Pension Plan


Pension plans are available in the market wherein the individual can choose between the options of taking a pension plan with life insurance cover inbuilt or just take a pension plan without a life cover built into it. Pension plans are structured to take care of the financial needs of an individual after he reaches an age where he no longer wants to continue to work.


• The Accumulation / Contribution Phase

This is the phase when the individual is contributing to the policy fund to be able to build up the corpus of the policy. This commences from the date of taking of the policy and lasts upto the vesting date. In this period the insured just pays the policy premium every year according to his desired mode of payment of premium.

• The Vesting Date

This is the age at which the insured wishes to stop contributing the premium and decides to buy an annuity with the accumulated funds.

At this stage the insured has the option of switching his corpus to any insurer who manages annuities and choose the annuity plan according to his choice.

At this stage the policy holder can also commute 1/3rd of the total corpus as tax free commutation withdrawal.

• The Annuity Stage

This is the stage when the insured has purchased his annuity & gets a regular income from the annuity fund according to the plan of annuity which he has chosen.

The fund continues to earn interest even at this stage.

The fund can also be assigned in favour of the spouse till the lifetime of the spouse depending on the option of annuity chosen.


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