The period after retirement is considered a cherishable time in any individual’s life. We work hard throughout our lives, burn the midnight oil, keep curtailing our expenses and adding to our savings to ensure that we have sufficient funds for our post-retirement life. Therefore, having an adequate retirement plan in place from an early stage in our lives is of critical significance.
A retirement plan comprises a detailed description of your expected financial obligations and income after retirement and how you wish to bridge the gap between the two. In this context, there are several retirement plans you can choose from, including an annuity policy and a retirement pension plan.
What is an annuity policy?
An annuity policy is an agreement between an insurance provider and a policyholder wherein the former agrees to provide a regular stream of income to the latter in exchange for a payment that can be either in the form of a lump sum or instalments. Therefore, an annuity scheme enables you to set aside a lump sum payment or consistent proportions of your income to secure a steady flow of income after a certain period.
- Visit the Tata AIA website and select the life insurance plan you wish to purchase.
- Click on the 'Buy online' option on the selected product page.
- On the subsequent page, enter the relevant personal particulars, including your name, email address, and contact number.
- Enter the details prompted on the screen and proceed with the purchase.
Here is how annuity plans can help you secure your post-retirement income
Choosing an adequate annuity scheme is a prudent decision since it enables you to plan for your retirement in a systematic manner. With a wide variety of options and the flexibility of payouts available, annuity plans can be customised to cater to your specific requirements as well as your financial budget.
Here are some of the benefits of an annuity policy that can prove to be essential components of your retirement plan.
- Systematic and consistent savings
An annuity policy allows you to make small savings count towards the attainment of a big goal. If you want to build a substantial corpus for your post-retirement years, you can choose an annuity plan that has the option of monthly, quarterly, or annual payouts. Therefore, you can save a part of your income and park it in an annuity plan so that you have no dearth of adequate income after you retire.
Purchasing an annuity plan encourages financial discipline and prudence and enables you to manage your finances with one eye on the future. Additionally, if you have spare funds, you can choose an annuity scheme with a lump-sum payout and make efficient utilisation of the funds whilst securing your post-retirement future.
- No upper ceiling on the annuity amount
A majority of annuity policies do not have any upper ceiling attached to them, that is, you can purchase an annuity for the amount of your choosing. There are, however, minimum limits as to the purchase of an annuity. Since most annuity plans allow entry well into a person’s eighties, you can definitely purchase one after your retirement.
- Flexibility to choose annuity options
You can choose your annuity options, ranging from immediate annuities to deferred ones, thereby allowing you the flexibility to plan your finances
Having the flexibility to select the type of annuity that is in alignment with your financial goals and needs is one of the most beneficial aspects of an annuity plan. You can choose an annuity based on your retirement plan, financial situation, and emergency expenses if any. Therefore, an annuity plan can help you manage your financial situation as well as make preparations for your post-retirement income.
- The option to select the mode of payouts
It is important to note that most annuity policies offer you the flexibility to choose the mode and frequency of the annuity payouts. The payouts can be either in the form of a lump-sum payment or as monthly, quarterly, half-yearly, or annual instalments. At Tata AIA, we understand your financial constraints and are committed to fulfilling our promise of ‘Rakshakaran’. Therefore, with our Smart Annuity plan, you get to choose the mode of payouts as per your financial goals.
With the option to choose from a single premium payment and multiple instalments, our annuity plans provide you ample flexibility and ease of payment.
- Flexibility to top-up your annuity
It is possible to enhance the amount of your annuity payout after the purchase of said plan. You can top-up your annuity pay-out at a later stage and increase the premium payment. However, the enhanced annuity payout shall be determined on the basis of the annuity rates prevailing at the time of the top-up. Furthermore, your age at the time of exercising the option of annuity top-up will also have a bearing on the amount of the top-up.
An annuity policy is an excellent tool to make adequate plans for your retirement. With flexible payout options, the facility to top-up said payouts, and the flexibility to receive the annuity inflows as per your financial needs, an annuity scheme is an inclusive and customisable retirement plan.