A retirement plan, also known as a pension plan, is a type of life insurance plan designed to meet an individual’s financial needs post-retirement. It helps in building a corpus and generating a regular income after retirement. A well-structured pension plan:
Under Section 80CCC of the Income Tax Act, 1961, you can claim a deduction of up to ₹1.5 lakhs for investments in pension plans. However, this deduction is not separate from the one available under Section 80C. The combined limit for tax relief under Sections 80C and 80CCC is ₹1.5 lakhs, which includes other eligible retirement investment plans like ELSS funds, tax-saving fixed deposits, and the Public Provident Fund (PPF).
The payment duration refers to the period during which you receive a pension after retirement. For example, if your plan provides regular income from the age of 60 to 75, the payment duration is 15 years.
In the unfortunate event of the policyholder's death, the nominee receives a death benefit from the insurance company. This benefit may also include additional compensation for accidental death if such a rider is included in the plan.
Many retirement plans offer the flexibility to choose the asset allocation of your funds, allowing you to diversify based on your financial goals and risk tolerance.
Some retirement plans provide annual bonuses after a few years, helping your investment grow over time.
All pension plans in India come with an assured maturity benefit, often referred to as guaranteed pension plans. These plans provide a secure and rewarding investment option, ensuring that your savings grow and provide substantial value over time.