What are the pension plan options by insurers in India?
Prashant Maheshwari, Lucknow
There are two kinds of pension plans offered by insurers—immediate annuity plans and deferred annuity plans. In case of immediate annuity plans, the annuity/pension commences within one year of having paid the premium (usually a one-time premium). The premium paid for the immediate annuity policy is also known as the purchase price. In case of deferred annuity, the annuity/pension does not commence immediately; it is ‘deferred’ up to a time decided by the policyholder. For example, if an individual buys a pension plan with a tenure of 30 years (also known as the ‘deferment period’), then his annuity will begin 30 years hence. For deferred annuity, you can pay either a ‘single premium’, or regular premiums. At present, most pension plans available are deferred annuity plans.
