Getty ImagesFind out which one of the following annuity options will be right for you and how much pension an investment of Rs.10 lakh will give per month.
ANNUITY FOR LIFE
ASSURED PENSION FOR CHOSEN TERM
INCREASING PENSION
PENSION FOR SPOUSE
RETURN OF PRINCIPAL
Note:All premiums are for male buyer aged 60 years. *Spouse assumed to be 55. Source: Policybazaar.com
ANNUITY FOR LIFE
- Fixed amount is paid to buyer at regular intervals (usually every month) for life.
- Advantage: Offers highest pension amount to investor.
- Disadvantage: Early death (in 5-10 years) means the buyer loses out on returns from investment.
- Go for it if you are unlikely to have any financial obligations
- Max Life Smart Guaranteed Pension Plan will give Rs.7,549 per month for life
ASSURED PENSION FOR CHOSEN TERM
- Buyer gets pension for fixed term (10, 15 or 20 years) and then for life.
- Advantage:Gives assured pension to family even if the buyer dies early.
- Disadvantage:The longer the assured period, the lower the pension.
- Go for it if you have dependants who need support for some years.
- Bajaj Allianz Guaranteed Pension will give as Rs.6,126 per month (for at least 20 years and then life)
INCREASING PENSION
- Pension amount increases 3-5% per year to account for inflation.
- Advantage:Helps the buyer keep pace with rising cost of living.
- Disadvantage:Pension amount is low. 3% simple increase does not fully cover inflation.
- Go for it if you do not have any other stream of income to beat inflation.
- HDFC Life New Immediate Annuity Plan will give Rs.4,910 per month for life with 5% increase every year
PENSION FOR SPOUSE
- Buyer gets pension for life. After death, spouse gets pension for life.
- Advantage:Continues to support spouse after the death of buyer.
- Disadvantage:Pension amount is lower because it is for two lives.
- Go for it if your spouse will need financial support after your death.
- Max Life Smart Guaranteed Pension Plan will give as Rs.6,439 per month to buyer and spouse* for life.
RETURN OF PRINCIPAL
- Buyer gets pension for life. After his death, nominees get principal back.
- Advantage:No risk to money in case of early death. Legacy remains safe.
- Disadvantage:Pension amount is very low because principal is returned to buyer’s family.
- Go for it if you intend to leave something for your family after death.
- Max Life Smart Guaranteed Pension Plan will give as Rs.5,884 per month for life, return Rs.10 lakh on death.
Note:All premiums are for male buyer aged 60 years. *Spouse assumed to be 55. Source: Policybazaar.com
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