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What is a Pension Plan?



Pension plan is a retirement investment plan that helps you get from their insurance companies on a regular basis or in the form of a lump sum amount. In other words, a pension plan helps you look after your post-pension financial needs with a guaranteed regular income so that you can lead a worry-free life.

A pension plan aims to create financial freedom for your pension years, provide you with the stability of a regular income in place of your monthly salary when you retire and need to support your family and your goals.

The pension plans are designed to ensure that your funds are not impacted heavily by the rising inflation rate. Under a pension plan, you contribute a certain amount of money regularly over the years and you receive the returns as a monthly or regular income on your retirement.

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    What is a Pension Plan?



    Pension plan is a retirement investment plan that helps you get from their insurance companies on a regular basis or in the form of a lump sum amount. In other words, a pension plan helps you look after your post-pension financial needs with a guaranteed regular income so that you can lead a worry-free life.

    A pension plan aims to create financial freedom for your pension years, provide you with the stability of a regular income in place of your monthly salary when you retire and need to support your family and your goals.

    The pension plans are designed to ensure that your funds are not impacted heavily by the rising inflation rate. Under a pension plan, you contribute a certain amount of money regularly over the years and you receive the returns as a monthly or regular income on your retirement.

    Features of a Pension Plan

    • Steady Flow of Income

      When you invest in a pension plan, you receive a regular income as per the plan of your choice. In the case of a deferred plan, you begin receiving the fixed regular income post-retirement, while in an immediate annuity, this benefit is paid out soon after you start the investment. 

    • Vesting Age

      The vesting age is the term used to denote the time from when the policyholder starts receiving their monthly pension from the pension plan. The minimum vesting age in India is 40 to 50 years, while the average vesting age is 70 years. As a policyholder of a pension plan, you can choose any appropriate vesting age between the minimum age and higher limit to start getting the benefits.

    • Accumulation Period

      Under a pension plan, you can pay monthly premiums or as a lump sum. This corpus grows over the years and turns into a healthy fund to be utilised for your pension. Depending on the pension plan, you can choose for how many years you want to keep on investing and the amount to be invested to receive a certain total amount as the pension benefit.

    • Payout Period

      The time you get your pension plan benefits is known as the payment or payout period. For example, you choose to have the benefits between the age of 65-80 years, then the payout period will be 15 years. In some pension plans, you can choose the payout/income period as per the options under the plan, while some plans allow for partial withdrawals during the accumulation period.

    How Do Pension Plans Work?

    Investing in a pension plan is to ensure that you can receive a steady, guaranteed income during your retirement years to fulfil your financial needs. This fund also acts as a safety net in case of emergencies which can cut deeply into your savings. Here is a brief outline of how pension plans work in India.

    • Choose from different types of pension plans

      You will first need to select a pension plan that suits your needs. The investment amount, the mode of the payout benefit and any guaranteed additions are some of the factors you need to consider.

    • Premium payment modes

      Start paying the premiums for the retirement plan of your choice that will contribute to the retirement corpus. To create a retirement fund, you can pay either regular premiums or a lump sum amount. Moreover, retirement plans also allow you to pay monthly, quarterly, half-yearly and annual premiums, whatever is more convenient for you.

    • Returns from the retirement investment plan

      These premiums paid towards the retirement pension plan are then invested in low-risk and fixed-income securities. The returns of which are paid out to the policyholder on retirement along with the guaranteed income. While these premiums are eligible for tax deductions# of up to ₹1.5 Lakh under Section 80C of the Income Tax Act, the withdrawals or the payouts do not qualify for tax benefits.

    • Liquidity in Retirement plans

      At the end of the policy term, you can opt for withdrawing the entire benefit or purchasing an annuity plan. Some annuity plans also offer a return on the purchase price. This means the benefits of your pension plan will also include the purchase price which was paid for the annuity plan.

    Why do You Need Pension Plans?

    • Money Wallet Image
      Pension plans help you lead a worry-free life

      Pension plans provide you with enough finances so that you can easily manage routine expenses, lead a comfortable lifestyle and enjoy the golden period of your life after retirement.

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      Ensure financial independence

      Pension plans help you live with freedom and pride as you no longer need to ask your children/ relatives for financial support to lead a fulfilling life.

    • With suitable rider, avail of term insurance with critical illness cover - Why Choose Tata AIA Life Insurance Sampoorna Raksha Supreme?
      Take care of medical emergencies

      Older people are more prone to health complications. The pension plans provide you with much-needed support during medical emergencies amid rising medical costs.

    • Plan provides death and survival benefit - Why Choose Tata AIA Life Insurance Sampoorna Raksha Supreme?
      Provide guaranteed income

      There are pension plans that offer guaranteed returns, along with annuity options - immediate and deferred annuity plans.

    • Build good returns from compounding

      Investing in pension plans has the compounding benefit, which subsequently helps in accumulating healthy returns at the end of the policy term.

    • Offer tax benefits

      Savings in pension plans qualify for a tax deduction benefit under Section 80C and a tax# exemption benefit under Section 10(10D).

    • Protects your dependent family

      Pension plans secure your family's financial future in the event of your unexpected demise along with saving a good fund for post-retirement years.

