What is Retirement Insurance Plan?
In the time of high inflation and high cost of living, Retirement Insurance Plan provides you financial security when your regular professional salary income starts to diminish. Retirement insurance plans are the combination of insurance and investment. In the first stage, when you pay premium, this money is gathered by the company and in the second stage this gathered money is invested in the securities. In this way it protects your hard earned money and also gives higher return in the future.
You could divide the Retirement insurance plan’s whole period into three stages:
- Accumulation Stage: In this stage your premium is gathered.
- Investment Stage: In this stage money is invested in securities selected by IRDA, insurance regulatory authority in India.
- Annuity Stage: In this stage you get payment of pension. It depends on the selected vesting age at which you choose to starts receiving pension .Insurance Company gives you the flexibility to choose the retirement date also.
In these plans you would to select whether you want to take the sum assured in one time or want to receive it monthly, quarterly, half-yearly or annually basis.
Retirement plans could be divided into two Categories i.e.
- Unit linked Insurance Plans (ULIPs): All products available under this category are single premium plans in which you require to pay premium once at the beginning.
- Traditional Retirement Plans: It is less risky and you have to pay the premium for a specific period of time
Why to Take Retirement Insurance?(Retirement Insurance Benefits)
- It gives financial independence after the retirement and you do not require to depend on others for your requirements
- To maintain the same life style after retirement also.
- To maintain the increased medical expenses
- To cover the inflation.
- Tax benefits under Section 80 CCC and Section 10 (10A) of the Income Tax Act, 1961.