What is the importance and benefits of Pension Plans in India

All of us like to live in the present but the fact is that we have to do proper planning for important milestones that come up in life. Some examples of milestones are securing the first job, experiencing parenthood for the first time, and living a peaceful life after retirement. Pension plans or Retirement plans in India can fuel to realize those dreams.

For maintaining a good lifestyle after retirement, it is important to invest in schemes (or plans) that yield returns even after you have retired. This is where a Retirement Plan (or Pension Plan) can come handy, as this particular life insurance plan is designed in a manner that you can meet the post-retirement needs via returns from the plan.

Working professionals should also invest in Pension plans in India, as it will help them once they retire. This valuable investment will go a long way in meeting your post-retirement needs like medical expenses, living expenses, and more.

The Retirement calculator can be used for zeroing on the premium and plan that you should choose in the ‘Pension Plan’ category. We take a look at some of the major benefits of retirement (or pension) plans in India:

1. Post-retirement, you are still self-sufficient in meeting your expenses and need not have financial dependence on any member of the family.
2. The dependents of your family will receive a timely pension for the rest of your life. This is a good way to provide financial support to them, even after you have retired.
3. Like other forms of life insurance, a lump-sum amount is offered to the children (or the nominee) in a scenario where the policyholder has passed away. This will help them stay financially secure even in your absence.

For instance Retirement plans by ICICI Prudential Life Insurance provide benefits of compounding and keep you (and your dependents) protected from rising inflation.

The insurance provider offers pension plans like Immediate Annuity, Deferred Annuity, Annuity Certain, Life Annuity, and National Pension Scheme. Each of these plans offers varied benefits (i.e. pensions) and follows different series of payments.

1. Investing in pension plans can be done through private (and public) sector banks and commercial pension plan policyholders.
2. When you invest in retirement plans in India, the premium being paid offers tax benefits up to Rs. 1.5 Lakhs under section 80(C).

In case you require to give up the Pension Plan due to some immediate requirement, you can surrender the policy (or plan) to the insurance provider and receive the ‘Surrender Value’ (i.e. the amount you receive if you surrender the plan before its due date).

The benefits offered by pension plans do not cease after the death of the policyholder. Your family members (or nominee) will get a timely pension which will help them fulfill their dreams.

To meet your post-retirement goals, my suggestion to you would be to invest in a pension plan like ICICI Pru Easy Retirement (Unit Linked Pension Plan) that provides timely pension which helps in leading a comfortable post-retirement life.

To conclude, a pension plan or retirement plan is the best financial vehicle to meet your retirement planning goals through the generation of regular income (or pension) post-retirement.