Savings Plans

Unlike a pure term life insurance policy whose sole purpose is to come to the financial aid of an individual's family after their demise, Endowment plans offer guaranteed benefits to the policy holder on the maturity of the term of the plan or to the nominee(s) of the policy holder in the event of her/his demise before the policy term maturity. These plans are great for the people who want to keep their funds safe and secure and want returns from it.

Benefits of Endowment policies

  • The maturity benefits are guaranteed and well defined.
  • Gives financial security to your loved ones.
  • Tax benefits under section 80 (C) under
  • Tax free Maturity benefits under Sec(10) (10) d

Some Other Features of Endowment Policies

Maturity Benefits: On Maturity, the Sum Assured and the vested bonus declared by the company in the policy is paid to the policyholder
Death Cover: On death, the nominee gets the higher of, the basic sum assured or 10 times the annual premiums and vested bonuses subject to a minimum of 105% of all premiums are paid out
Tax Benefits: Policy Holder gets income tax benefit on premiums paid under Section 80C and also on the maturity/ death claims under Section 10(10D)

Frequently Asked Questions

Once you stop paying the premiums after 2 policy years, the policy acquires a Paid Up Value for a Reduced Sum Assured.

There is a Guaranteed Surrender Value after 2 policy years

There is a Guaranteed Surrender Value after 2 policy yearThere is a provision to take loan under this policy after completion of 2 policy years. Loan amount can go upto 80% of the Surendered Value.s

Yes, a policy holder can revive a lapsed/ paid up policy by paying due premiums along with the  interest as charged by the Company. Some Companies run campaigns from time to time to waive off/reduce interest thereby assisting customers to revive their policies.  Health declaration form/ medicals can be called upon by the underwriters if lapsation period exceeds 180days.

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Retirement PLAN Tab

Retirement Plans are specially designed to meet your post-retirement needs such as medical and living expenses so that you enjoy your life after retirement. It helps you accumulate your savings for a long period to ensure a peaceful future life. A pension plan helps you to put aside part of your savings during your working tenure to create financial support post-retirement so that you can have a financially sound after retirement life when the probability of income sources drying down is high.  In a retirement plan, the insured can choose his retirement age and also the duration for which he will pay regular premiums to build the corpus. Once the insured reaches the retirement age then he starts getting regular pension for the period as chosen by him. The Corpus that was built by paying premiums during vesting age is used to generate regular income/pension/annuity post reaching the retirement age.  

These pension plans can be further divided into 3 categories

  • Traditional Pension Plans
  • Unit Link Pension Plans
  • National Pension Scheme (NPS)

Traditional Pension Plans:

These pension plans are known as traditional pension plans because the premiums you pay are invested in conservative options like government and debt securities, Comercial Papers etc. which are considered to be safe. These plans are offered by various life insurance companies. Here the returns on the money vary from low to moderate but safe. 

These type of pension plans comes with various options – a simple pension plan, a pension plan with life cover, a pension plan with immediate annuity payments and a pension plan with deferred annuity payments. 

  • The Simple pension plan invests all the money that you pay in safe financial instruments and you get a corpus at the end of the term including interest earned. In this plan, if Policy Holder does not survive the policy term, then, the nominee would receive the corpus along with interest earned until the time of his demise
  • The pension plan with life cover: uses a portion of the money paid by you to pay a premium for covering your life through a term policy for a sum assured. In this plan, the nominee would receive the sum assured in case of Policy Holder’s demise, before the end of the policy term. The nominee would also be entitled to the sum accumulated from the start of the policy till the time of demise.
  • The pension plan with immediate annuity payments: The word “immediate” itself is self-explanatory. It gives policyholder an option to start earning income from the month following the month of investment. This option is used when you have lump sum money available and you would want to use it to generate regular income for the specified number of years or for the rest of your life. This is similar to earning monthly interest income from a fixed deposit in a bank.
  • The pension plan with deferred annuity payments: Under this option, the policyholder accumulates a corpus by paying premiums during the policy term. At the end of the term, interest earned on the premiums paid becomes a sizeable corpus. This corpus is used by the policyholder to buy an annuity and earn a regular pension. Generally, this category of pension plans has a built-in life insurance cover.  

Unit Link Pension Plans:

Unit Link Pension plans are for those who have a more aggressive outlook or high-risk appetite. Unit link pension plans invest a substantial portion of the premiums in high return-high risk investments such as stocks, bonds & other non-government securities.  These plans provide opportunities for you to choose from different risk profiles – low, medium and high depending upon your risk-bearing appetite. You can switch between plans during the policy term at your discretion, subject to certain terms and conditions. Historically, investments held for the long term in stocks have given lucrative returns.  

National Pension Scheme (NPS):

NPS is a pension program implemented by the Government of India. It acts as a social security scheme aiding employees of all sectors to the age of 60 years. During this period, they can invest in the NPS and withdraw up to 60% of their corpus once they turn 60 years. The balance would be returned as a pension for life in the form of annuity payments. NPS invests  premiums collected from members in four types of asset classes – Equity, Corporate debt, Government Bonds and Alternative Investment Funds – with equity exposure limited to a maximum of 75%. The scheme offers safety by investing in relatively safer instruments. NPS also offers flexibility allowing investors to switch based on their specific needs, receiving a lump sum limited to 60% of corpus accumulated at the age of 60. 

Here’s why you should start planning for your retirement today. 

  • More Savings, More Earning: Mostly people keep thinking that the day you start earning more, you will start saving more and plan for your retirement but the fact is as soon as you start saving you start earning more.
  • Maintaining your independence: You spend your life providing and supporting your children, so they would want to extend the same financial help to you. However, being too dependent on them could mean jeopardising your own financial independence. 

 

Benefits of Retirement Plans:

  • Pension Plans provide guaranteed regular income for life. For people who dont have pensionable job, pension plans come handy. These plans help them to put portion of their savings aside to take care of their financial needs post retirment.   
  • Pension plans with life cover helps in securing your childern financially in your absence. This helps you leave behind a legacy for your children.
  • There are Tax benefits also in pension plans. The savings made in pension plans and NPS qualify for the following benefits under the Income Tax Act:
    • Premiums paid under pension plan qualify for deduction from taxable income up to ₹1,50,000 under Section 80C
    • Amount paid under NPS qualify for deduction from taxable income up to ₹1,50,000 under Section 80CCD(1)
    • Additional deduction up to ₹50,000 from taxable income is allowable under Section 80CCD(1B) for the amount paid in NPS
    • 60% of lump sum withdrawal on maturity from NPS is exempt subject to Section 10(12A)