Life Goals Loading…

10 Blue cross

Notifications10

  • Fulfill your Life Goals with Bajaj Allianz Life Goal Assure

    KNOW MORE
  • Here's a Comprehensive Tool To Plan Your Child's Future

    START NOW
  • There is lot to remember in Life, Set renewal premium payments to Auto Pay

    WATCH VIDEO
  • Get Life Cover worth Rs.1 Crore at Rs.21 per day2 – Bajaj Allianz Life Smart Protect Goal

    CALCULATE NOW
  • Life Insurance Term Plan with Return Of Premium

    WATCH NOW
  • Get your Life Goals Done with Bajaj Allianz Life Smart Assist – BINA MILEY MIL-KAR

    KNOW MORE
  • Paying your Renewal Premium is Quick and Easy!

    PAY NOW
  • Know the right amount of Insurance you need in just a few steps!

    START NOW
  • Avail Term Insurance Tax Benefits under Section 80D

    READ MORE
  • Know how to invest money during the covid-19 pandemic!

    READ MORE

Thanks for sharing your details, A Sales representative from
Bajaj Allianz Life will contact you shortly.

Dear Customer, we request you to connect with us in our next business working hours, (Monday to Saturday 24*6) Thank you, Have a great day ahead

Have Us Call You
X

Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

Immediate Annuity vs Deferred Annuity Plans

Immediate annuity vs deferred annuity

Immediate Annuity vs Deferred Annuity Plans


calender-blue

July 07, 2021

By : Bajaj Allianz Life

Saving money has always been important. While the world is constantly changing, the pace at which these changes have taken place has been particularly fast since 2020 and the onset of the Coronavirus pandemic planning for your financial future is pertinent as it can allow you to focus on your, desired life goals.

 

Types of pension plans

 

Deciding how to allocate funds for your future can be a tough feat. However, making a concrete plan for the same is prudent as it allows you to rest easy during your later years. Retirement years are meant to be stress-free and setting aside hard-earned money in a pension plan can prove to be rewarding in the future. Presently, there exists a wide range of pension plans available in the market. Some of the more popular ones have been examined below.

National Pension Scheme allows those who avail of it to receive a regular pension once they retire. They allow for policyholders to contribute to their pension account while they are still involved in their careers. Policyholders’ funds are invested in debt and / or equity markets based on preference. Once policyholders turn 60, they are entitled to withdraw some of their investments and use the remainder to purchase an annuity which provides them with a regular income.

Pension Funds require policyholders to invest a certain amount for a certain timeframe in the fund of their choice. Available funds cater to a wide variety of investor preferences. The investment’s value increase complements the increase in the fund’s value. Once policyholders retire, they are entitled to withdraw all their money from the plan or receive it in the form of a regular income.

Annuity Plans require policyholders to invest lumpsum amount of money or pay premiums in regular intervals which are invested by the plan provider on the policyholder’s behalf. Once retired, policyholders are entitled to withdraw the entire sum of money in one go or receive it in the form of a stable income. Annuity plans are available in two different forms – immediate and deferred each of which has been discussed in detail below.

 

What is an immediate annuity plan?

 

Immediate annuity plans provide their policyholders with monthly or annual annuity immediately after investments have been made by the policyholder. Payments provided continue for a specified time frame or may carry on across the policyholder’s lifetime.

With the support of an immediate annuity plan, policyholders are able to secure a steady stream of income for their partners even if they happen to not be present in the future.

Investing in this form of a plan is suitable for those seeking regular annuity payments. The rate of return on annuities varies and is based on the annuity plan selected by the policyholder.

 

What is a deferred annuity plan?

 

Deferred annuity plans provide policyholders with the choice to either provide the policy provider with a lump sum amount or pay premiums on an annual or monthly basis for a specified set of time. Policyholders are eligible to avail of annuity payments after a certain time frame or specified term has ended.

Deferred annuity plans allow policyholders to squirrel away funds for their future. This form of plan allows policyholders to withdraw only a third of their corpus on a tax-free basis. The remaining two-thirds are ordinarily required to be a mandatory annuity that provides a steady income. Investing at a young age allows for a greater amount of income generation for your future. Moreover, the longer investments remain untouched, the better their chances of maximizing returns.

 

How to select between the two aforementioned plans?

 

When considering which kind of annuity plan might be suitable to a given individual, they must consider their age. For those of whom are close to retirement or have already retired, immediate annuity plans could be more appropriate. This is because they provide policyholders with annuity immediately once enrolled.

Conversely, those who are still starting out, young, and in the prime of their life can afford to invest their money in a deferred annuity plan. This is because investments are required to be made for a particular time frame only after which policyholders are eligible to avail of their annuity.

It is important to bear in mind the following facts –

  • Senior citizens don’t have tax levied on income generated via an annuity plan if the income falls below the maximum limit of the applicable income tax slab.
  • While policyholders are entitled to withdraw 25 to 33% of their investments in one fell swoop without paying taxes for the same, income generated from annuity plans is taxable in accordance with the policyholder’s income tax slab.
  • Retirement calculators can serve as nifty tools to determine what form of pension plan is appropriate.
  •  

    Conclusion

     

    Prior to investing in a plan, it is important for prospective buyers to consider their present financial needs, long-standing financial goals, present savings or investment portfolio, the ramifications of inflation, and possible substitute plans presently available to them. >

    Retirement benefits could be maximized provided one has planned well in advance.

    BJAZ-WEB-IC-01201/21

Bajaj Allianz Life Videos

Video Icon

Dancing Uncle Is Back | Special Bonus | Bajaj Allianz Life

Contact Us

Bajaj Allianz Life Insurance Company Ltd.

Bajaj Allianz House, Airport Road, Yerawada, Pune - 411 006, Maharashtra

Tel No: 020-66026773

Fax No: 020-66026789

Branch Visit Timings:

Monday to Friday - 9:00 AM to 3:30 PM

Saturday - 9:00 AM to 1:00 PM

Customer Care Helpline:

1800-209-7272

Monday to Sunday: 9:00 AM to 7:00 PM (IST)

NRI Services Helpline

24/7 (All week days)

Sales Enquiry Helpline:

1800-209-4040

Monday to Saturday: 9:00 AM to 7:00 PM (IST)

For NRI: +91 20 67688888 (Call charges apply)

Monday to Saturday: 9:00 AM to 7:00 PM (IST)

Find Us Online

~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information.