    • Enhance protection with optional riders^^

      You can also benefit from the add-on riders options which provide covers against critical illness, unexpected hospitalization and medical expenses, etc.

    Why Buy a Pension Plan from Tata AIA Life Insurance?

    Here are a few reasons why you should select a pension plan from Tata AIA Life Insurance:

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      Life Insurance Coverage

      When you buy a pension plan from Tata AIA Life Insurance, you can avail of a life insurance cover along with the retirement savings. This not only helps you build a secure financial future but also protects it along with your family members.

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      Regular Income

      If you buy a retirement pension plan from us, you can enjoy regular income under the retirement plan you choose. A regular income can help you take care of all your essential and daily expenses without having to touch your savings.

    • With suitable rider, avail of term insurance with critical illness cover - Why Choose Tata AIA Life Insurance Sampoorna Raksha Supreme?
      99.01%

      Individual Death Claim Settlement Ratio1 for FY 22-23

    • Plan provides death and survival benefit - Why Choose Tata AIA Life Insurance Sampoorna Raksha Supreme?
      Choice of Annuity

      We offer you the choice of having a deferred annuity plan or an immediate annuity plan, as per your convenience, so that you can invest in the pension plan as per your budget and receive your benefits as per your needs.

    • Flexible Plan Options

      With our pension plans, you can choose how you want to pay your premiums, increase your monthly income through a premium boost, add riders^^ to the plan to enhance the coverage and much more!

    • The Tata AIA Assurance

      We provide tailor made solutions to secure the golden years of your life. Our retirement plans can be customized to secure your future, fulfil your dreams, and to live a worry-free life after you have retired.

    Popular Pension Plans from Tata AIA Life Insurance

    Disclaimer

    • Tata AIA Fortune Guarantee Pension Plan A Non-linked, Non-participating, Annuity Plan (UIN: 110N161V08) Immediate Life Annuity, Immediate Life Annuity with Return of Purchase Price, Deferred Life Annuity (GA-I) and with Return of Purchase Price, Deferred Life Annuity (GA-II) and with Return of Purchase Price are list of Annuity options available.
    • This product is underwritten by Tata AIA Life Insurance Company Ltd. The plan is not a guaranteed issuance plan and it will be subject to company’s underwriting and acceptance. Insurance cover is available under this product. For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
    • #Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfillment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implication mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you
    • 1Individual Death Claim Settlement Ratio is 99.01% for FY 2022 - 23 as per the latest annual audited figures.
    • For more details on risk factors, terms and conditions please read Sales Brochure carefully before concluding a sale.
    • Product Option Immediate Life Annuity with Return of Purchase Price is available under PoS as well. 
    • ^^Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch.
    • *Guaranteed Additions accrue at the end of each completed policy month, subject to all due premiums being paid and form a part of the Death Benefit offered under the option.
    • $The word Guaranteed and Guarantee means the annuity payout is fixed at inception of the policy and will be payable for whole of life or till death of the Annuitant(s).
    • **Applicable for specific plan options. Please refer brochure for additional details.
    • +The Death Benefit Amount illustrated is the minimum Death Benefit provided all premiums due throughout the Premium Payment term (PPT) have been paid.
    • 2Above illustration is for Single Life/Limited Pay, Deferred Life Annuity (GA - II) with ROP, for 45 Male, Standard Life, with Purchase Price of Rs 8830 per month (excl taxes) payable for 12 years with deferrment period of 17 years
    • 3Above illustration is for Single Life/Limited Pay, Deferred Life Annuity (GA - I) with ROP, for 45 Male, Standard Life, with Purchase Price of Rs 8830 per month (excl taxes) payable for 12 years with deferrment period of 17 years
    • 4Above illustration is for Single Life, Immediate Life long Annuity with ROP, for 45 Male, Single Life, with Purchase Price of 10 Lakh.
    • 5Above illustration is for Single Life, Immediate Life long Annuity, for 45 Male and 45 Female, Joint Life and with Purchase Price of 10 Lakh.
    • ~~All Premiums are subject to applicable taxes, cesses & levies which will be entirely borne/ paid by the Policyholder, in addition to the payment of such Premium. Tata AIA Life shall have the right to claim, deduct, adjust, recover the amount of any applicable tax or imposition, levied by any statutory or administrative body, from the benefits payable under the Policy. Kindly refer the sales illustration for the exact premium.
    • ++Annuity Rate is calculated as Annual Annuity Amount/ Total premiums payable during PPT.
    • L&C/Advt/2023/Oct/3627

    Tata AIA Life Insurance Company Ltd. (IRDA Regn. No. 110 ·CIN:U66010MH2000PLC128403. Registered & Corporate Office: 14th Floor, Tower A, Peninsula Business Park, Senapati Bapat Marg, Lower Parel, Mumbai 400013. Trade logo displayed above belongs to Tata Sons Ltd and AIA Group Ltd. and is used by Tata AIA Life Insurance Company Ltd under a license. For any information including cancellation, claims and complaints, please contact our Insurance Advisor/Intermediary or visit Tata AIA Life's nearest branch office or call 1-860-266-9966 or write to us at customercare@tataaia.com. Visit us at www.tataaia.com

     

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