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Retirement and pension plans help you accumulate funds to secure your golden years post-retirement. After all, your retirement years are a new phase of your ... life and we at Tata AIA want you to make the best of it. Read on to retire like a boss with Tata AIA’s pension plans!
Pension Calculator
Pension Calculator
Retirement or pension plans are retirement investment plans that help you create a financial fund for your retirement years. They aim to provide you with the stability of a monthly salary by offering regular payments or a lumpsum amount when you retire and need to support your family and your goals.
Non-Participating, Unit Linked, Individual Life Insurance Pension Plan
(UIN: 110L182V01)
Tata AIA
A Non-Linked, Non-Participating, Annuity Plan
(UIN: 110N161V10) | 3T&C apply
Inflation rates have caused living expenses to rise dramatically over the years. This means you need to account for future living expenses while accumulating a large enough savings fund to tide you over your retirement years.
Here are some reasons why a retirement pension plan could be the perfect solution to living a stress-free lifestyle in your golden years:
It is a disciplined, affordable, and secure method of retirement planning that can be started at any time.You are offered a guaranteed3 income after retirement to cater to your financial needs.You can secure your family members in the form of a death benefit along with your retirement savings.You can choose between investing in a market-linked pension plan or a conventional pension plan, depending on your investor profile.
Retirement pension plans in India comprise two main phases: Accumulation and Distribution
This phase begins once the policy term commences. Here, you must make regular premium payments or a lump sum payment, which will be invested into a fund for a set period - usually the policy's term. With Tata AIA pension plans, the payments can be a one-time lump sum payment or regular/limited payments equal to the policy term. These are paid to your account to accumulate interest over time.
Also known as the vesting phase. This phase commences once your policy matures. You have two choices when you reach this phase: Start receiving your pension payouts or withdraw your earnings and buy an annuity plan.
The annuity plan must be bought from the same insurer you bought your pension policy from. Moreover, the minimum vesting age in India is 30 - 40 years, while the maximum vesting age is 80 years. As a policyholder, you can choose any appropriate vesting age between the minimum age and higher limit to start getting the benefits.
Some of Tata AIA's pension plans also allow you to increase your annuity through top-up premiums. Namely the Tata AIA Fortune Guarantee Pension.
Let us take a closer look at the types of pension plans in India:
These are pension plans that come with a life insurance cover. The insured retiree is guaranteed a pension income for the entirety of their lives post-retirement, and upon death, their family members get a death benefit payout.
These pension plans do not offer a death benefit on the insured retiree's passing but will provide a pension income for their lifespan.
You can accumulate a corpus through single or regular premiums. Under this plan, you will start receiving annuity with or without return of premium.
You can start receiving your regular pension income immediately after making your lump sum investment under this annuity plan. This type of plan can be paired with retirement plans that offer a lump sum benefit on maturity, like the NPS scheme.
These plans offer annuity payments for a guaranteed fixed term – usually for 5, 10, 15 or 20 years, regardless of whether the insured retiree survives the policy term. If the insured retiree dies during the guaranteed term, the remaining payments will be paid to their policy nominee or family members as regular payments or a lump sum..
As the name suggests, it provides annuity payment to the insured retiree for the entirety of their life span. If you choose the 'With Spouse' option under this pension plan, the annuity amount will be transferred to your spouse upon death.
The money stays invested for the insured's whole life into assets/funds they chose, i.e., debt or equity-linked plans. These plans offer a death benefit, a maturity benefit, and a survival benefit if the insured retiree lives beyond a certain age limit.
This is usually an employer-based pension plan that guarantees a specific amount as your pension income for the entirety of your life after retirement.
In the event of your passing, your family gets a lump sum. This amount is a multiple of your salary, paid tax-free if you die before your 75th birthday. Otherwise (death after 75 years), it is taxed as income. Some plans may also pay a refund of the premiums paid if the insured person dies before they begin to get their pension payments.
Tata AIA offers immediate and deferred annuity plans. You can make Single or regular payments under the policy and upon retirement, the annuity plan will offer annuity amount as per the mode chosen.
These are low-risk retirement plans that offer guaranteed3 returns under three different options – lump sum (endowment), regular income, and whole life income. Since the returns are not market-linked, you get an assured amount on retirement.
Here are some prominent features of retirement pension policies from Tata AIA:
When you invest in a retirement pension plan, you receive a regular income as per the plan of your choice.
