Have you thought about saving funds for your retirement years? When you have been working hard for so many years to earn money for you and your family, you should also consider keeping funds separately for your retirement years. Once you retire, you may not earn money on a regular basis like before. You will not be employed and hence, you may struggle to meet necessary needs due to lack of a steady income. This is why you should plan your post-retirement period very carefully.
Life insurance companies offer great insurance plans for specific purposes. Most of these insurance providers design specific plans for post-retirement periods. One of these plans includes life insurance annuity plans. These plans will provide a retired individual with regular income over fixed periods. You can choose your income receipt frequency according to your preferences.
Meaning of annuity plan
An annuity insurance plan will give you an income on a frequent basis once you retire from your work. You can start paying your premiums for this plan before you retire so that you can enjoy the benefits in the several years to come. The income that is paid by this plan by the company is known as an annuity. You can pay your premiums in fixed installments or through a single premium payment mode.
Benefits of annuity insurance plans
Let us take a look at the key advantages of taking an annuity plan:
- Under an annuity plan, you can choose your annuity payment frequency. It can be annual, half-yearly, quarterly, or monthly.
- An annuity plan will provide you with excellent financial security for your whole life.
With an annuity plan, you will not be required to ask your children or relatives for financial support. You can be financially independent even after you retire from your job.
You can attain your dreams that you had not yet achieved yet due to your busy work schedule.
You can have a relaxed and leisurely lifestyle after you retire from work with the help of an annuity plan.
You will earn outstanding returns when you invest in annuity plans.
Kinds of annuity insurance plans
There are 2 kinds of annuity insurance plans:
- Individual annuity plans: These plans are given to individuals by insurance companies and the annuities offered by these plans include immediate annuity, deferred annuity, and fixed and variable annuity.
- Defined benefit pension plans: These plans are provided by the government or a certain company to its staff. The annuity offered by such plans will be determined by the age of the employee, income of the employee, and so on.
It makes sense to take an annuity retirement insurance plan as the life expectancy rate is rising highly. Also, since there is no proper social security system in India, an annuity retirement plan is very crucial. Moreover, the costs for hospitalisation, medicines, and medical treatment are increasing on a daily basis. In order to meet these costs without much difficulty, one should take an annuity insurance plan as he or she ages.