Life Goals Loading…

Get Life Goals Back-up Plan

Have us call you

Please enter a Name
Please enter a Mobile No.
Please select a option
Please select a option

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.

Types Of Pension Plans In India

Types of pension plans in India

Types Of Pension Plans In India


June 15, 2020

By : Bajaj Allianz Life

There is no denying the need and importance of investing in a pension plan if you are a private sector employee, a businessman or self-employed person in India. While public sector workers are fortunate to have a state-sponsored pension system, it’s not so for a large chunk of the workforce working in the private sector.

Moreover, a government-run social security system doesn’t exist in India; hence citizens have to rely on various types of pension plans to enjoy retirement benefits. Also, the prevalence of nuclear families, economic uncertainty, and rising living and healthcare costs today, demand skilled planning, savings and investments in various pension and annuity plans.


What are pension plans?


A pension plan, also called an annuity plan or retirement plan, allows you to receive regular monthly income after retirement. To enjoy retirement benefits with a pension plan, you can invest as a lump sum amount in a single time or systematically invest in monthly, half-yearly or annual premiums over a period of time. A pension plan ensures that you don’t have to compromise on your lifestyle and life goals even after retirement


Types of Pension Plans in India – Features & Benefits


Today, insurance companies have come up with many unique and well-designed pension plans that promise consistent financial support and ensure a worry-free retirement life. Here are the two major types of pension plans in India along with its features and benefits.

1. Immediate Annuity Plans

In an immediate annuity plan, the insurance company agrees to pay the pension immediately (i.e. starting next month/quarter/half-yearly/yearly as opted for) on investing a lump sum amount.

Features & Benefits

An immediate annuity plan is an ideal investment if your retirement date is approaching and you need to replace your existing income through another source. By paying a lump sum amount, you can immediately secure a regular income for your entire retirement life.

You can also opt to receive the annuity or pension as monthly/quarterly/half-yearly/yearly from the commencement of the plan. Some insurers allow you to choose from as many as 6 annuity options, such as:

1. Life annuity

2. Life annuity with return of purchase price

3. Annuity plan for a specific period

4. Joint Life Last Survivor with 50% of annuity to spouse

5. Joint Life Last Survivor with Return of Purchase Price on death of Last Survivor

6. Joint Life Last Survivor with 100% of annuity to spouse

2. Deferred Annuity Plans

In this type of annuity plan, you can accumulate the retirement fund for the long-term by paying premiums systematically on a monthly, quarterly, half-yearly or yearly basis.

Features & Benefits

A deferred annuity plan can be divided into the accumulation and income phase. During the accumulation phase that lasts from commencement of the plan until you choose to receive the annuity, you will be investing in the plan and growing your retirement savings. Then, during the income phase (post retirement a.k.a. Vesting Age), you have an option to withdraw 1/3 of the retirement fund and invest the remaining on an immediate annuity plan to receive a regular monthly pension or you can invest the entire amount into an immediate annuity plan.


Tax Benefits on Pension Plans


Contributions made on pension plans are eligible for deductions under Section 80CCC of the Income Tax Act 1961, up to an extent of Rs. 1.5 lakh per annum.


Tax Benefits on Immediate Annuity Plans


In an immediate annuity plan interest earned is taxed as ordinary income but the principal is exempt from tax. But once you have received the principal amount in full, the payments are fully taxable. However, since you will receive the amount post retirement, the income tax rate will be lower.




Before you buy a pension plan ensure that you have carried proper due diligence and chosen the right pension to meet your retirement goals. Make sure that you have a clear estimate of your future life goals and retirement income requirement while taking your current income, inflation and risk profile into account.

Bajaj Allianz Life Videos

Video Icon

Flexi Income Goal – Variants, Features, Benefits Explained

Video Icon

Why Choose Bajaj Allianz Life To Help Get Your #LifeGoalsDone?

Video Icon

#DostiWithDad - Happy Father's Day | Bajaj Allianz Life | Life Goals Done

Video Icon

Covid-19 Survivor Story | Bajaj Allianz Life Smart Protect Goal | Bajaj Allianz Life

Video Icon

Lage Raho India - Keep getting your #LifeGoalsDone

Video Icon

Don’t Let COVID-19 Lockdown Get in The Way of Your #LifeGoals

Video Icon

Coronavirus (COVID-19) Advisory Video #DooriHaiZaroori

Video Icon

Coronavirus COVID-19 impact on markets - CIO Commentary | #KeepCalmStayInvested

Video Icon

Bajaj Allianz Life Leadership Team | #PlankForIndia

Our MD & CEO, Tarun Chugh launches #PlankForIndia campaign and planks with Sanjiv Bajaj MD & CEO, Bajaj Finserv and Chairman Bajaj Allianz Life & the rest of the group leadership team.

Video Icon

#PlankForIndia | Bajaj Allianz Life

Bajaj Allianz Life will contribute to the training and development of India's future sports stars. Come together to Plank for Good Health, PlankforIndia.

Video Icon


#PehlaDinPehlaResolution | Happy New Year | Smart Protect Goal | Bajaj Allianz Life

Video Icon

Bajaj Allianz Life Goal Assure

Bajaj Allianz Life Goal Assure - A ULIP Investment Plan To Achieve Life Goals

Video Icon

Valentine's Day

Valentine's Day

Video Icon

Bajaj Allianz Health Care Goal

A Comprehensive Health Insurance Plan with Critical Illness Cover | Bajaj Allianz Life Health Care Goal

Video Icon

#36SecPlankChallenge video

Promote Healthy Living for a Better Tomorrow with our #36SecPlankChallenge

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:

Weekdays - 9:00 AM to 3:30 PM

Saturday - 9:00 AM to 12:00 noon

Customer Care Helpline:


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

For NRI: +91 20 67871700 (Call charges apply)

Monday to Saturday 9.00 AM to 7.00 PM (IST)

Sales Enquiry Helpline:


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)