For example, in the case of a deferred annuity plan, you begin receiving the fixed, regular income at a later date (post deferment period), while in an immediate annuity, this benefit is paid out soon after you start the investment. A retirement calculator can be a useful tool to help you calculate this amount.
Pension plans in India are eligible for tax4 deductions under applicable tax laws. This specific tax deduction will depend on the type of retirement pension policy you choose.
Most plans offer tax deductions on your annual premium payments, allowing you to reduce your taxable income in the year you make contributions. Under some plans, your investments are tax-exempt, allowing them to grow without immediate tax consequences. Moreover, death benefits received from a pension policy due to the insured person's death are tax-exempt.
The time during which you get the benefits of your pension plan is known as the payment or payout period. If you choose to receive payments between the ages of 65 - 80, the payout period will be 15 years.
In some pension plans in India, you can choose the payout/income period as per the options under the plan. At Tata AIA, you can opt for a Life Annuity under our plans, where you will receive payments for as long as you live.
Tata AIA pension plans allow annuitants to get a loan against their policy. The terms under which you can get avail loans are subject to policy conditions. For example, under a Joint Life option in our Fortune Guarantee Pension Plan, the primary annuitant can take a loan six months from the commencement date. If the primary annuitant dies, it can be availed by the secondary annuitant.
As stated, upon policy maturity, you can opt to withdraw the pension plan benefit or purchase 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.
This is an amount the insurance company will pay you if you ever decide to "surrender" or discontinue your plan before it reaches maturity. In simple terms, you can choose to cash out your pension policy.
This amount will be stated in your policy wording and available only if you have held your pension plan for a minimum number of years. Remember to check your policy terms before purchase to ensure you get properly compensated if you want to discontinue your policy.
Under your retirement pension plan, you will begin receiving guaranteed3 income benefits from the distribution phase. This means You do not need to worry about any delays in getting a regular income stream once you retire.
In case of your untimely demise, any applicable death benefit under your pension policy will be paid out to your family. In the case of a Joint Life annuity plan, the second annuitant continues to receive the annuity after the death of the first annuitant.
Most pension plans in India offer flexible premium payment modes and terms you can opt for under your policy. This way, you can pay when you can at your desired frequency. Tata AIA pension plans offer Single/Regular/Limited payment modes.
Once you retire, your pension policy steps in to help you afford daily expenses in place of your salary. These pension payouts can be received as a lump or monthly income to ensure your savings last throughout your retirement.
The best retirement plans in India offer several different tax deductions and exemptions depending on the type of pension policy you buy. This means Tata AIA pension plans are also eligible for tax4 benefits under applicable tax laws.
Though your retirement plan should be able to suffice for all kinds of emergencies, you can still enhance your policy coverage with optional rider benefits. Keep in mind that any additional top-ups or add-on riders will require additional premium payments under your policy.
As a general rule, you should be saving at least 15-20% of your income for retirement. When saving for retirement, you should consider a tentative figure that will account for all essential and emergency expenses for yourself and your family. While this will give you a basic idea of the total amount to be accumulated, here are some points that will give you a better understanding.
When you retire, some expenses will cease, while there may be some new ones. Your daily commute to work will stop, saving you some money; however, a minor health condition may be an added expense. Listing down all of these missing and added expenses can help you know the approximate amount needed for your retirement savings.
Along with a pension plan, if you have other funds like an EPF (Employee Provident Fund) that can provide you with some income, take those into consideration. However, since your pension plan will look after a majority of your basic and emergency expenses, this additional income is meant to help you plan your retirement plan corpus.
Just because you retire does not mean your family has to change their lifestyle to accommodate for the loss of income. Your retirement plan should be able to provide you with the same comfortable lifestyle that you enjoyed on a regular salary. Therefore, invest in your pension plan such that you’re able to provide a comfortable life to your loved ones and yourself.
Your current salary may be enough for your family, but years later, when you retire, the value of your current salary will not be the same. The inflation rate will help you calculate how much income you need to have, over and above your current income, to handle all your post-retirement expenses, any additional costs as well as any financial emergencies. We also recommend diversifying your savings across different options like EPF, PPF, NPS, and mutual funds. However, if you want more concrete estimates, use Tata AIA's retirement planning calculator.
