Pension Plan

Retirement planning is a critical aspect of life that often requires thoughtful consideration and strategic decision-making. As we envision our golden years, a well-crafted retirement plan becomes essential to ensure financial security and independence during post-work life. This article explores the significance, types, and benefits of retirement plans, providing valuable insights for those contemplating their future.

  • Safeguards Your Life After Retirement
  • Secures You Financially During Retirement
  • Helps Build A Corpus
  • Wide Range of Annuity Options to Choose

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What is Retirement/Pension Plan?

Pension Plans, also known as General Annuity plans, are retirement savings tools that help you generate a steady post-retirement income. A pension plan is a financial product where you build a fund through regular payments or lump sum. They let you accumulate funds over a period of time, which are later converted into guaranteed post-retirement income. Before exploring the pension plans and making investments, it is essential to understand the two phases of pension plans as follows:

Phase I (Accumulation): During the accumulation phase, you regularly invest money into your pension fund. When you pay the premium regularly, it gets invested in a fund or asset of your choosing for a fixed term.

Phase II (Vesting): Once you retire and start receiving a steady income from your pension plan, you enter the vesting phase. When the vesting period arrives, you will have two options. You can either begin receiving the pension benefits or withdraw the proceeds and purchase an immediate annuity plan from the same company. The Vesting phase is also called the maturity period.

 
3 Types of Retirement Plans How They Works
Single Premium Annuity Plan You make a single lump sum investment and once you retire, you receive a regular income.
General Annuity Plan You invest money in the plan regularly for a certain period. The accumulated money is converted into a stable income. And it's paid to you periodically- during your retirement years.
Pension Accumulation Plan You pay premiums for the plan during the policy term. The accured money becomes a pension fund, which is paid to you as a lump sum when you retire.
 

Need and Importance of Retirement Plan

Delving deeper into the need and importance of retirement planning, this section emphasises the pivotal role it plays in setting long-term financial goals.

  • Increasing Retirement Years

    With average life expectancy increasing in India, it has become increasingly important to plan for a longer retirement. An average Indian lives up to the age of 75-78 years. Hence, you need to start planning in advance to maintain your lifestyle and take care of other expenses for such a long duration.

  • Unexpected Events

    Life is unpredictable, and unforeseen circumstances such as medical emergencies or job loss can impact your retirement plans. By starting early, you can build an emergency fund and have a safety net in place to handle any unexpected expenses.

  • Medical Inflation

    A major worry with increasing age is unforeseen medical expenses. Rising medical costs can be difficult to manage unless you plan for them in advance.

  • Financial Independence Post Retirement

    You would like to live your life on your own terms after your retirement. However, maximum individuals above the age of 60 depend majorly on their childrens for their daily expenses. This shows how important it is to plan for your retirement and ensure your financial independence.

  • Peace of Mind

    It ensures financial independence, capitalises on compounding, allows manageable contributions over a period of time. These plans helps initiate planning today for a worry-free tomorrow, thus bringing peace of mind

  • Flexibility and Options

    Early retirement planning provides more flexibility in choosing investment options . It gives advantage to long-term investment, which generally offers higher returns over time.

Our Preferred Plan

Finding the best motor insurance for two-wheeler insurance can be a very stressful for any individual as there are many plans available in the market from various motor insurance companies. To make it easier for you, we BimaSure have compiled the list of best two-wheeler insurance plans along with its key features in the table below:

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Two-Wheeler Insurance

Coverage Benefits

    • Advantage with Acko
    • 2.8 crore+ customer insured
    • 94.54% Claim Settlement Ratio*
    • 24*7 customer support
    • Digitally enabled processes
      • Premium starting at just ₹457*
      • Coverage for Own Damage and Third party Available
      • Personal Accident (PA) Cover Available up to Rs.15 lakhs
      • No Claim Bonus up to 50%
      • Instant claim settlements (within 2 hours) for minor damages
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Two-Wheeler Insurance

