Give Your Retirement Savings A Booster-Shot with Annuities
Close
Close

Buy a life insurance plan in a few clicks

Now you can buy life insurance plans completely online right here.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Back

Give Your Retirement Savings A Booster-Shot with Annuities

  • 16th Dec 2021
  • 47

View Plans Give Your Retirement Savings A Booster-Shot with Annuities

Give Your Retirement Savings a Booster-Shot with Annuities

Experts say a retirement planning portfolio should balance at least three to four different financial instruments. Amongst other instruments available, buying a good annuity plan can stabilise your retirement planning strategy. Let’s know more about them and how they can boost your retirement savings.

What is an Annuity Plan?

An annuity plan is an insurance product that guarantees to pay you a fixed and regular pension to support your retirement years. Despite being an insurance product, it does not provide life cover. Instead, it offers safe and assured periodic pay-outs to support your daily expenses once you have retired.

Types of Annuity Plan

The annuity plans can be broadly classified into two types-

1. Immediate Annuity

In Immediate annuity plans, the insured pays a lump sum amount to buy the plan and starts receiving the pension pay-out immediately from the insurer. This type of plan is best suited for one who is nearing retirement or planning to retire soon.

2.Deferred Annuity

In a deferred annuity plan, one can buy the annuity plan with a lump sum amount and choose to wait for a few years before the pension period commences. The waiting period between purchasing the annuity and the start of the pension amount is called the deferment period. A deferred annuity is best suited for individuals who have age on their side and are not planning to retire early.

Income Options with Annuity Plans

Annuity plans generally offer the following pension options to serve specific needs-

  • Lifetime income
  • Lifetime income with the return of the purchase price to the surviving spouse.
  • Lifetime income with term guarantee.
  • Lifetime income with 100% annuity to surviving spouse.
  • Lifetime income with 50% annuity to surviving spouse.
  • Lifetime income with 100% annuity and return of the purchasing price to the surviving spouse.

How Can They Boost your Retirement Savings?

1.Regular Income after Retirement

Salary usually stops immediately after the commencement of retirement. In such a scenario, you can keep receiving a regular pension with the help of annuities. The regular income can help you meet daily expenses without putting pressure on your main retirement corpus or emergency fund.

2.Tax Benefits

While there is no tax benefit on a pension received through the annuities, you can claim a tax exemption under section 80C on the purchase price of the annuity.

3.Fixed Interest Rate

The rate of interest offered during the purchase of the annuity remains unchanged for the lifetime. This is the reason why you will keep getting the same pension amount for your entire life. You don’t have to worry about falling bank interest rates.

4.Complete Protection from Market Volatility

Annuity plans are non-participating. Therefore, the amount invested in an annuity is never invested in the stock markets. Hence, they are completely shielded from the stock market volatility. This makes them an ideal choice for risk-averse investments and retirement funds.

Choose a Trustworthy Insurance Partner

It is crucial to consider reputed insurance companies for buying an annuity plan. Choose only well-established insurers that will stay in business a few years or decades down the line when you have retired. Look at their solvency ratio and credit ratings to ensure they have a strong financial position. 

The main idea behind the annuity is to keep the in-flow of money intact even after retirement so that you may concentrate on being a happy and boisterous retired person spreading positivity all around.

- A Consumer Education Initiative series by Kotak Life

Tags

Also read

    • 16th Dec 2021
    • 80

    10 Steps to Figure Out How Much Money You Will Need After You Retire

    The challenge is to figure out knowing how much money is enough to retire in India. Here are ten ways to calculate post-retirement corpus in India.

    Read more
    • 30th Nov 2021
    • 45

    Long Term Investment Guide for Your Retirement

    A retirement plan ensures sufficient financial coverage & it's crucial to prioritise your long-term investments when you're investing for your retirem...

    Read more
    • 27th Aug 2021
    • 250

    What is a Retirement Plan - What are its Features?

    A retirement plan or pension plan is designed to fulfil the post-retirement needs of an individual. Read more about what is a retirement plan & its fe...

    Read more

Related Plans

  • Kotak e-Term Plan - Online Term Insurance

    Kotak e-Term Plan - Online Term Insurance

    Kotak e-Term Plan is a pure term insurance plan that provides a holistic life protection at affordable prices. Find out the eligibility criteria, key ...

    Know more
  • Kotak Gratuity Group Plan

    Kotak Gratuity Group Plan

    Kotak Gratuity Group Plan is a Unit-linked group gratuity plan that helps you fund for the gratuity obligation systematically & effectively and releas...

    Know more
  • Kotak POS Bachat Bima

    Kotak POS Bachat Bima

    Kotak Life Insurance presents a simple savings and protection oriented plan, which provides all guaranteed benefits while giving life insurance cover ...

    Know more
  • Kotak Health Shield

    Kotak Health Shield

    Health is the greatest blessing for all human beings. Today, every individual is aware that the number of illnesses are increasing day by day and so a...

    Know more
  • Kotak Assured Return Employee Benefit Plan

    Kotak Assured Return Employee Benefit Plan

    Kotak Assured Return Employee Benefit Plan is an insurance plan designed for Employers /Trusts, Employer – Employee groups who wants experts to mana...

    Know more