Retirement planning is one of the crucial things that we all Indians have. Savings and investment become an integral part in order to sustain the lifestyle. Inflation rate always goes high, and there needs to be a provision to tackle the rising costs. Besides, many other events occur that require a bunch of money anytime, such as children’s education, their marriages, medical emergencies, and so on.
Retirement is the phase where you understand the value of the money. It is the period when you realise that the cash inflows are about to be terminated from the employment, and you need some financial source for the second innings.
However, cash inflow is not the only concern; life insurance is another requirement which has become a necessity nowadays. Insurance companies understand both your requirements and cater to you a comprehensive insured retirement plan. People usually hesitate to get retirement plans as there are many misconceptions. But, getting one is very helpful as it comes with the following set of features.
Guaranteed Income after Retirement
Insured retirement plans allow you get guaranteed income either immediately once the plan is in force, or after retirement is you select the deferred plan. This provision secures your finances and keeps you independent even post-retirement.
Cash Liquidity
Insured retirement plans also provide you with an advantage of liquidating the money which you have invested in the plan even during the accretion stage. This makes sure that you get financial backup in case of any emergency without opting for loans.
Vesting Age
The age from which the monthly pension is offered; usually, companies start it from the age of 50, and benefits can be availed up to the age of 70 years. However, the vesting age may differ from company to company.
Accretion and Payment Duration
Early the investments in insured retirement plans are made, better the pension you get from it. In case if you start investing in the plan at the age of 40 and continue it till the age of 60, the accretion period is 20 years. If you choose the maturity as 75 years of your age, the payment duration is 15 years, right after when the accretion period gets over.
Tax Benefits
You can avail tax benefits on the premium paid towards insured retirement plan under section 80C of the Income Tax Act of India.
In short, insured retirement plans are always helpful when it comes to retirement planning and pension requirements.