Coverage Benefits

    • Advantage with Acko
    • 2.8 crore+ customer insured
    • 94.54% Claim Settlement Ratio*
    • 24*7 customer support
    • Digitally enabled processes
      • Premium starting at just ₹457*
      • Coverage for Own Damage and Third party Available
      • Personal Accident (PA) Cover Available up to Rs.15 lakhs
      • No Claim Bonus up to 50%
      • Instant claim settlements (within 2 hours) for minor damages
Icon

Two-Wheeler Insurance

Coverage Benefits

    • Advantage with Acko
    • 2.8 crore+ customer insured
    • 94.54% Claim Settlement Ratio*
    • 24*7 customer support
    • Digitally enabled processes
      • Premium starting at just ₹457*
      • Coverage for Own Damage and Third party Available
      • Personal Accident (PA) Cover Available up to Rs.15 lakhs
      • No Claim Bonus up to 50%
      • Instant claim settlements (within 2 hours) for minor damages
Icon

Two-Wheeler Insurance

Coverage Benefits

    • Advantage with Acko
    • 2.8 crore+ customer insured
    • 94.54% Claim Settlement Ratio*
    • 24*7 customer support
    • Digitally enabled processes
      • Premium starting at just ₹457*
      • Coverage for Own Damage and Third party Available
      • Personal Accident (PA) Cover Available up to Rs.15 lakhs
      • No Claim Bonus up to 50%
      • Instant claim settlements (within 2 hours) for minor damages

Different Time Periods You Should Know About in Insurance

1. Premium Payment Term (PPT): It is term for payment of premiums and it depends on the plan chosen.

2. Free Look Period: The free look period in life insurance is usually 15 to 30 days from the date of delivery of policy document, depending on the channel through which you have purchased the policy.

3. Grace Period: The insurance grace period is 15-30 days for policies basis the premium payment options like monthly, quarterly , yearly.

4. Revival Period: A revival period refers to the time band allowed by the insurance company to recover a lapsed policy starting from the due date of the first unpaid premium. Typically, this period ranges between 2-5 years and varies across insurers.

5. Deferment Period: The deferment period is the period after which your annuity payouts are made in a deferred annuity plan. The period ranges from 1 year to 15 years.

6. Income Benefit Period: The income benefit period is a feature that offers income benefits. This includes savings plans that offer income payouts as well as retirement plans that offer annuity benefits, the income benefit period of 10, 15 or 20 years basis the plan opted.

Frequently Asked Questions

As the need for insurance increases, doubts and queries also increase. Navigating insurance complexities can be overwhelming. To help you with this, We have tried to address common doubts for a seamless journey with Bimafinserv;

How does a retirement plan work?

Retirement plans involve making premiums for a pre-decided period, and the accumulated fund is received after the plan matures. Options include withdrawing the entire amount, purchasing an annuity plan, or making partial withdrawals.

When should I start planning for retirement?

It is advisable to start retirement planning around 10 to 15 years before the intended retirement age to accumulate sufficient funds for a secure post-retirement life.

What are the tax benefits of a retirement plan?

Retirement plans offer tax benefits under sections 80C, 80CCC, and 80CCD of the Income Tax Act, providing deductions on contributions and exemptions on interest withdrawal.

Can I surrender my retirement plan?

Surrendering a retirement plan may incur cancellation fees, and specific conditions apply. Early surrender may require purchasing a deferred or immediate annuity plan.

What happens if I surrender the plan after 5 years?

Surrendering the plan after 5 years may still allow for interest payments. The policyholder may continue to receive the accumulated interest even after surrendering the plan.

How often should I update my retirement plan?

Regular monitoring and updates are recommended to ensure the retirement plan aligns with changing expenses and financial goals. Adjustments should be made as needed for optimal benefits. is rooted in the desire for a secure and comfortable post-retirement life. Whether envisioning serene moments with loved ones or aiming for financial independence, a retirement plan serves as a reliable tool to achieve these goals. This section delves into the motivations behind purchasing a retirement plan and the long-term advantages it offers.