To use the Tata AIA Life Insurance retirement planning calculator, you need to follow the steps given below:
Visit the official Tata AIA Life Insurance website and Select “Calculators”.
Go to the “Retirement Calculator” page and fill in your details correctly.
Submit the details to proceed with the next steps.
You can then select your current age, the expected retirement age, your monthly expenses, expected return on investment and other factors.
After submitting these details, you will be able to know how much funds you need for your retirement savings.
Monthly Expenses Post-Retirement
Inflation-Beating Returns
Cover Medical Emergencies
Assets and Income Sources
Research Your Options
Plan Ahead of Retirement
Assess Your Risk Tolerance
This is the most crucial step in picking a retirement plan. You can set a budget for your retirement plan policy once you have analysed your post-retirement needs and expenses, your family's requirements, and other emergency expenses. After this, you can buy a pension plan that allows you to invest the amount and receive the benefits at your convenience.
Your current income and financial status should be considered. You should be able to comfortably invest and make premium payments under your chosen retirement plan without it disrupting your current financial obligations.
However, pick a retirement corpus sufficient to cover your future expenses and your family's requirements so that you do not end up with inadequate finances once you retire.
If you have additional income from other sources, such as a business or property, you still need a pension plan for your regular expenses.
However, it is important to know that the other income sources attract taxes while your retirement plan premiums will be eligible for tax benefits4 under Section 80C of the Income Tax Act.
If you need an immediate income upon investment, an immediate annuity plan can be a good choice.
However, if you are planning in advance, you can choose a deferred annuity plan where you can pay the premiums over the policy term and then receive the benefits during the vesting period.
Once you have set up a budget and evaluated all your income sources and financial obligations, you will now have an estimate of how large you need your retirement corpus to be.
The next step is to browse through our catalogue and see which retirement plans best suit your financial requirements. Ensure you check the investment amount, guaranteed3 payouts, other returns and if the plan has any loan facilities.
All of this information will be available on the policy brochure and policy wordings, so remember to check them as well.
Here are some of the important benefits of purchasing a pension plan online:
When you buy a pension plan online, you can easily compare the plans alongside and look through the features, benefits and exclusions of all the plans before you choose a suitable one and purchase it.
The online purchasing process is quick and easy, which means you can get your policy in a matter of minutes. And since there are no overhead costs of an online purchase, you can benefit from discounts when you buy the policy online.
Since the policy document is online, there is no chance of you misplacing the policy like you can lose the hard copy. If you do happen to lose the hard copy, you can easily access the online soft copy or even save it on your device.
Your insurance provider’s customer service can offer you 24/7 support for your feedback and queries when you buy online. You can reach out to them or leave them a query, and they can resolve it in a few minutes for a swifter process.
Buying online means that you do not need to use any papers for your policy document. This not only saves you from a lot of physical clutter but ensures a green and environment-friendly process for everyone.
Before you buy a policy online, the necessary research such as knowing your insurance provider’s claim settlement ratio, reading their reviews and knowing their products can be done quickly and easily online.
This short answer is – Everyone. Anyone who wants to maintain their standard of living and enjoy a steady income once they retire should consider getting a Tata AIA pension plan. Here are some age-wise recommendations:
The earlier you start, the more you save. While your 20s may seem too early to start thinking of retirement, you can easily build up a huge retirement corpus if you start saving now.
For those in their 30s who want to secure their family's financial future, investing in a pension plan can ensure their living expenses are taken care of during retirement. Even if you are unmarried or do not have any dependents planning for retirement in your 30s is still good idea as it allows you to build a larger corpus.
Depending on your investor profile, you can take on any type of retirement pension policy that meets your future requirements and allow you to maintain your current standard of living.
40s is when most people begin to think of retirement. You may also still have some major expenses or financial obligations that must be considered at this stage. We recommend getting a guaranteed benefit plan or a more conservative pension plan that invests in more risk-averse funds and assets.
The best retirement plans in India can be purchased until age 70. At this stage, you will have most likely accomplished your financial goals and not have any significant financial obligations.
Even if your children have achieved financial independence, you can still opt for a pension plan to ensure you leave behind a financial legacy for you family members. You can invest a lump sum into an immediate annuity plan for immediate pension payments or even a deferred annuity plan if you are still an employee. Moreover, look into pension plans that specifically offer death benefits.
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