer actively employed.
The following list will help you to choose the best pension plan among various options available:
| Pension Plans in India | Entry Age | Maturity Age | Policy Term (PT) | Minimum amount to Invest (yearly) | |
| Tata AIA Fortune Maxima | 18 – 60 years | 100 years | 100 minus issue age | Single: Rs. 25,000; Limited: Rs. 12,000 p.a. | Get Details |
| Max Life Online Savings Plan | 18 – 60 years | 85 years | 5 – 52 years | Rs. 12,000 p.a. | Get Details |
| HDFC Life Click 2 Wealth | 18 – 60 years | 18 – 99 years of age | 20 – 64 years | Rs. 12,000 p.a. | Get Details |
| Max Flexi Wealth Advantage Plan | 18 – 50 years | 18 – 75 years | 10 – 40 years | Rs. 24,000 p.a. | Get Details |
| Bajaj Allianz Life LongLife Goal | 18 – 65 years | 99 years | 99 years minus Entry age | Rs. 25,000 p.a. | Get Details |
| ICICI Prudential Life Signature | 18 – 60 years | 18 – 75 years | 10-30 years | Rs. 30,000 p.a. | Get Details |
| HDFC Life Smart Pension Plan | 25 - 70 years | 40 - 80 years | 10 - 55 years | Rs. 30,000 p.a. | Get Details |
| ICICI Prudential Signature Pension | 25 - 65 years | 40 - 80 years | 20 - 55 years | Rs. 60,000 p.a. | Get Details |
| PNB Goal Ensuring Multiplier | 18 – 60 years | 99 years | 39 – 99 years | Rs. 18,000 p.a. | Get Details |
| Canara Promise4Growth - Life | 18 – 60 years | 18 – 80 years | 10-30 years | Rs. 12,000 p.a. | Get Details |
| Kotak E-invent - Retire Rich Plan | 18 – 50 years | 28 – 60 years | 10/ 12/ 15/ 20 years | Rs. 24,000 p.a. | Get Details |
| Edelweiss Life Tokio Wealth Secure Plus | 18 – 60 years | 18 – 70 years | 5-25 years | Rs. 24,000 p.a. | Get Details |
| Tata AIA Fortune Guarantee Pension | 18 – 75 years | 40 – 85 years | 5 – 15 years | Rs. 12,000 p.a. | Get Details |
| Max Life SWP – Long Term Income Plan | 18 – 60 years | 60 – 85 years | 60 – 80 years minus Entry Age | Rs. 11,000 p.a. | Get Details |
Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer. The tax benefit is subject to changes in tax laws. *Standard T&C Apply
Following are the details of the best pension plans by insurance companies:
Tata AIA Fortune Maxima: ULIP with life cover, investment flexibility (funds or Enhanced SMART strategy), and rider options.
Max Life Online Savings Plan: Non-participating ULIP with life cover and wealth creation. Offers death benefit options and unlimited free fund switches.
HDFC Life Click 2 Wealth: Participating ULPP with guaranteed life cover, loyalty additions, and 13 fund options.
Max Life Flexi Wealth Advantage Plan: ULIP for wealth building with guaranteed loyalty additions, flexible plans, and unlimited free switches.
Bajaj Allianz Life LongLife Goal: Non-participating ULPP with guaranteed life cover and annuity payout. Offers waiver of premium options and premium reduction flexibility.
ICICI Prudential Signature Plan: Participating ULIP with guaranteed life cover, loyalty additions, and diverse fund options.
HDFC Life Smart Pension Plan: ULPP for retirement corpus with coverage up to 105% of premiums, flexible vesting date, and enhanced retirement savings.
ICICI Prudential Signature Pension Plan: ULPP with low charges, top-up options, emergency access, and delayed pension start date.
PNB Goal Ensuring Multiplier Plan: ULIP with life insurance and investment options, fund management charge returns, child-related benefits, and premium waiver options.
Canara HSBC Promise for Growth – Life Plan: Retirement plan with life insurance, plan options (Promise4Wealth, Promise4Care, Promise4Life), and loyalty additions.
Kotak e-Invest Retire Rich Plan: Investment plan with life insurance, 100% premium allocation, additional fund value, and retirement income options.
Edelweiss Life Tokio Wealth Secure Plus: Non-participating ULIP with guaranteed life cover, maturity benefits, fund selection, and low-cost entry.
