Pension Schemes | How much pension do we get?

In olden days in order to receive a pension, one has to attain the age of either 58 or 60 years.  Even as of now, also the procedure is same in the ways of traditional, Savings and income.  In present days there are lot many Insurance companies who are giving the pensions at the age of 40.  These schemes are a lot in number.

Two types

Mainly we can classify these pension plans into two.  One is Differed Unity Plan and the second one is Immediate Unity Plan.  Among those two pension plans most of the people prefers to take Differed Unity Plan only.  In these pension plans, the investor will not get the pension immediately as and when the customer invested.  The customer has to decide the period and investment amount until the completion of that period. The pensions will starts coming after the decided tenure is completed.  In the second plan that is called immediate unity plan the pension comes from the time of investment only.  We can say that the second plan is Single Premium Pension Plan.   Along with Jeevan Akshay which is offered by LIC, other Insurance companies like SBI, TATA AIG, Bajaj Allianz, and ICICI Prudential are offering these Pension Plans.

How it works

The investor has to attain the minimum age of 40 years in order to invest in the Immediate Annuity Plan which are offered by many companies which means that customer who invested in this plan can start getting the pension when they are 40 years of age.  The customers who are below 40 years of age can invest their amount in the Differed Annuity plan till they reached to 40 years of age and then they convert that amount to Immediate Annuity Plan to get the pension immediately.  The amount of pension that is received depends on the various parameters like the value of the amount that is invested, term of pension, whether the pension is only for the sole or for the family members next to investor.  In general these schemes are offering six kinds of pension facilities and one can choose any of the plan and on the other hand they can also choose whether to get the pension monthly or for every three months or six months or an year.

How much pension do we get?

In present, many annuity plans are offering 7 – 9 percent of interest rates which means the interest which is calculated on the total invested amount is given as pension every month.  In case if the investor has chosen the life coverage or life partner pension or return of purchase like options the pension that is taken by hand is only around 3 – 5 percent.

Everything is Taxable income

The Annuity plans which are taken in the form of pensions are recognized as taxable income which means the pension which is taken every month is included in the income and has to pay the tax according to the personal income tax slab.

Lifelong more pensions

The investor who has chosen this option will get lifelong pension.  But after the death of the investor there is no facility of giving the pension to the nominees or the family members.  This is called as Life Annuity without return of purchase price option.  Among all the six kinds of options that are available, this is the most profitable option where the pension by hand will be more when compared to other five options.  The people who think to get more pension till they are alive and no problem whether the family gets the income after his death, this option suits well.  If the investor is a bachelor or spinster, this option is the best of all.

Pension with Insurance

It is through this option the policyholder will get lifelong pension besides getting the total invested amount to the family members or nominees after his death where even the total purchase price amount is returned back.  This is called as Life Annuity with return of Purchase Price.  When compared to the above mentioned option the pension that is taken by hand will be less. This option suits best for those who think of getting the lifelong pension till he is alive and even after getting the income to his family members after his death.

Pension of Life Partner

The dependant spouse plan is the one where even the life partner gets the pension lifelong even after the death of the investor.  There are two options in this plan where the first one is the investor getting the pension lifelong and after his death the life partner getting the pension until period that is mentioned during the time of the policy taken. The option whether the life partner to get the pension lifelong or for a limited period is to be mentioned clearly during the time of taking the policy. The pension taken every month depends on the choosing of the option. This plan is very suitable for the wife and husband who is dependent on one another.

Annual Increasing Pension

By choosing this option the pension will be less in the early stages and later on it will be increased along with the tenure of the pension in the upcoming years. On the other hand, this plan best suits to go away from the increase of the expenses due to the increase in the solid amount and where the pension that is taken every year is increased. The increase of the pension will be around 3 to 4 % every year. This plan is very useful for those who live life long.

Choice is Ours

In this option, the choice is ours that till how much tenure do we need pension. The tenure may be 5, 10, 15, 20 or more than those years and the choice is ours. The total amount of pension we get every month depends on the selection of this tenure. According to this the amount of the pension we get lessen when the duration is increased. Finally, those who wish to get huge pension in a short period of time this plan suits the best.