The word ‘pension plans’ would create a sort of
consciousness to all 30 plus year old employees sooner or later in their lives.
In fact, it is one of the serious concerns to governments especially when it
works in the direction of offering a financially protected life to its senior
citizens.
Pension plan in India can be broadly categorized into plans
under private sectors and government sector. Plans bought by individuals from
insurance companies in India are gaining importance with an enhancement in
quality of standard of living and rates.
Today, there are various insurance service providers that
offer retirement and pension plans with good returns, competitive benefits and
services. These plans are completely different from term insurance policies,
which are purchased to cover risk in case of a sudden death of a breadwinner.
- Terms involved in Pension plans
Participatory Policy
The plan which offers separate specified returns as a part
of the profits gained on investment using premiums paid to the insurer.
Vesting Date
It is a date when the policyholder begins getting income in
the pension form from his insurance provider.
Death Benefit
The money which is earned as a benefit on the policyholder’s
demise is called as death benefit.
Surrender Benefit
It is the sum earned when the insured withdraws the plan
during the premium payment period. There is a specific certain period after
which the plan can be surrendered.
Generally, old age pension plans offered by retirement
insurance company in India are preferred by self-employed and people who
already have other backup for the retired life. In India, majority of people
are benefited through tax benefits which are possible because of these
policies.
These insurance products are designed
to give a rough idea of how the future expenses can be managed. Policyholders
can avail a wide range of pension plan benefits and enjoy their financially
protected lives.
Insured person can get tax benefit under section 80C of
Income Tax Act and the deduction of taxable amount is a benefit to the
policyholder. These plans provide individuals a regular income in their golden
years by helping individuals build a retirement corpus.
[Source: http://blog.policyboss.com/pension-plans/overview-pension-plans-india/]
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