Tata AIA Fortune Guarantee Pension Plan: Non-linked, non-participating pension plan with guaranteed retirement income, life insurance, and flexible plans.
Max Life SWP – Long Term Income Plan: Whole-life insurance based retirement plan with income guarantees, cash bonuses, and flexible withdrawal options.
Pension plans work in two phases:
Contributing: You regularly contribute a portion of your income to the pension plan of your choice.
Investment: These contributions are invested in various funds and assets of your choice, based on your risk tolerance and investment goals.
Growth: The invested funds grow over time, potentially increasing in value due to market returns.
Vesting: Once you reach the "vesting age" (usually retirement age), you become eligible to start receiving pension plan benefits.
Annuitization: A portion of your accumulated funds is used to purchase an annuity. An annuity is a financial contract that provides you with a guaranteed stream of income for life.
Withdrawals: You will also be able to withdraw a portion of your accumulated funds as a lump-sum payment for your needs.
The three main eligibility criteria for purchasing retirement plans in India are:
Entry Age: In major cases, the minimum entry age for a Pension Plan is 18 years, but some plans require an entry age of 30 years. The maximum entry age is usually around 75 years.
Premium: Policyholders must pay a minimum premium for their Pension Plan, as the pension amount is based on the premium paid.
Vesting Age: The age at which a policyholder begins receiving their pension is known as the vesting age, which is usually set at 40 years but can vary depending on the insurance provider.
Below are the key benefits offered on purchase of a retirement or pension plan:
Sum Assured: The sum assured is a definite amount offered to the nominee of the plan at the end of the pension plan tenure. It is generally 10X the annual premium or the fund value of the policy.
Tax Benefits: Premiums paid qualify for tax deductions under Section 80C, and maturity proceeds can avail of tax exemption under Section 10(10D) of the Income Tax Act, 1961. For Pension plans without risk coverage, the customer gets tax-free maturity under section 10(10A) and Section 26AB.
Annuity: An annuity is the fixed amount you will receive each year throughout your life tenure on the purchase of an annuity plan. The annuity can be immediate or deferred, depending upon the nature.
Surrender Value: The surrender value of a pension plan is the amount the insurance company will pay you if you surrender the plan before its maturity.
Flexibility: Pension plans provide various options for premium payment (lump sum or periodic) and annuity payouts (monthly, quarterly, or annually).
Risk Coverage: Retirement plans may or may not include life insurance coverage based on the choice of the customer. In case the customer opts in for risk cover, it provides financial security to dependents.
A wide range of pension plans in India are available to meet various financial needs. These plans have multiple classifications based on the plan structure and benefits.
Let's explore these pension plans in detail:
| Pension Plans | Description |
| Deferred Annuity |
|
| Immediate Annuity |
|
| Annuity Certain |
|
| Guaranteed Period Annuity |
|
| Life Annuity |
|
| National Pension Scheme (NPS) |
|
| Pension Funds |
|
| Whole Life ULIPs |
|
| Defined Benefit |
|
| Defined Contribution |
|
| HDFC Life Insurance |
|
Below is the list of people who should consider investing:
Individuals Seeking Tax Benefits: Maximize tax savings under Section 80C and Section 10(10D).
Young Professionals: Start early to benefit from compounding interest and build a secure retirement fund.
Self-Employed Individuals: Take control of your retirement savings, as there are no employer-sponsored plans available.
Employees Without Pension Benefits: Don't rely solely on government schemes; secure your retirement with your own pension plan.
Those with Irregular Income: Ensure financial stability in your non-earning years by building a reliable corpus.
Anyone Planning for Inflation-Protected Income: Protect yourself against rising costs of living with plans offering increasing annuities.
Consider the following factors before buying a pension plan:
Retirement Age and Goals: Determine your desired retirement age and lifestyle you want post-retirement.
Financial Needs: Assess future expenses like healthcare, inflation, and daily living costs to estimate your required retirement corpus.
Plan Type: Choose between traditional pension plans, market-linked plans (ULIPs), or annuity-based plans based on your risk appetite.
Premium Affordability: Ensure the premium amount fits within your current budget.
Tax Benefits: Evaluate tax deductions on premiums and exemptions on maturity.
