Understand the Benefits of Immediate Annuity

Financial planning effectively covers retirement plans and helps individuals maintain an independent and comfortable lifestyle after their work tenure. The primary objective of a retirement plan is having a guaranteed and steady income, especially for those not entitled to an after-retirement pension. The post-retirement pension plans are generally for government employees.

A suitable retirement plan can propel you ahead in the inflationary trends and lead you to a peaceful lifestyle in your retirement years. It would help if you created a corpus during your productive years such that an income stream helps you with a steady inflow of funds. Such financial vehicles come in the form of an immediate annuity plan.

What is an Immediate Annuity Plan?

An annuity plan is a scheme that offers you a regular payment for a lifetime in exchange for a lump sum that you invest with the service provider. In India, the most simple annuity is the retirement annuity plan that helps develop the required corpus for investment to pay you back the returns.

An annuity is a contract between the policyholder and the insurance company. Here, the policyholder makes payments either in instalments or lump-sum. After making the payment, a regular stream of income commences, hence, the name immediate annuity plan. One can also schedule the payments on a mutually agreed-upon date, generally after retirement.

Why Must You Purchase An Immediate Annuity Plan?

Now that you know what annuity plans are, let us find out how one can benefit from any specific annuity plan.

• You can enjoy financial freedom after retirement and benefit from the selected regular income stream throughout your lifetime.
• You are in the power of designing the immediate annuity's contour with your retirement age, type of annuity plan, pension quantum, etc., to match your preferences.
• You can easily choose a legacy option or a joint coverage to benefit your grandkids.

Features of an Immediate Annuity Plan

• You can determine your age of retirement which can start from forty years.
• You get to select the regular income stream intervals that might suit your convenience.
• You can purchase a non-linked and non-participating plan by paying a lump sum.
• You get to receive the benefits immediately after investing.
• You can select a joint cover option covering your spouse in your absence.
• A return of the purchase price choice enables you to leave a legacy for the generations to come after you.

Benefits of Immediate Annuity Plan

• Begin receiving money immediately

  After investing in an immediate annuity plan, you can start collecting your income payments. There would be no delays between your upfront investment and the expected returns. Thus, the annuity pension plan is ideal for anyone requiring money immediately.

• Simplicity

  Immediate annuity plans are easily manageable. Unlike the varying other kinds of investment incomes, annuity plans do not require rebalancing or account monitoring. You get paid regularly, like clockwork.

• Potential for a lifetime income

  If you wish to create a guaranteed income stream for a lifetime, an annuity plan can be your rescue.

• Shield against market losses

  You can set up an index or fixed immediate annuity to save yourself from the effect of market losses. Your insurer would provide security to your funds against any market loss. Therefore, even in the case of a downturn, you need not worry about losing any funds.

• Customisable

  You have the liberty to choose how you must build your annuity plan. The flexibility offers more than deciding the amount or the duration you get paid. You get a chance to pay for and avail of additional features, namely riders, and enjoy the benefits. You can also add more benefits like allowing inheritance for your heirs and inflation protection.

Conclusion

The retirement phase of your life is a vital milestone. What is more important is to plan for it in advance. You can relish the fruits in your retirement if you have prepared well during your working years. The best annuity plan can be a gift to ensure financial independence during your retirement years. 

To know more, please read the relevant articles at our website PNB MetLife.

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