5 Ways in which annuity plans will help your early retirement

Is it good to invest in annuities for retirement income ...

One of the biggest financial risk during retirement is the possibility that you may outlive your retirement corpus. Hence, it would help if you planned for your life after retirement well, especially when it comes to finances. 

Today the market offers you a plethora of financial instruments to safeguard your retirement life financially. One such instrument is the annuity plan. In this article, we will take a look at how this plan will help you plan a financially independent life post-retirement. 

What is an annuity plan?

An annuity is a plan is a financial instrument which helps you receive a regular payment during your retirement life. This happens once you make a lump sum investment. Generally, the life insurance company will invest the money of an investor and will pay back the returns, which are thus generated.

The annuity plans in India offers you to have an income stream for life or even for a fixed period from an insurance company. The insurance company makes this payment on a monthly, quarterly, or annual basis. However, if you have opted for a monthly pay-out, the income will depend on your age, current annuity rate, and the type of annuity product chosen. 

How can annuity plans help you after retirement?

Usually, annuity plans are designed in a way to suit your retirement life. Once you turn 70, your physical and mental ability to manage investments will not be the same as your younger years. Additionally, you may also have health ailments. Thus, unless you have a trusted friend or a family member who can help you out by sparing some time for you, managing your finances can be quite a challenge. With the annuity policy, your funds will be taken care of. Personal manager appointed to you at the purchase of this plan will take the necessary steps to keep your plan going and helping you create a financial corpus. Additionally, as you grow older, annuity policy rates also improve with age. However, it would help if you considered the quantum of annual annuity receipts along with other incomes to see how tax-efficient purchase of annuity plan can be.

What are the benefits of purchasing an annuity plan in India?

Some of the benefits of annuity plans in India offer you are:

  • The insurance company bears the longevity risk.
  • Your insurance company will continue to make payment for as long as you live.
  • Annuity plans come with additional products which are easy to understand.
  • Annuity plans offer multiple variants. These variants let your nominee receive the premium amount in case of your sudden demise. 

There different types of annuity plans offered by many insurance providers, select the one which best resonates with your lifestyle.