Annuity Options: Check for flexibility in annuity payouts—lump sum, monthly, or increasing annuities to combat inflation.
Life Cover: Look for plans that provide life insurance coverage along with retirement benefits.
Flexibility and Add-Ons: Opt for plans that offer withdrawal options, top-ups, or riders for critical illness or disability.
Plan Performance: Analyze historical returns for market-linked plans and the financial strength of the insurer.
Loan Facility: Check if the plan allows borrowing against the policy in case of emergencies.
Inflation Adjustments: Ensure the plan offers features to keep up with rising costs, such as increasing annuities.
To estimate the amount needed post-retirement, keep in mind the following factors:
Start Early: The earlier you start, the more time you have to build a corpus.
Set a Goal: Set aside a good percentage of your total earnings for retirement.
Target your lifestyle: Plan for the lifestyle you want after retirement.
Account for Inflation: Remember that the cost of living will increase.
Diversify Investments: Spread your investments across different asset classes to reduce risk.
Save Consistently: Maintain consistent savings habits.
Use a retirement calculator: A pension plan calculator can help you plan better.
Review and adjust: Regularly review and adjust your investments as needed
Retirement planning is the process of preparing your finances for the retirement stage of your life. It involves setting goals, estimating your income needs, and taking steps to accumulate and manage funds to support those needs throughout your retirement years.
It is important to have a well-thought-out retirement plan that considers factors such as inflation, healthcare costs, and changing lifestyle needs. Start planning for retirement as early as possible to accumulate enough funds for future expenses and maintain a standard of living during retirement years.
You're busy, but retirement isn't that far off. Now's the time to get serious about saving. Aim to set aside 15% of your income each year. While planning your retirement, consider factors like lifestyle, lifespan, and inflation. Diversify your investments, review regularly, and seek professional advice. Early and consistent saving ensures a comfortable retirement. Here are some other key points to consider:
Determine your retirement goals: Assess the lifestyle you want to maintain during retirement. Consider expenses like housing, healthcare, travel, and hobbies.
Estimate retirement duration: Calculate the number of years you expect to live after retirement. It's wise to plan for a longer retirement to ensure you have sufficient funds.
Consider inflation: Account for the impact of inflation on your retirement savings. Inflation erodes the purchasing power of money over time, so your savings need to keep pace with it.
At different ages, you have different sets of responsibilities and priorities. Hence, your retirement plan at different ages can also be different. It is up to you to balance your expenses and retirement investments as per your current age and financial obligations. Let us have a look at how you can approach your retirement planning age-wise.
To buy a retirement plan, you will want to start by finding out about your financial goals, then follow these steps:
Step 1- You can check retirement plans on this page or through the Policybazaar homepage.
Step 2- Check the features and premiums of different plans to find the best fit for you.
Step 3- Pick and choose the most suitable plan that aligns with your goals and needs.
Step 4- Think about adding on features or adjusting coverage if needed to modify the plan according to your situation.
Step 5- Make your payment online and receive confirmation about your retirement plan.
Policybazaar offers you certain facilities that ease out your experience in purchasing a pension plan. Let us learn them below:
Wide Range of Options: You can compare multiple pension plans from top insurers on a single platform.
Easy Comparison: Policybazaar allows you to compare features, benefits, and premiums of different plans to make an informed decision.
Customizable Plans: Find plans customised to your retirement goals, budget, and financial needs.
Transparent Process: No hidden charges; all details are clearly presented before purchase.
Expert Assistance: Get guidance from financial advisors to choose the best retirement plan.
24/7 Customer Support: Round-the-clock assistance for queries, claim processes, and policy management.
Pension Plans play an important role in securing financial stability during retirement. With a diverse range of options, individuals can choose pension plans according to their choices to meet specific needs, ensuring a comfortable and worry-free post-retirement life. Planning ahead and selecting the right pension plan are essential steps towards a secure and fulfilling retirement journey.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved
insurance plan.
# The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).
Tata AIA
Max Life
Bajaj Allianz
SBI Life
HDFC Life
ICICI Prudential
Edelweiss Life
Kotak Life
Future Generali
PNB MetLife
Aditya Birla Sun Life
Aviva
Ageas Federal
Bandhan Life
Canara HSBC
IndiaFirst
Pramerica Life
Reliance Life
Sahara Life
Shriram Life
Star Union
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